FORM 10-KSB

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

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

For the transition period from __________________ to __________________

Commission file number 000-29459

**PACEL CORPORATION**

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|Virginia(State or other jurisdiction of incorporationor organization) |  | 54-1712558(I.R.S. Employer Identification No.)
|--------------------------------------------------------------------- |  | ----------------------------------------------

|8870 Rixlew Lane, Suite 201, Maassas, Virginia(Address of principal executive offices) |  | 20109-3795(Zip Code)
|-------------------------------------------------------------------------------------- |  | --------------------

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

Check if there is no disclosure of delinquent filers in response to is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year: $244,971

The aggregate market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the price at which the common equity was sold on the Over-the-Counter Electronic Bulletin Board as of February 28, 2001 was $4.1 million.)



As of February 28, 2001, there were issued and outstanding 47,161,556 shares of the Issuer's common stock.

Transitional Small Business Disclosure Format (Check one): Yes ____; No X

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|**PART I**                                                                                         
|                                                                                                    |         
|Item 1.       Business                                                                              | 3       
|Item 2.       Properties                                                                            | 13      
|Item 3.       Legal Proceedings                                                                     | 13      
|Item 4.       Submission of Matters to a Vote of Security Holders                                   | 14      
|                                                                                                    |         
|**PART II**                                                                                        
|                                                                                                    |         
|Item 5.       Market for Registrant's Common Stock and Related Stockholder Matters                  | 14      
|Item 6.       Management's Discussion and Analysis of Financial Condition and Results of Operations | 14      
|Item 7.       Financial Statements and Supplementary Data                                           | 18      
|Item 8.       Changes in and Disagreements With Accountants on Accounting and Financial Disclosure  | 31      
|                                                                                                    |         
|**PART III**                                                                                       
|                                                                                                    |         
|Item 9.       Directors and Executive Officers of the Registrant                                    | 32      
|Item 10.     Executive Compensation                                                                 | 32      
|Item 11.     Security Ownership of Certain Beneficial Owners and Management                         | 33      
|Item 12.     Certain Relationships and Related Transactions                                         | 33      
|Item 13.    	Exhibits, Financial Statement Schedule, and Reports on Form 8-K                        | 34      



When used in this document and in our filings with the Securities and Exchange Commission, in our press
releases or other public or shareholder communications, and in oral statements made with the approval of an
authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project" or similar expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are subject to certain
risks and uncertainties, that could cause our actual results to differ materially from our historical results and those
we presently anticipate or project.  You should not to place undue reliance on any forward-looking statements,
which speak only as of the date made. Various factors could affect our financial performance and could cause our
actual results for future periods to differ materially from any opinions or statements we express with respect to
future periods in any current statements.  These factors include, but are not limited to, the following: increases in
our operating expenses outpacing our revenues; our inability to expand our sales and distribution channels; the
failure of strategic relationships to implement and promote our software products; the failure of third parties to
develop software components necessary for the integration of applications using our software; and the use of our
intellectual property by others.

You should read the following discussion together with "Selected Consolidated Financial Data," and our
consolidated financial statements and the notes to those financial statements included elsewhere in this document.

**PART I**

**Item 1.  Business**

**Business Overview**

PACEL Corp is a software applications development company and systems integrator located
approximately 30 miles outside of Washington, D.C, in Manassas, VA.  We specialize in providing
innovative software products for clients in the commercial, industrial and government marketplace. We
also offer a full line of Internet services and provide Information Technology consulting services.
PACEL has continued to develop Commercial Off the Shelf (COTS) software security programs that are
setting the "Pace in Internet Security".  These products in conjunction with our Internet business, allow
us to provide a full suite of services and products that include secure connectivity to and from the
Internet, content design and secure transaction services

In October, 1999 PACEL Corp acquired Fairfax Communications Limited (FCL) as a wholly
owned subsidiary.  FCL specializes in providing Information Technology consulting services, hardware
and COTS software products to industrial and government marketplaces.  During fiscal year 2000 FCL
won a contract extension for the Blanket Ordering Agreement with NATO to provide products and
services.  The company was reorganized to focus on marketing and sales, and the technology functions
were integrated into PACEL's home office functions. During this same period PACEL formed an 80%
owned subsidiary, E-Business-Stor.com (EBStor), a web site and e-commerce development and hosting
company.  David E. Calkins and F. Kay Calkins both own 10% of EBStor individually.  The business
focuses on clients in the small to medium business arena.

During fiscal 2000 PACEL Corp focused on extending those technologies and capabilities in the
production of products to provide secure Internet connectivity and enhanced desktop security for
customers in the home and business marketplaces.  We have also invested heavily in our infrastructure,
both technically and physically and we expect we will need to continue to hire and retain management,
sales, and marketing personnel and other employees.  Assuming we are successful in our growth, there

can be no assurances that we will be able to effectively manage the expansion of our operations, or that
our facilities, systems, procedures or control will be adequate to support our expanded operations.  Our
inability to effectively manage our future growth would have a material adverse effect on our business.

Our current areas of focus are to provide software application development, systems integration,
Internet services, and Information Technology services. However, there is no assurance that we can do
so, or even if we can do so, that we can maintain our technology edge in an economic fashion.

**Software Applications Development and Systems Integration**

****       ChildWatchTM  Family of Security Products.  A special security and Internet filtering program has
been developed in support of providing a family safe PC, including making the Internet a safe and fun
place for our children, while also helping to support various non-profit organizations locate and recover
missing and abducted children. The ChildWatchTM  family of products allows parents to block children's
access to unsuitable Web sites through connection to a database of family-unfriendly sites selected by a
committee of child experts from representatives of non-profit organizations and law enforcement
agencies from across the United States. The database of questionable web-sites is updated on a frequent
basis and provides parents with the ability to protect their children from unwanted web sites, by allowing
them to block inappropriate sites. The software gives parents this ability without the necessity of finding
the sites beforehand or relying on a robotic search engine that can limit full utilization of the Internet.
This add-on service to allow parents to block non-family-friendly web sites is offered by us for a
monthly charge. The program also monitors and records all activities on the computer, leaving an
"electronic trail" of web sites visited that is independent of the browser's history file, and cannot be
deleted by the user.

"ChildWatch Lite" is the initial component of the ChildWatch family. ChildWatch Lite is distributed
through various retail outlets and is also available for download from the ChildWatch.com web-site,
which was designed by and is maintained by EBStor, inc.

"ChildWatch" is the entry-level retail component of the ChildWatchTM family. ChildWatch combines the
functionality of ChildWatch Lite with enhanced security features.

"ChildWatch Plus" is a more robust version of ChildWatch in development includes file folder blocking
and other advanced security features, such as chat room and instant message blocking. ChildWatch Plus
was designed for the home user who shares a computer with several persons and who maintains sensitive
data on that machine.

JDHTM Management Information System. JDHTM is a software system that consolidates intake,
demographic, facility, staff, and volunteer information for juvenile detention facilities, as well as
automating mandatory reports. JDHTM software is a flexible, customizable application that was
specifically designed for juvenile facilities to help them save time and funds.  JDHTM uses familiar
WindowsTM conventions in all its data entry and access screens, allowing staff to learn the program
quickly and increase their productivity.  Users have immediate access to all information about any
detainee, past or present, including court appearances, incidents, attorney information, and behavioral

flags.  PACEL has already been successful with JDH at the local county level, having been awarded a
contract by the County of Prince William for enhancing its JDHTM automated information system for the
tracking and administration of youths under the care of the Juvenile Detention Home.

*e*-CenturionTM is our brand new patent pending  3 in 1 security program.  This innovative software
protects computer data from attacks by blocking hackers, preventing malicious access by computer
viruses and provides personal privacy by stopping external attempts to "steal" data.  The program works
by associating applications with a specific file or file type and prohibits access by any other programs.  A
patent application is currently pending for this program and its underlying technology, the PACE (Pre-Access Control Element) Module.

Visual Writer SystemTM. Visual Writer SystemTM provides users with the ability to create, revise, review
and run interactive, electronic documents. Upon completion of the document, users may view and
analyze information collected during implementation. Interactive, electronic documents are
computerized documents that are created, viewed and implemented on-screen. They may be used for a
number of purposes including training, data collection and inventory control. The documents can be
designed in a variety of fashions, from simple checklist to complex multi-page procedures. Automated
documents allow users to enter information such as comments, numerical values, initials and electronic
signatures.

ZoomerTM. Internet users, who currently number in the tens of millions and are rapidly growing, enjoy
viewing the wide range of images on the countless numbers of accessible web pages. These users enjoy
"capturing," saving and manipulating images. Unfortunately, the most common method of accomplishing
this task is through an acquisition program which usually requires the launching of another program,
ZoomerTM is a resident software program that allows users to magnify, acquire and save any part of their
computer screen. ZoomerTM utilizes click and drag technology to allow the user to enlarge or reduce text
or images on the computer screen, save them as BMP files or paste them on the desktop for further use in
other software applications.



WinSentryTM. WinSentryTM provides workstation security ensuring that the user's information is
secure and protected from unwanted intrusions when the computer is unattended. Most computer users
produce and store sensitive and valuable information on desktop systems at work, at home and in the
home office. An unattended computer represents a tremendous liability in terms of both privacy and
financial risk. While standard operating systems provide some limited protection, even the most casual
computer user can circumvent these safeguards by accident or design. WinSentryTM has proven to be
invaluable for professionals in diverse fields such as law, medicine, accounting and real estate, and
anyone else who is concerned with the security of confidential electronic documents. WinSentryTM also
keeps track of events such as users' log-ins and log-outs as well as start-ups and shutdowns that occur
while activated.

PACEL Corp and subsidiaries also provides services in all aspects of system integration from
requirements analysis to information systems development and implementation including:

•       Business system planning

       •       Requirements definition and system specifications

       •       Software engineering

       •       System design and development

       •       System interface functionality

       •       Systems testing and implementation

       •       Prototyping

**Internet Services**

Through our subsidiary, EBStor we offer a full line of web development
services including design, graphics creation, database development, layout, search engine registration,
domain registration, and hosting and maintenance.  We have developed sites for a diverse group of client
needs from small business card sites to large-scale e-commerce solutions.  We offer quality sites with
state-of-the-art technology at affordable prices.

During fiscal 2000, EBStor began development of its infrastructure, expanded it's employee base
from four to ten employees. We established a sales department, and constructed an
environmentally controlled server room.  We provided training of new personnel, and established
operational procedures and methods to insure the highest level of quality of products and services.  We
developed web sites for PACEL Corp and EBStor including e-commerce capabilities for on-line sales of
our products.  We introduced these e-commerce capabilities including site design and development,
shopping cart set-up, database creation and maintenance and consulting services to clients interested in
developing an on-line presence.  Additionally, we provided e-commerce workshops for specific niche
groups to assist them in expanding their sales and marketing efforts to a non-traditional client base.

In fiscal 2000 we began development of standardized products that were used internally and will
be offered to future e-commerce clients.  These products include:

Custom Shopping Cart. Our custom shopping cart provides our e-commerce clients a mechanism to
display a "catalog" of products and allows online consumers to select and purchase those products online
with real-time credit card authorization.  Our shopping cart handles the interaction between the client
web site and the financial network (authorizing gateways and banks).  Our shopping cart also provides
email notification to the merchant (our client) and the consumer so each party is made aware of the
transaction that took place.

Image Catalog.  Our "Image Catalog" allows a client to upload an image to a database of products along
with descriptions of the product, including price.  The upload process also creates a thumb nail (small)
copy of the image for rapid display on the web site.  Users can click on the thumb nail image to see the
original full-sized image that was uploaded along with other descriptive text entered originally by the
client.

Template Builder. Our online Template Builder will allow our customers to select the design they would
like for their web site.  This is a completely customizable design consisting of multiple selections for
color, style, text, and buttons.  This tool will greatly reduce the time we spend in the design of a web site.
This saving can be passed on to our customers as well as provide a greater profit margin for
EBStor.Com, Inc. in the area of web design and development.

Template Builder Plus. A subsequent phase to the Template Builder also includes real-time text (content)
editing of an existing customer web site.  This  allows our clients to maintain the content of their web site
without having to task our staff to perform those duties, thus freeing us up to address the more technical
issues of the web site design and maintenance.

**Information Technology Consulting Services**

In October 1999, PACEL Corp acquired Fairfax Communications, Ltd. Located in Plymouth,
England.  FCL provides consulting services and solutions to military and government clients worldwide.
It also offers general consulting services in all areas of Information Technology and systems integration
to the general business community.  During fiscal 2000 FCL upgraded their existing quality management
program, and successfully passed an audit by the ISO-9000 Quality Organization to maintain this
system.  The quality program complies with the internationally recognized BS EN ISO 9001: 1994 under
the TickiT guidelines, for which the company has received registration.  Fairfax Communications, Ltd.
Also established itself as a Microsoft Authorized Education Reseller, allowing customers to receive
academic software quicker, with the assurance that they are receiving legitimate Microsoft academic
edition products.  These accomplishments provide FCL with the recognized credentials to pursue
government and educational contracts.

FCL has an existing Blanket Ordering Agreement with NATO that allows us to provide
hardware, software, and consulting services.  We are one of only approximately 20 companies qualified
to provide equipment and services in the Information Technology area to NATO members.  This
qualification allows us to provide products and services without  the necessity of going through the
international bidding process.  During fiscal 2000 we reorganized FLC's focus toward sales and
marketing efforts to capitalize on existing programs and contracts and to expand our client base to the
commercial and general government community.



We have historically specialized in the design, development, implementation, service and
support of custom software products for the energy, aerospace industry, and government agencies.
During fiscal 2000 we expanded our business activities to include off-the-shelf-software products for
commercial and consumer use.  Through our subsidiaries we also provide computer hardware sales,
systems integration, and web-based services.  Our traditional competition has been numerous other
software development companies in our market areas.  We now expect additional competition from
established retail software companies for distribution capabilities and retail shelf space.  Furthermore,
our competitors may combine with each other, and other companies may enter our markets by acquiring

or entering into strategic relationships with our competitors.  The market for PACEL's products and
services is subject to rapid technology change and increased competition from large existing players.
Substantially larger companies that have extensive research and development, marketing, financial, and
human resources capable of maintaining a high level of competitiveness dominate the industry.  There
are several companies with which PACEL competes in the software and Internet services industry that
have significantly greater assets and longer operating histories.  Some of these companies are extremely
aggressive.  They dominate the marketplace by using costly and protective pricing.  If PACEL became a
target of focused pricing and counter marketing we might not be able to afford to devote the resources,
time, funding, or management necessary to maintain profitability.  Some competitors have developed
name loyalty, and a following that is international in scope.  There is no assurance that PACEL can
penetrate this apparent marketplace dominance.  Furthermore, PACEL expects future consolidation in
the Internet professional services market to create larger, more viable competitors.

During fiscal 2000 PACEL concentrated on establishing relations with distributors and retail
outlets.  A trial campaign for ChildWatch Lite was conducted with Electronic Boutique and Zaney
Brainy retail outlets.  While the campaign successfully demonstrated the existence of a marketplace for
the product, and established a distribution channel for the company's products, significant revenues were
not realized.  Additional efforts and expenditures will be required to improve product recognition.

In recognition of the need to successfully market retail products such as ChildWatch and e-Centurion in the future, we established relationships with representatives in the retail software arena and
initiated development of specific marketing and sales plans for our commercial products.  We also
initiated efforts to develop strategic relationships with recognized suppliers of compatible products and
services to increase our product and company name recognition.

**Operations**

PACEL competes with a variety of software developers and Internet security firms.  To enhance
our chances of success in this marketplace the company continued to build its infrastructure through
hiring of key management personnel and employees with specific technical expertise.  Additionally, the
company enhanced its facilities through hardware upgrades and additions, and expansions to its
operational and developmental software.  We also established policies and procedures for software
functional and compatibility validation by independent testing facilities.

We regard our software as proprietary, and protect it with copyrights, patents, trademarks, trade
secret laws, internal and external non-disclosure precautions and restrictions to disclosure and transfer
ability that are incorporated into our employee and software license agreements.  We protect the source
code of our software applications as trade secrets and make source code available to OEM customers
only under limited circumstances and specific security and confidentiality constraints.  Our products are
generally licensed to end users on a "right to use" basis pursuant to a license that is non-transferable and
restricts the use of the products to the customer's internal purposes on a designated number of
computers.  We also rely on copyright laws and on "shrink wrapped" and electronic licenses that are not
signed by the end user.  Copyright protection may be unavailable under the laws of certain countries.
The enforceability of "shrink wrap" and electronic licenses has not been conclusively determined.

In an effort to protect our intellectual properties (trade secrets) in the ChildWatch suite of retail
products we filed copyright and trademark applications with the Patent and Trademark Office.  To
protect the newly conceived e-Centurion security program a patent application, that is still pending, was
also filed with the Patent and Trademark Office.

During its first full year of operation, EBStor implemented procedures for business practices and
developmental methodology for web-related products and services.  Additionally, the company
established security measures such as Secure Socket Layer capabilities for its e-commerce business, and
provided a recognized standard of Internet security for its clients.  Upgrades to EBStor's hosting
facilities were accomplished, as well as establishing the capability to provide email services for its
hosting clients.  EBStor also established a sales department for Internet related products and services.
Efforts in this area resulted in establishment of our initial client base as well as a contractual agreement
with a local technology high school to provide educational training through an Intern Program, and
assistance in enhancing their on-line capabilities.

PACEL Corp and EBStor established a joint strategic plan to provide customers with a complete
package of total security and Internet solutions.  The synergy of the two companies utilize expertise from
EBStor to create customizable "portals" that conform to the needs of the customer base and include
child-friendly, small business, and customized organization applications, with the security experience
and software development strength of PACEL to provide an integrated desktop to Internet security
system.



As of December 31, 2000, we had 18 employees. We have not experienced work stoppages and believe
our employee relations are good. Competition in recruiting personnel in the software industry, especially
highly skilled engineers, is intense. We believe our future success will depend in part on our continued
ability to recruit and retain highly skilled technical, management and marketing personnel.

******EXECUTIVE OFFICERS**

The executive officers of the Company as of February 16, 2001 are as follows:

|**Name**             | **Age** | **Position(s) with PACEL and its Subsidiaries**                                                                                                  | **Term asDirectorExpires**
|-------------------- | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------
|                     |        
|David E. Calkins     | 57      | Chairman of the Board, President and Chief
Executive Officer of PACEL and Fairfax
Communications Limited; Director of EBStor                     | 2001                      
|F. Kay Calkins       | 42      | Executive Vice President & Director of PACEL;
Director, President and Chief Executive Officer
EBStor; Director of Fairfax Communications Limited | 2001                      
|Kenneth J. Russman   | 37      | Vice President, Chief Operating Officer, Treasurer
and Secretary of EBStor                                                                       |                           
|Richard Bingler      | 49      | Vice President, Chief Operating Officer, of PACEL                                                                                                |                           
|Lyndon Thompson, CPA | 41      | Corporate Controller PACEL and EBStor and Fairfax
Communications Limtied                                                                         |                           
|Lisa B. Smith        | 37      | Director of Business Development                                                                                                                 |                           

A biography, including the principal occupations of each of the executive officers and board members, is
provided below.

***David E. Calkins***** founded PACEL in 1994 and is its acting Chairman, President and Chief
Executive Officer.  From 1992 until founding PACEL, Mr. Calkins was the Regional Manager of three
divisions of Pacific Nuclear, now known as Vectra Technologies, Inc., an engineering and information
services company and a NASDAQ Stock Market listed company.  Vectra Technologies  provides power
plant modifications, maintenance support and nuclear fuel handling to utility companies and the United
States Department of Energy.  From 1987 to 1993, Mr. Calkins served as Project Manager, Program
Director, Vice President-Operations, and Executive Vice President Business Development for PRC Inc.,
an information systems development and Services Company.  PRC provides support services to the
Federal government and the utility industry.  Mr. Calkins served from 1981 to 1986 as Manager of
Engineering and Construction for the Zack Company, a Chicago, Illinois mechanical contractor to the
utility industry.  Mr. Calkins was also a Manager of Quality Engineering, and Startup Engineer for
Westinghouse.  From 1972 to 1981, Mr. Calkins served as an Executive Engineer and Consultant for
NUS Corporation, a consulting firm for domestic and international utilities, The United States Nuclear
Regulatory Commission and Department of Energy.  Mr. Calkins is the spouse of F. Kay Calkins.

***F. Kay Calkins***** is currently a Director of PACEL and was Chief Operating Officer, Treasurer
and Secretary until September 1, 2000, positions she held since 1996.  Ms. Calkins is also a Director and
the President and Chief Executive Officer of PACEL's 80 percent-owned subsidiary, EBStor. Prior joining PACEL, Ms. Calkins was the President and Chief Executive Officer of CMC

Services, Inc., a consulting company offering consulting services on marketing, training, proposal
development and information systems analysis to industry and 8(a) firms from 1993 to 1996.  Ms.
Calkins is the spouse of David E. Calkins.

***Keith P. Hicks*****  has been a director of PACEL since January 1999.  He is a retired Captain of the
U.S. Army with over 20 active years of service.  Mr. Hicks was a Squadron Commander in Korea in 1955 and
1956, and served in the Executive Office to the Inspector General and the Office of Special
Investigations in 1960 and 1961.  Upon retiring from the military in 1961, Mr. Hicks started a private
investigation business in the Commonwealth of Virginia, which became one of the top investigative
firms in the state with over 60 agents.  Mr. Hicks also served as the Chief Deputy Sheriff of Fairfax
County from 1962 to 1969.  Mr. Hicks has owned and managed Hicks Cattle Company since 1962,
running over 200 head of beef cattle.  In 1972 he formed and continues to manage Hicks Bonding
Company and has been the owner/operator of Hick's Auctioning Company since 1991.  Mr. Hicks is also
a 25-year co-owner in a successful real estate company, C&H Properties Investments.  He has been on
the Board of Directors of Xybernaut, Inc. a high technology computer manufacturer of body worn, voice
activated computers since July 1994.  He is a graduate of the University of Denver, BA 1954, and
LaSalle University School of Law, LL.B. 1969.

***Corey M. LaCross***** has been a director of PACEL since November 2000.  Mr. LaCross is currently an Industrial Engineer Manager for United Parcel Service. Mr.
LaCross joined UPS in 1984 where he has held various operation assignments.  His most recent
assignment has been as the Southeast Region Industrial Engineer Planning Manager. In this position he is
in charge of managing the corporate and region cost initiatives for all production elements. This job also
involves planning, technology training, vehicle management, and logistics. In 1987, Mr. LaCross
received his BS degree in Business from Francis Marion University. In 1996 he received an A.T. degree
from ICS College in Industrial Engineering Technology. In 1998 he began working on his MBA at
Charleston Southern University. He is also an active member on the Institute of Industrial Engineers and
was recently nominated to the Lexington Who's Who of executive employees.  Mr. LaCross is the
grandson of Keith Hicks, a director of PACEL.

***Kenneth J. Russman*****was appointed Vice President, Chief Operating Officer, Treasurer and
Secretary of EBStor, in September 2000.  Prior to
his position with EBStor, Mr. Russman served as Technical Manager for PACEL from
April 1999 to September 2000.  Mr. Russman was a software engineer for Interactive Media Corp., a
computer-based training firm located in McLean, Virginia, from November 1996 until April 1999.  As a
software engineer at Interactive Media Corp., his duties included computer programming and project
management responsibilities.  Mr. Russman also served as a research and design engineer for Analysis
and Technology, Inc., an engineering services firm located in Arlington, Virginia from May 1993 to
November 1996. His responsibilities included the design, development, implementation, management
and documentation of logistics models and information management systems for the Navy Logistics
Office.  From June 1985 to May 1993, Mr. Russman worked as a system test software engineer for
Martin Marietta Corporation in Orlando, Florida.  His responsibilities at Martin Marietta included
coordinating the buildup, testing and evaluation of electro-optical and servo systems and software
testing.  Mr. Russman received his Bachelors of Science degree in Electrical Engineering from Michigan

Technological University in 1985 and his Masters of Science degree in information systems from George
Washington University in 1998.

***Richard Bingler***** is the Vice President of Operations for PACEL. Mr. Bingler has more than 20 years in the
Information Technology field. He has consistently progressed in the IT arena as a programmer, systems
administrator, consultant and corporate officer. He holds a Bachelor's degree in Computer Science from
the State University of New York at New Paltz and a Master's degree in Computer Science from Marist
College in Poughkipsie, NY.

***Lyndon Thompson, CPA***** is the Corporate Controller PACEL and EBStor.
Mr. Thompson received a BS in Accounting from Southeastern University in 1996. Previous positions
included Financial Analyst for KPMG's Barents Group, where he was responsible for financial
statements analysis, Accountant for Kiplinger Washington Editors, where he was responsible for the
accounting for benefit plans and financial statements, and U.S. Steel Agricultural Chemicals Division
where he was and internal auditor. He has had more than fifteen years of experience in accounting, areas
of experience includes Public Accounting, Financial Reporting, SEC Reporting, Employee Benefits, and
Tax reporting.

***Lisa B. Smith***** is the Director of Business Development.  Ms. Smith has 17 years of experience in the
computer and information security industry. Her experience includes 12 years of management and direct
experience selling security-related software, hardware and technical services to both the commercial and
government sectors. She joined PACEL. as Director of Sales previously; she was Director of Sales for
Integrated Management Services, Inc. (IMSI), a small business specializing in information security and
computer-based training, from 1996 to 2000.  Ms. Smith served as Director of Business Development,
Commercial Sector, for Litronic Information Systems, Inc. from 1995-1996; Sales Engineer for Racal-Guardate, Inc. from 1988 to 1996; and Corporate Trainer for Raytheon from 1986to 1988. She earned a
B.I.S. degree from George Mason University in 1990 and is an MBA Candidate at Strayer University.

********Item 2. Properties**

PACEL is located in Manassas, Virginia with offices at 8870 Rixlew Lane, Suites 201 and 204.  We
lease approximately 8200 square feet of a stone constructed office building for a cost of $10,200.00 per
month.  Our lease is a full service lease and continues until December of 2004, providing us with known
increases that assist us in cash flow management. In the opinion of management we have adequate
property, business liability and optional insurance coverage provided through the year 2002. In general,
all facilities are in good condition and are operating at capacities that range from 75% to 100%.

**Item 3. Legal Proceedings**

From time to time we are involved as plaintiff or defendant in various legal actions arising in the normal course of business.  We do not anticipate incurring any material liability as a result of such
litigation.

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

Not applicable.

**PART II**

**Item 5. Market for Registrant's Common Stock and Related Stockholder Matters**

Our common stock is traded on over-the-counter Electronic Bulletin Board under the symbol "PLRP."
On December 31, 2000 there were 194 holders of record of our common stock. Because many of such
shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the
total number of stockholders represented by these record holders. The following table sets forth the high
and low sales price per share of our common stock , for the periods indicated, all of which are adjusted
to give effect to a 4-for-1 stock split, in April of 1998 and a 1-for-4 reverse stock split that became
effective on December 31, 1998.  The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not represent actual transactions.

|               | **Price Range**
|-------------- | ---------------
|               | **High**       
|2000:          |                
|First Quarter  | $1.0000        
|Second Quarter | 0.6562         
|Third Quarter  | 0.1800         
|Fourth Quarter | 0.1100         
|Year           | 1.0000         
|1999:          |                
|First Quarter  | $0.6000        
|Second Quarter | 1.4360         
|Third Quarter  | 1.0300         
|Fourth Quarter | 0.3000         
|Year           | 1.4360         







******Item 6. Management's Discussion and Analysis of Financial Condition and Results of Operations**

Management's discussion and analysis of results of operations and financial condition, include a
discussion of liquidity and capital resources.**The following discussion (presented in hundreds, except per
share amounts) should be read in conjunction with the consolidated financial statements and notes
thereto.

**Overview**

PACEL's mission is to provide consumers and businesses with a full suite of products and services that
provide secure connectivity to and from the Internet, including e-commerce transactions and personnel
and company data security.  To that end PACEL and its subsidiaries have been developing products and
methods that meet that need for both families and companies.  The ChildWatch software suite of
programs puts the controls for family computer usage, including internet filtering, access controls and
community support for finding missing and abducted children in the hands of the parents and is readily
available at Zany Brany and Electronic Boutique stores nationally.  "e-Centurion" our latest technology
advancement (patent pending) software product will provide complete file and data security. This new
software is designed to guard both the Inner Door (full protection on your PC from existing and new
viruses), i.e., the Love Bug, and someone trying to penetrate your PC and by-pass your password, and the
Outer Door (full Intruder protection from Internet data collection devices and programs or hackers). Our
current goal is to utilize and extend these technologies in the production of derivative products to provide
secure Internet connectivity and enhanced desktop security for customers in the home and business
marketplaces.



|                                                                  | For the Years Ended
December 31,
|----------------------------------------------------------------- | --------------------------------
|                                                                  | ****2000                        
|****                                                              | ****                            
|**Consolidated Statement of Operations Data:**                    | ****                            
|Net Sales                                                         | ****$    244,971                
|Operating Costs and Expenses                                      | 3,582,256                       
|Net Income (loss)                                                 | (3,337,285)                     
|****Basic and Diluted net income (loss) per common share          | (0.14)                          
|Weighted average common shares outstanding-
    basic and diluted | 24,609,704                      

|                                    
|------------------------------------
|                                    
|****                                
|**Consolidated Balance Sheet Data:**
|Cash and Cash Equivalents           
|Working capital (deficit)           
|Total assets                        
|Stockholders' equity (deficit)      



Twelve Months Ended December 31, 2000 Compared to Twelve Months Ended December 31, 1999

Revenues increased 139% to $244,971 in 2000 compared to $102,464 in 1999. The increase in
revenues is directly attributed to the sales generated from existing NATO contracts of FCL. The Company intends to continue to focus its efforts on the marketing
of ChildWatch software and e-Centurion anti-virus software. Only limited revenues from the
ChildWatch software have been realized due to marketing delays due in part to planned affiliations for
marketing either not materializing or developing at a slower pace than anticipated.

Research and Development expenses consist principally of salaries for software developers,
outside consulting, related facilities costs, and expenses associated with computer equipment used in
software development. Research and development expenses increased 6% to $969,971 in  2000
compared to $918,366 in 1999. The increase reflects our increased investments in new technologies, new
product development, and the infrastructure to support such activities.  We believe that investments in
research and development, including the recruiting and hiring of software developers, are critical to
remain competitive in the marketplace and are directly related to continued timely development of new
and enhanced products. We will continue to make significant investments in the development of our
application software products, including those targeted for the growing Internet market.

Sales and marketing expenses include salaries and benefits, sales commissions, travel expenses,
and related facilities costs for our sales, marketing, customer support, and distribution consultants. Sales
and marketing expenses also include the costs of programs aimed at increasing revenue, such as
advertising, trade shows, public relations, and other market development programs. Sales and marketing
expenses increased 1,488% to $622,525 in 2000 compared to 40,206 in 1999 primarily as a result of the
cost to produce and distribute promotional discs of the ChildWatch program, in an effort to
increase the focus on the sales and distribution of our products. Sales and marketing expenses also
increased year over year, due to increased advertising, promotional, and trade show expenses associated
with new product releases.  Additionally, sales and marketing expenses included higher outside labor
costs to support marketing.

General and administrative expenses consist principally of salaries and benefits, travel expenses,
and related facilities costs for finance and administration, human resources, legal, information services,
and executive personnel of EBStor and PACEL. General and administrative expenses
also include outside legal and accounting fees, and expenses associated with computer equipment and
software used in the administration of the business. General and administrative expenses increased 278%
to $1,895,946, in 2000 compared to $502,042 in 1999, due to increased expenses for outside legal and
investment banking services associated with our SEC periodic reporting obligations as well as increased
employee costs and related depreciation expenses associated with increased staff.

Twelve Months Ended December 31, 2000 Compared to Twelve Months Ended December 31, 1999

In February 2001 we secured a $50,000 line of credit with a bank at an interest rate of Wall Street
Journal Prime plus 1.00% to be renewed yearly.  To date we have used the entire line, but as equity
financing comes available we expect to reduce the balance outstanding on this line and have it available
as an additional source of working capital.  The Company issued $250,000 of convertible
debentures.  The debetures bear an interest rate of 5% and are payable quarterly.  We also entered into a
$10,000,000 equity line of credit arrangement with Cornell Capital Partners, LLP.  Under the terms of the equity
line agreement, the Company will have the right to sell up to $10 million of its common stock.  The
Company has sole discretion, subject to certain volume limitations and conditions, to draw down upon
such funds, as its capital needs dictate.  Our ability to continue as a going concern is dependent upon
being able to access this equity line.  We believe that our current agreements for financing should
provide sufficient working capital for the year 2001.

We expect to continue our investing activities, including expenditures for computer systems for research
and development, sales and marketing, product support, and administrative staff. Furthermore, cash
reserves may be used to purchase treasury stock and acquire software companies, products, or
technologies that are complementary to our business.

Net cash used from operating activities for the year ended December 31, 2000 and 1999 was $2,989,979  and
$1,033,732, respectively.  The use of cash in operating activities for the year ended December 31, 2000
resulted primarily from the net loss.

Net cash used in investing activities for the year ended December 31, 2000 and 1999 was $120,704 and
$6,025 respectively.  This increase was due  to purchases of  additional computer and office equipment
for our expansion.

Net cash provided by financing activities for the year ended December 31, 2000 and 1999 was
$3,057,434 and $1,101,724, respectively.  The increase in cash provided was attributable to the sale of
common stock from the registered offering and increases in convertible notes payable taken out by the
company.

Diluted earnings per share incorporates the potential dilutions from all potentially dilutive securities that
would have reduced earnings per share.  Since the potential issuance of additional shares would reduce
loss per share they are considered anti-dilutive and are excluded from the calculation.

**Item 7. Financial Statements and Supplementary Data**

The consolidated financial statements included in this section are as follows:

|**Financial Statement Description** | **PAGE**
|----------------------------------- | --------

|
|

|Management's Report                                                                   | 19
|------------------------------------------------------------------------------------- | --
|Independent Auditors' Report                                                          | 20
|Consolidated Balance Sheets December 31, 2000 and December 31, 1999                   | 21
|Consolidated Statements of Operations Years Ended December 31, 2000, and 1999         | 22
|Consolidated Statements of Stockholders' Equity (Deficit) December 31, 2000, and 1999 | 23
|Consolidated Statements of Cash Flows Years Ended December 31, 2000,  and 1999        | 24
|Notes to Consolidated Financial Statements                                            | 25

**********MANAGEMENT'S REPORT**

Management is responsible for all the information and representations contained in the consolidated
financial statements and other sections of this Form 10-KSB. Management believes that the consolidated
financial statements have been prepared in conformity with generally accepted accounting principles
appropriate in the circumstances to reflect, in all material respects, the substance of events and transactions
that should be included, and that the other information in this Form 10-KSB is consistent with those
statements. In preparing the consolidated financial statements, management makes informed judgments and
estimates of the expected effects of events and transactions that are currently being accounted for.

In meeting its responsibility for the reliability of the consolidated financial statements, management
depends on the Company's system of internal accounting controls. This system is designed to provide
reasonable assurance that assets are safeguarded and transactions are executed in accordance with
management's authorization, and are recorded properly to permit the preparation of consolidated financial
statements in accordance with generally accepted accounting principles. In designing control procedures,
management recognizes that errors or irregularities may nevertheless occur. Also, estimates and judgments
are required to assess and balance the relative cost and expected benefits of the controls. Management believes
that the Company's accounting controls provide reasonable assurance that errors or irregularities that could
be material to the consolidated financial statements are prevented or would be detected within a timely period
by employees in the normal course of performing their assigned functions.

The Board of Directors pursues its oversight role for these consolidated financial statements through the
Audit Committee, which is comprised, solely of Directors who are not officers or employees of the Company.
The Audit Committee meets with management periodically to review their work and to monitor the discharge
of each of their responsibilities. The Audit Committee also meets periodically with Peter C. Cosmas Co.,
CPAs, the independent auditors, who have free access to the Audit Committee or the Board of Directors,
without management present, to discuss internal accounting control, auditing, and financial reporting matters.

Peter C. Cosmas Co., CPAs is engaged to express an opinion on our consolidated financial statements. Their
opinion is based on procedures believed by them to be sufficient to provide reasonable assurance that the
consolidated financial statements are not materially misleading and do not contain material errors.

By /s/ LYNDON C THOMPSON
--------------------------------------------------------------------------------
Lyndon C. Thompson, CPA



Controller
(Principal Financial and Accounting Officer)

March 27, 2001

**INDEPENDENT AUDITORS' REPORT**







To The Board of Directors
       PACEL Corp.

****       We have audited the accompanying consolidated balance sheet of Pacel Corp. and Subsidiaries as
of December 31, 2000 and 1999 and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for the years then ended.  These financial statements are the responsibility
of the Company's management.  Our responsibility is to express an opinion on these financial statements
based on our audit.

****

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

****

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

****

****       The accompanying consolidated financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 1(p) to the financial statements, the
Company has had minimal revenues since inception and requires additional capital to continue
operations.  These conditions raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1(p).  The financial statements
do not include any adjustments that might result from the outcome of this uncertainty.

****

Peter C. Cosmas Co., CPAs



370 Lexington Ave.
New York, NY 10017

March 28, 2001

|                                                                                                                                                                                  | December 31,2000 | December 31,1999
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ----------------
|**ASSETS**                                                                                                                                                                        |                  |                 
|Current assets:                                                                                                                                                                   |                  |                 
|Cash and cash equivalents                                                                                                                                                         | $   36,356       | $   95,631      
|Accounts receivable, net of allowance for doubtful
 accounts of $5,155 and $2,336 respectively                                                                                    | 9,883            | 41,577          
|Inventory                                                                                                                                                                         | 17,213           | 13,680          
|Other receivables                                                                                                                                                                 | 64,760           | -0-             
|Prepaid expenses                                                                                                                                                                  | 2,469            | 11,867          
|Total current assets                                                                                                                                                              | 130,681          | 162,755         
|Property and equipment, net of accumulated
 depreciation of $65,531 and $37,829 respectively                                                                                      | 141,882          | 48,880          
|Non-current assets:                                                                                                                                                               |                  |                 
|Note receivable                                                                                                                                                                   | 71,000           | 71,000          
|Goodwill                                                                                                                                                                          | 8,106            | 10,270          
|Security deposits                                                                                                                                                                 | 9,089            | 7,985           
|Total non-current assets                                                                                                                                                          | 88,195           | 89,255          
|Total assets                                                                                                                                                                      | $  360,758       | $  300,890      
|**LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                                                                                                |                  |                 
|Current liabilities:                                                                                                                                                              |                  |                 
|Notes payable convertible debenture                                                                                                                                               | $  531,389       | $  50,000       
|Notes payable bank                                                                                                                                                                | 50,000           | -0-             
|Accounts payable                                                                                                                                                                  | 491,926          | 291,812         
|Loans payable officers-Stockholders                                                                                                                                               | 62,741           | 14,000          
|Accrued expense                                                                                                                                                                   | 73,071           | 211,921         
|Total current liabilities                                                                                                                                                         | 1,209,127        | 567,733         
|Minority interestCommitments:                                                                                                                                                     |                  |                 
|Stockholders' equity (deficit)
Preferred stock, no par value, no liquidation value,
5,000,000 shares authorized, issued 1,000,000 shares
1997 class A convertible preferred stock | 11,320           | 11,320          
|                                                                                                                                                                                  |                  |                 
|Common stock - no par value,150,000,000 and 40,000,000
shares authorized in 2000and 1999 respectively, 39,348,486,
13,990,313 shares outstanding in 2000 and1999, respectively    | 5,155,914        | 2,394,129       
|                                                                                                                                                                                  |                  |                 
|Cumulative currency translation adjustment                                                                                                                                        | (10,833)         | (4,807)         
|                                                                                                                                                                                  |                  |                 
|Deficit                                                                                                                                                                           | (6,004,770)      | (2,667,485)     
|Total stockholders' equity (deficit)                                                                                                                                              | (848,369)        | (266,843)       
|Total liabilities and stockholders' equity                                                                                                                                        | $  360,758       | $  300,890      









---

|                                    |              |             
|----------------------------------- | ------------ | ------------
|                                    | 2000         | 1999        
|                                    |              |             
|Net Sales                           | $    244,971 | $    102,464
|Operating costs and expenses:       |              |             
|Research and development            | 969,971      | 918,366     
|Depreciation & Amortization         | 30,530       | 17,636      
|Interest expense                    | 63,284       | 176,091     
|Sales and Marketing                 | 622,525      | 40,206      
|General and Administrative          | 1,895,946    | 502,042     
|Total operating costs and expenses  | 3,582,256    | 1,654,341   
|Net (loss)                          | $(3,337,285) | $(1,551,877)
|Net  (loss) per common share        |              |             
|Basic                               | (0.14)       | (0.19)      
|Diluted                             | (0.14)       | (0.19)      
|Weighted Average shares outstanding |              |             
|Basic                               | 24,609,704   | 8,014,285   
|Diluted                             | 24,609,704   | 8,014,285   







---

|                                                                       | Preferred Stock | Common Stock |            |            |              
|---------------------------------------------------------------------- | --------------- | ------------ | ---------- | ---------- | -------------
|                                                                       |                 |              |            |            |              
|                                                                       |                 |              |            |            | Retained     
|                                                                       |                 |              |            |            | Earnings     
|                                                                       | Shares          | Amount       | Shares     | Amount     | (Deficit)    
|                                                                       |                 |              |            |            |              
|Balance, December 31, 1998                                             | 1,000,000       | $11,320      | 5,834,325  | $  959,191 | $(1,115,608) 
|                                                                       |                 |              |            |            |              
|Issuance of common stock andwarrants net of expenses                   |                 |              | 7,307,975  | 1,164,169  |              
|                                                                       |                 |              |            |            |              
|Issuance of common stock of
professional  services                     |                 |              | 848,013    | 170,769    |              
|                                                                       |                 |              |            |            |              
|Grant of common stock options
exercisable below market on dateof grant |                 |              |            | 100,000    |              
|                                                                       |                 |              |            |            |              
|Effect of currency translation                                         |                 |              |            |            |              
|                                                                       |                 |              |            |            |              
|Net loss                                                               |                 |              |            |            | (1,551,877)  
|                                                                       |                
|Balance, December 31, 1999                                             | 1,000,000       | 11,320       | 13,990,313 | 2,394,129  | (2,667,485)  
|                                                                       |                 |              |            |            |              
|Issuance of common stock and
warrants net of expenses                  |                 |              | 21,506,507 | 2,527,721  |              
|                                                                       |                 |              |            |            |              
|Issuance of restricted common
stock forprofessional services           |                 |              | 1,450,000  | 116,629    |              
|                                                                       |                 |              |            |            |              
|Issuance of common stock for
professional services                     |                 |              | 2,366,666  | 110,435    |              
|                                                                       |                 |              |            |            |              
|Conversion of employee common
stock options                            |                 |              | 35,000     | 7,000      |              
|                                                                       |                 |              |            |            |              
|Effect of currency translation                                         |                 |              |            |            |              
|                                                                       |                 |              |            |            |              
|Net loss                                                               |                 |              |            |            | (3,337,285)  
|                                                                      
|Balance, December 31, 2000                                             | 1,000,000       | $  11,320    | 39,348,486 | $5,155,914 | $(6,004,770))
|                                                                      



**PACEL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,**

|                                                                                             | **2000**     | **1999**    
|-------------------------------------------------------------------------------------------- | ------------ | ------------
|                                                                                             |              |             
|Cash flows from operating activities:                                                        |              |             
|Net (loss)                                                                                   | $(3,337,285) | $(1,551,877)
|Adjustments to reconcile net (loss) to net cash
 (used in) provided by operating activities: |              |             
|Depreciation                                                                                 | 27,702       | 17,636      
|Provision for Bad Debts                                                                      | 2,819        | 2,336       
|Other non cash items                                                                         | 235,740      | 325,171     
|Increase (Decrease) in Cash from changes in:                                                 |              |             
|Accounts receivable                                                                          | 28,875       | (25,028)    
|Other receivables                                                                            | (64,760)     | 60,350      
|Inventory                                                                                    | (3,533)      | (13,680)    
|Other assets                                                                                 | -0-          | 1,100       
|Security deposits                                                                            | (1,104)      | (2,502)     
|Good will                                                                                    | 2,164        | (10,270)    
|Prepaid expenses                                                                             | 9,398        | 3,133       
|Accounts payable                                                                             | 200,114      | 224,858     
|Accrued expense                                                                              | (138,850)    | 54,041      
|Loans Payable Officers-Stockholders                                                          | 48,741       | (119,000)   
|Net cash (used in) operating activities                                                      | (2,939,980)  | (1,033,732) 
|                                                                                             |              |             
|                                                                                             |              |             
|Cash flows from investing activities:                                                        |              |             
|                                                                                             |              |             
|Purchase of property and equipment                                                           | (120,704)    | (9,025)     
|Notes Receivable                                                                             | -0-          | 3,000       
|                                                                                             |              |             
|Net cash used in investing activities                                                        | (120,704)    | (6,025)     
|                                                                                             |              |             
|Cash flows from financing activities:                                                        |              |             
|                                                                                             |              |             
|Notes payable Convertible debenture                                                          | 481,389      | 15,000      
|Notes payable bank                                                                           | 50,000       | -0-         
|Proceeds from sale of common stock                                                           | 2,526,045    | 1,086,724   
|                                                                                             |              |             
|Net cash provided by financing activities                                                    | 3,007,434    | 1,101,724   
|Effect of exchange rates on cash                                                             | (6,026)      | 4,807       
|                                                                                             |              |             
|Net increase (Decrease) in cash and cash equivalents                                         | (59,275)     | 66,774      
|                                                                                             |              |             
|Cash and cash equivalents at beginning of year                                               | 95,631       | 28,857      
|                                                                                             |              |             
|Cash and cash equivalents at end of period                                                   | $     36,356 | $     95,631
|                                                                                             |              |             
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                             |              |             
|Cash paid for interest                                                                       | 4,835        | 1,727       
|                                                                                             |              |             



**PACEL CORP. AND SUBSIDARIES
NOTES TO CONSOLIDATED FINANCIAL STATMENTS
DECEMBER 31, 2000 AND 1999**



**1.    Summary of Significant Accounting Policies**:

**a)  Nature of the business**

PACEL Corp. (the "Company") was incorporated on May 3, 1994 under the laws of the State of Virginia. The Company
was formed for the purpose of developing and marketing its own computer software programs.  To date, the Company has
developed and is marketing several versions of its interactive electronic procedure software to be used with Microsoft
Windows.  These products include the "Visual Writer System", "Win Sentry","Zoomer" and the latest software product
family suites of " ChildWatch" and now "e-Centurion" are preparing to come to the market.

The Company has completed research and development and testing activities on the ChildWatch Suite of Programs,
including " ChildWatch Lite (a freeware program) and ChildWatch (a retail program to be released in the second quarter
of 2001) and has funded the development of these software programs through management contributions of money, time
and materials, investor financing and limited sales of software.  It has hired personnel and developed consulting relationships
to position itself with the move into retail marketing and sales of it software programs.



**b)  Principles of consolidation**

The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a
controlling interest is maintained.  All significant inter-company accounts and transactions have been eliminated in
consolidation.  For those consolidated subsidiaries where Company ownership is less than 100%, the minority
stockholders' interest are shown as a minority interest.  Investments in affiliates over which the Company has significant
influence but not a controlling interest are carried on the equity basis.



**c)  Cash and cash equivalents**

****

****Cash equivalents consist of liquid investments, with a maturity of three months or less at the time of purchase.  Cash
equivalents are stated at cost, which approximate market value.



**d)  Inventories**

****

****Inventories are stated at the lower of cost or market, which approximates actual cost, using the first in, first out method.



**e)  Property and Equipment**

****

****Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is determined
using the straight-line method over the estimated useful lives of the assets. Estimated useful lives of 24 to 36 months are
used on computer equipment and related software, five years for office equipment, furniture, and fixtures. Depreciation
and amortization of leasehold improvements is computed using the shorter of the remaining lease term or five years.
Maintenance and repairs are charged against income and betterments are capitalized.



**f)  Reclassification**

****

****Certain prior year amounts have been reclassified to conform to current year's presentation.



**g)  Revenue recognition**

****

****Revenue is recognized when earned.  The Company's revenue recognition policies are in compliance with American
Institute of Certified Public Accountants Statement of Position 97-2.  Software Revenue Recognition.  Revenue from
products licensed to original equipment manufacturers is recorded when the manufacturers ship licensed products while
revenue from organization license programs are recorded when the software has been delivered and the customer is
invoiced.  Revenue from packaged product sales to distributors and resellers is recorded when related products are
shipped.  Maintenance and subscription revenue is recognized ratably over the contract period.  Revenue attributable to
significant support is based on the price charged or derived value of the undelivered elements and is recognized ratably



**h)  Advertising Costs**

****

****The Company expenses all advertising costs as incurred.

****

**i)  Research and Development Expenses**

****

****Costs incurred in the product development of new software products are expensed as incurred until technological
feasibility has been established. Software development costs, which are required to be capitalized pursuant to Statement
of Financial Accounting Standards No. 86, "Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed," have not been material to date. To date, the establishment of technological feasibility of the
Company's products and general release substantially coincide. As a result, the Company has not capitalized any
software development costs.



**j)  Use of Estimates**

****

****The preparation of financial statements and related disclosures in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts in the Consolidated
Financial Statements and accompanying notes.



**k)  Impairment of long-lived Assets**

****

****Effective January 1, 1996, the Company adopted SFAS NO. 121, "Accounting for the Impairment of long-lived Assets
and for long-lived Assets to be Disposed of." SFAS 121 required the Company to review the recoverability of the
carrying amounts of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount
of the asset might not be recoverable.

****

****Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Determination of recoverability is based on an estimate of discounted future cash flows resulting from the use of the
asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable
intangible assets that management expects to hold and use are based on the fair value of the asset. Long-lived assets and
certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less
costs to sell.



**l)  Foreign Currency Translation**

****

****The financial statements of the Company's foreign subsidiaries are measured using the local currency as the functional
currency.  Assets and liabilities of these subsidiaries are translated at exchange rates as of the balance sheet date with the
resulting translation adjustments recorded directly to a separate component of shareholders' equity. Income and expense
accounts are translated at average exchange rates during the year. The resulting cumulative translation adjustments are
included in the consolidated and combined statements of operations and were not material for any periods presented
herein.



**m)  Segment Information**

****

****SFAS No. 13 1, "Disclosures about Segments of an Enterprise and Related Information" establishes standards for
reporting information about operating segments in financial statements.  Operating segments are defined as components
of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating
decision maker, or chief decision making group, in deciding how to allocate resources and in assessing performance.
The Company operates in one segment.



**n)  Fair Value Disclosures**

****

****The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, inventories,
accounts payable and accrued expenses, approximate fair value because of the immediate or short-term maturity of
these financial instruments.



**o)  Stock Options**

****

****The Company accounts for its stock options in accordance with the provisions of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations.  As such, compensation
expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the
exercise price.  On January 1, 1996, the Company adopted the disclosure requirements of Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-based Compensation.  Had the Company determined
compensation cost based on fair value at the grant date for stock options under SFAS No. 123 the effect would have
been immaterial.



**p)   Basis of Financial Statement Presentation**

****

****The accompanying financial statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has generated
minimal revenues from inception to December 31, 2000.  These factors indicate that the Company's continuation, as a
going concern is dependent upon its ability to obtain adequate financing.  See Note 14 detailing equity financing
arrangements.



**q)  Impact of Recently Issued Accounting Standards**

****

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" and in June 2000 issued SFAS 138,
accounting for certain Derivative Instruments and Certain Hedging Activities, an amendment of SFAS 133.  These new
standards require companies to record derivative financial instruments on the balance sheet as assets or liabilities,
measured at fair value.  Gains or losses resulting from changes in the fair value of those derivatives would be accounted
for based on the use of the derivative and whether the instrument qualified for hedge accounting, as defined in SFAS
133 and 138.  The Company is required to implement these statements in the first quarter of fiscal 2001.   The company
has not used derivative instruments and believes the impact of adoption of this statement will not have a significant
effect on the financial statements.



In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101, as amended, summarizes certain of the SEC's
views in applying generally accepted accounting principles to revenue recognition in financial statements. At this time,
management does not expect the adoption of SAB 101 to have a material effect on the Company's operations or
financial position.



In March 2000, the Financial Accounting standards Board, released FASB Interpretation No. 44, " Accounting for
Certain Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25," which provides
clarification of Opinion No. 25 for certain issues, such as the determination of who is an employee, the criteria for
determining whether a plan qualifies as a non-compensatory plan, the accounting consequence of various modifications
to the terms of a previously fixed stock option  or award, and the accounting for an exchange of stock compensation
award  in a business combination.  The Company believes that its practices are in conformity with this guidance, and
therefore Interpretation No. 44 will have no impact on its financial statements.



**2)    Business Combinations:**

****

****On October 22, 1999 PACEL Corp. acquired all of the outstanding stock 29,055 shares of Fairfax Communications
Limited for $30,000, which included $57,774 of assumed debt.  The acquisition was accounted for as a purchase
under Accounting Principles Board Opinion No. 16 (APB no. 16).  In accordance with APB No. 16, the Company
allocated the purchase price based on the fair value of the assets acquired and liabilities assumed.  Good will resulting
for the purchase of $10,811 was recognized and will be amortized over a five-year period $2,164 and  $541 were
charged to amortization expense respectively in 2000 and 1999.

In July 1999, the Company formed an eighty- percent owned subsidiary, E-Business Store.Com Inc. for the purpose
of expanding its Internet business.  The 20% minority interest is owned equally by David and F. Kay Calkins.  The
subsidiary operated at a loss, the minority's 20% share of the loss of $163,823 is not reflected in the statement of
operations.

******3)    Property and Equipment:**

Property and equipment consist of the following:

|                               | December 31,
|------------------------------ | ------------
|                               | 2000        
|Computers and office Equipment | $210,240    
|
|Less accumulated depreciation  | 68,359      
|
|                               | $141,881    
|

******4)    Notes Receivable**

The company extended a long-term note to CTM Automated Systems, Inc. in the amount of $75,000 at an interest
rate of 5.25% payable monthly with a balloon payment October 2002. 1,000 shares of CTM stock collateralize the
loan.  The balance of the loan was $71,000 at December 31, 2000 and December 31, 1999.

****

******5)    Short Term Debt**

****

**a)  Note payable bank**

****

****The Company borrowed $50,000 from the bank in the from of a short-term note due February 20,2001 at an interest
rate of 8.5%.

****

**b)  Convertible Notes payable**

****

****The Company had convertible notes of $531,389 and $50,000 December 31, 2000 and 1999 respectively.  The notes
bear an interest rate of 7% and 11% in 2000 and 1999 respectively. In conjunction with the notes the Company issued
Common Stock purchase warrants to the lender in consideration for execution of the financing agreements.

****

****Under the terms of the warrant agreements, the exercise price of the warrants and the number of shares purchasable
with each warrant are adjusted when converted.  On the conversion date, the exercise price of the warrant is 70% of
the average market price of the stock for the five days prior to conversion.  This discount from market amounted to $
-0- and $175,000 in 2000 and 1999 respectively, and was charged to interest expense.





**6)    Income Taxes**

********

****The Company provides for the tax effects of transactions reported in the financial statements. The provision if any,
consists of taxes currently due plus deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and liabilities, if any, represent the future tax
return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are
recovered or settled.  As of December 3 1, 2000 and 1999, the Company had no material current tax liability, deferred
tax assets, or liabilities respectively.  The Company has available a net operating loss carry forward of approximately
$6 million for tax purposes to offset future taxable income.  The net operating loss carryforwards expire in 2011-2019.

****

**7)    Earning (Loss) Per Share**:****

****

In February 1997, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards
("SFAS") No. 128.  "Earnings Per Share" applicable for financial statements issued for periods ending after December
15, 1997.  As required the Company adopted "SFAS" No. 128 for the year ended December 31, 1997 and restated all prior
period earnings per share figures.  The Company has presented basic earnings per share.  Basic earnings per share exclude
potential dilution and are calculated by dividing income available to common stockholders by the weighted average
number of outstanding common shares.  Diluted earnings per share incorporate the potential dilutions from all potentially
dilutive securities that would have reduced earnings per share.  Since the potential issuance of additional shares would
reduce loss per share they are considered anti-dilutive and are excluded from the calculation.

Basic net income per common share is computed using the weighted-average number of common shares outstanding
during the period. Diluted net income per common share is computed using the weighted-average number of common
and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares consist of stock
options. Share and per-common share data for all periods presented reflect the effect of a 4-for-1 stock split, in April of
1998 and a 1-for-4 reverse stock split that became effective on December 31, 1998.

The weighted average number of shares used to compute basic earnings (loss) per share was 24,609,704 and 8,014,285
at December 31, 2000 and 1999 respectively**.**

****

**8)    Commitments and Contingencies:**

**Operating Leases**

Future annual minimum lease payments under all non-cancelable operating leases as of December 31, 2000 are as follows:****

****

|2001                         | $227,677
|---------------------------- | --------
|2002                         | 162,641 
|2003                         | 135,870 
|2004                         | 22,641  
|                             |         
|Total Minimum Lease Payments | $548,829

****

****Rent expense for December 31, 2000and 1999 was $143,496 and $60,321 respectively

****

******9)    Stockholders' Equity:**

****

**a)  Preferred Stock:**

****

****The Company's Amended Certificate of Incorporation authorizes 5,000,000 shares of no par, no liquidating value
preferred stock, of which 1,000,000 shares have been designated the 1997 class A Convertible Preferred Stock.  The
number of shares of the 1997 Class A shall be limited to 1,000,000.  The Board of Directors of the Company has the
authority to establish and designate any shares of stock in series or classes and to fix any variations in the designations,
relative rights, preferences and limitations between series as it deems appropriate, by a majority vote.

****

****The shares of the 1997 Class A Convertible Preferred Stock shall have no liquidation value, and shall be entitled to
receive, out of any funds of the Company at the time legally available for the declaration of dividends, a per share
participating dividend equivalent to that declared and or paid with respect to a share of Common Stock.

At any time after June 30, 2000, the Company, at the option of the Board of Directors, may redeem the whole of or part
of, the 1997, Class A Convertible Preferred Stock by paying in cash $ .001 per share and in addition an amount equal to
all unpaid dividends.

****

**b)  Common Stock:**

****

On November 28, 2000, the shareholders of the Company approved an increase to the authorized number of shares of
common stock from 40 million to 150 million shares, on December 8, 2000; the Board of Directors approved the increase.

****

****The authorized common stock of the Company consists of 150,000,000 and 40,000,000 shares at December 31, 2000
and 1999 respectivel**y** without par value.  In April of 1998 the Company effected a forward recapitalization of the
number of shares of common stock outstanding in a ratio of 4 to 1 restating the number of shares of common stock
outstanding from 4,410,000 to 18,825,200 shares of common stock without par value.  In May, 1997 the Company
effected a forward recapitalization of the number of shares of common stock outstanding in a ratio of 30,000 to 1
restating the number of shares of common stock outstanding from 147 shares,  $1.00 par value per share to 4,410,000
shares of common stock without a value.  In October 1999, the Company effected a one-for-four reverse split restating
the number of common shares as of December 31, 1998 from 23,337,298 to 5,834,325.  All references to average
number of shares outstanding and prices per share have been restated retroactively to reflect the split.

****

******10)   Related Party Transactions:**

****

**a)  Issuance of Common Stock**

****

The Company sold an aggregate of 100 shares to David and F. Kay Calkins for $2,000. These shares were split in May
1997 in a ratio of 30,000 to 1 restating the number of common shares owned by David and F. Kay Calkins from 100 to
3,000,000 after adjustment for splits reverse splits.

****

**b)  Officers Loans**

****

The Company borrowed an aggregate of $58,741 from David and F. Kay Calkins in loans and unreimbersed business
expenses.



The Company recorded a liability to David and F. Kay Calkins in the amount of $4,000 and $14,000 at December 31,
2000 and December 31, 1999 respectively, for accrued payroll. On September 30, 1999 the Company issued an Option
to David and F. Kay Calkins to purchase 625,000 shares of common stock at $.16 per share in lieu of $50,000 of
compensation owed.  The market price of the shares at the grant date was $.32 As a result, additional compensation
expenses was recorded in the amount of $100,000 on September 30, 1999





**c)  Employment Agreements**

****

In 2000 the Company entered into employment agreements with David and F. Kay Calkins. At base salaries of $175,000
and $160,000 per year respectively, effective January 1, 2001 and are eligible for retroactive increases based on earnings
per share of the Company.

****

**11)   Business and Credit Concentrations:**

****

****The amount reported in the financial statements for cash, trade accounts receivable and investments approximates fair
market value.  Because the difference between cost and the lower of cost or market is immaterial, no adjustment has
been recognized and investments are recorded at cost. Financial instruments that potentially subject the company to
credit risk consist principally of trade receivables.  Collateral is generally not required

****

******12)   Comprehensive Income:**

****

At December 31, 2000 and 1999 net income and comprehensive income were the same.

****

**13)   Stock Option Plan:**

****

**a)  Key Employee Stock Option Plan**

****

In June 1998 the Company adopted the Key Employees Stock Option Plan. 250,000 shares were reserved********under the Plan.
The Board of Directors administers the Plan.  Options are granted at market price the date of the grant and vest 20% per
year.  Options for 215,000 shares have been issued under the plan, with an exercisable price between $.17 and $.20 per
share, and a five year vesting period" Options for 40,000 shares have vested.  In 2000 35,000 shares were exercised at
a price of $.20 per share.

****

**b)  1999 Stock Option and Incentive Plan**

****In November 2000 the Company adopted1999 Stock Option and Incentive Plan. The maximum number of shares
under the 1999 Plan 5,000,000 shares of PACEL common stock.

Although the Board of Directors has the authority to set other terms, The committee may grant options to directors,
advisory directors, officers and employees of PACEL and its subsidiaries.  The committee will select persons to receive
options among the eligible participants and determine the number of shares underlying the options to be granted. Under
the terms of the stock option plan, the committee may grant options to purchase shares of PACEL common stock at a price
which may not be less than the fair market value of the common stock, as determined by the mean between the closing
bid and asked quotations on the NASDAQ Stock Market on the date the option is granted.

Generally, options under the stock option plan may not be exercised later than 15 years after the grant date. Subject to
the limitations imposed by the provisions of the Internal Revenue Code, certain of the options granted under the stock
option plan may be designated "incentive stock options."  Incentive stock options may not be exercised later than ten years
after the grant date.  Options, which are not designated and do not otherwise qualify as incentive stock options in this
document, are referred to as "non-qualified stock options."

The Company is required under Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), to disclose pro forma information regarding option grants made to its employees based
on specified valuation techniques that produce estimated compensation charges. These amounts have not been reflected
in the Company's Consolidated Statements of Operations because to date no options have been granted under this plan.

**c)  Warrants:**

On February 14, 2000 the board of directors granted options to David and F. Kay Calkins to purchase 1,399,031 shares each of
the Company's common stock at an exercise price of $.21.

**14)   Subsequent Events**

****

****On February 20, 2001 the Company secured a $50,000 line of credit with an interest rate of Wall Street Journal Prime
Rate plus 1.00% to be renewed yearly.

****

****In March 2001 the company entered into a $10,000,000 Equity line of Credit arrangement with the May Davis Group,
under the terms of the equity line agreement, the Company will have the right to sell up to $10 million of its common
stock.  The Company has sole discretion, subject to certain volume limitations and conditions, to draw down upon such
funds, as its capital needs dictate.  The sale price of the common stock will be 91% of the lowest closing bid price of
common stock over the 10 trading day period beginning on the Put Date and ending on the relevant closing date of the
particular traunche.  In connection with such financing May Davis Group has been issued 5,555,556 shares of restricted
common stock and warrants to purchase 250,000 of common stock at a price of $.099 per share. The warrants expire
March 14, 2001.

In March 2001 the Company entered into a $250,000 convertible debenture.  The notes bear an interest rate of 5% and
are payable quarterly.  In conjunction with the notes the Company issued warrants to purchase 250,000 Common Stock
at an exercise price of $.099 per share. The warrants expire March 14, 2006.

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

There were no disagreements on any matter of accounting principles, financial statement disclosure, or
auditing scope or procedure to be reported under this item.

****

**PART III**

**Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
              with Section 16(a) of the Exchange Act**

********DIRECTORS**

The table below sets forth information regarding our board of directors, including their age,
position with PACEL and term of office.

|**Name**              | **Age as****of the****Record
Date** | **Position(s) Held**                       | **Elected****Director** | **Term****Expires**
|--------------------- | ----------------------------------- | ------------------------------------------ | ----------------------- | -------------------
|                     
|David E. Calkins      | 54                                  | Chief Executive
Officer                    | 1994                    | 2001               
|F. Kay Calkins        | 39                                  | Vice President
and Chief Operating Officer | 1998                    | 2001               
|Keith P. Hicks        | 75                                  | Director                                   | 1998                    | 2001               
|Corey Michael LaCross | 35                                  | Director                                   | 2000                    | 2001               

****You will find additional information regarding our Directors in "Item 1." Business of this report in the
section titled "Executive Officers".

**EXECUTIVE OFFICERS**

You will find information with respect to executive officers in "Item 1." Business of this report.

**Compliance with Section 16(a)**

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive
officers, and persons who own more than 10% of a registered class of PACEL equity securities,
to file with the SEC initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of PACEL.  Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms
they file.

To our knowledge, based solely on a review of the copies of such reports furnished to the
us and written representations that no other reports were required, all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10 percent beneficial owners
were complied with during the fiscal year ended December 31, 2000, except for Mr. LaCross
who inadvertently failed to timely file his Form 3, Initial Statement of Beneficial Ownership.

******Item 10. Executive Compensation**

|**Annual Compensation**                  | **Long Term****Compensation** | ****         
|---------------------------------------- | ----------------------------- | -------------
|**Name and Principal
Position**          | **FiscalYear**                | **Salary($)**
|DAVID E. CALKINS*Chief ExecutiveOfficer* | 2000                          | $124,996     
|1999                                     | 94,250                        | ---          
|1998                                     | 84,000                        | ---          
|F. KAY CALKINS*President EBStor, Inc.*   | 2000                          | $115,415     
|1999                                     | 90,500                        | ---          
|1998                                     | 77,000                        | ---          

******Item 11. Security Ownership of Certain Beneficial Owners and Management**

|                             | ******************Amount and Nature of
Common Stock
Beneficially Owned**
|---------------------------- | ------------------------------------------------------------------------
|**Name of Beneficial Owner** | **Number ofSharesBeneficiallyOwned(1)**                                 
|****Directors:               |                                                                         
|David E. Calkins(1)          | 4,024,031                                                               
|F. Kay Calkins(1)            | 4,024,031                                                               
|Keith P. Hicks(2)            | 320,091                                                                 
|Corey M. LaCross             | 28,983                                                                  



> *Represents less than one percent.(1)	David E. Calkins and F. Kay Calkins are husband and wife.  In the aggregate they beneficially own
> 8,048,062 shares of PACEL common stock.  Included in their individual amounts is the right of
> each of Mr. and Ms. Calkins to acquire 500,000 shares of common stock upon conversion of their
> 500,000 shares of 1997 Class A preferred stock and the right to acquire 2,024,031 shares upon
> exercise of outstanding stock options.
> 
> 
> (2)Includes 4,375 shares held solely by Mr. Hick's spouse.

**Item 12. Certain Relationships and Related Transactions**

******Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K**

(a)       Documents filed as part of this report 

           1       Financial statements

                   •       Management's Report

                   •       Independent Auditors' Report 

                   •       Consolidated Balance Sheets December 31, 2000 and December 31, 1999

                   •       Consolidated Statements of Stockholders' Equity December 31, 2000 and 1999

                   •       Consolidated Statements of Cash Flows Years Ended December 31, 2000 and 1999

                   •       Notes to Consolidated Financial Statements 

           2       Exhibits

**SIGNATURES**

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

| | PACEL CORP.

By: /s/ David E. Calkins
David E. Calkins
Chairman of the Board, President and
Chief Executive Officer
 (Duly Authorized Representative)
| | -----------------------------------------------------------------------------------------------------------------------------------------------------

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

|/s/ David E. Calkins
David E. CalkinsChairman of the Board, Presidentand Chief Executive Officer*(Principal Executive, Accounting and Financial Officer)*Date:  April 2, 2001 | /s/ F. Kay CalkinsF. Kay Calkins
Director, Secretary and TreasurerDate:  April 2, 2001
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------
|/s/ Keith P. Hicks
Keith P. HicksDirectorDate:  April 2, 2001                                                                                                                 | /s/ Corey Michael LaCrossCorey Michael LaCrossDirectorDate:  April 2, 2001            

(b)       Index to Exhibits

|Regulation S-B
Exhibit Number | Document                                                                                                                     | Reference toprior filing orExhibit Numberattachedhereto
|----------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------
|3.1                           | Articles of Incorporation, as amended and currently in effect                                                                | *                                                      
|3.2                           | Articles of Amendment to fix the Preference, Limitations and Relative Rights of the 1997-Class A Convertible Preferred Stock |                                                        
|3.3                           | Bylaws, as currently in effect                                                                                               | *                                                      
|4                             | Form of Pacel Corp. stock certificate                                                                                        | *                                                      
|10.1                          | Employment Agrement by and between Pacel Corp. and David E. Calkins                                                          | *                                                      
|10.2                          | Key Employees Incentive Stock Plan                                                                                           | *                                                      
|10.3                          | Class A Convertible Preferred Stock Agreement with David E. Calkins                                                          | *                                                      
|10.4                          | 1999 Stock Option and Incentive Plan                                                                                         | **                                                     
|10.5                          | Equity Line of Credit dated March 14, 2001                                                                                   | 10.4                                                   
|10.6                          | Securities Purchase Agreement dated March 19, 2001                                                                           | 10.5                                                   
|21                            | Subsidiaries of Pacel Corp.                                                                                                  | *                                                      



*Filed as exhibits to Pacel's Form SB-2 Registration Statement (file no. 333-91611) filed on November 24, 1999, pursuant to Section 5 of the Securities Act of 1933.  All of such previously filed documents are hereby incorporated herein by reference in
accordance with Item 601 of Regulation S-B.

**Filed as Appendix A to PACEL'S Definitive Proxy Statement filed on November 3, 2000.  This document is incorporated herein by reference in accordance with Item 601 of Regulation S-B.