U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-KSB

(Mark One)

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

     For the fiscal year ended December 31, 1999

     [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934 [No Fee Required]

     For the transition period from ______________ to ______________

                                         Commission file number 000-30468

                             CELEXX CORPORATION

        (Exact name of small business issuer as specified in its charter)

            Nevada                                                    65-0728991
     (State or other jurisdiction of                            (I.R.S. Employer
     incorporation or organization)                          Identification No.)


                          7251 West Palmetto Park Road,
                                    Suite 208
                               Boca Raton, Florida
                    (Address of principal executive offices)

                                  561-395-1920
                           (Issuer's telephone number)

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

         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.001 Par Value

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

     Check  if  disclosure  of  delinquent  filers  in  response  to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the best of the  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: $ 680,989

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant on March 31, 2000 was  approximately  $26,217,000  (based on the
last sale price as reported on the Over-The-Counter Bulletin Board).

     The number of shares  outstanding of each of the issuer's classes of common
equity as of March 31, 2000: Common Stock, $.001 Par Value - 12,912,613 shares

        DOCUMENTS INCORPORATED BY REFERENCE :

(1)      Form 10SB12G/A filed on February 11, 2000.

    Transitional Small Business Disclosure Format (check one): Yes ___ No _X_

                                       1
<PAGE>




                              Index to Form 10-KSB

                               CELEXX CORPORATION

                                     Part I

Item 1.   Description of Business............................................. 3
Item 2.   Description of Property............................................ 11
Item 3.   Legal Proceedings.................................................. 11
Item 4.   Submission of Matters to a Vote of Security Holders................ 11



                                     Part II

Item 5.   Market for Common Equity and Related Stockholder Matters........... 12
Item 6.   Management's Discussion and Analysis or plan
          of Operations...................................................... 12
Item 7.   Financial Statements............................................F1-F14
Item 8.   Changes In and Disagreements With Accountants on Accounting
          and Financial Disclosure........................................... 16

                                    Part III

Item 9.   Directors, Executive Officers, Promoters and Control Persons,
          Compliance With Section 16(a) of the Exchange Act.................. 17

Item 10.  Executive Compensation............................................. 19
Item 11.  Security Ownership of Certain Beneficial Owners and
          Management......................................................... 23
Item 12.  Certain Relationships and Related Transactions..................... 23

                                     Part IV

Item 13.  Exhibits and Reports on Form 8-K................................... 24

                                       2
<PAGE>





                                     Part I

Item 1. Description of Business

THIS ANNUAL REPORT ON FORM 10-KSB CONTAINS FORWARD-LOOKING  STATEMENTS THAT HAVE
BEEN MADE PURSUANT TO THE PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. THESE FORWARD-LOOKING  STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT
EXPECTATIONS,  ESTIMATES AND PROJECTIONS, BELIEFS AND ASSUMPTIONS. WORDS SUCH AS
"ANTICIPATES,"  "EXPECTS," "INTENDS," "PLANS," "BELIEVES," "SEEKS," "ESTIMATES,"
VARIATIONS OF SUCH WORDS AND SIMILAR  EXPRESSIONS  ARE INTENDED TO IDENTIFY SUCH
FORWARD-LOOKING  STATEMENTS.  THESE  STATEMENTS  ARE NOT  GUARANTEES  OF  FUTURE
PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT
ARE DIFFICULT TO PREDICT;  THEREFORE,  ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THOSE  EXPRESSED OR FORECASTED  IN ANY SUCH  FORWARD-LOOKING  STATEMENTS.  THESE
RISKS AND  UNCERTAINTIES  INCLUDE THOSE  DISCUSSED  BELOW UNDER "BUSINESS - RISK
FACTORS" ON  PAGES 10  THROUGH 13  AND  ELSEWHERE IN THIS FORM 10-KSB.  UNLESS
REQUIRED BY LAW, THE COMPANY  UNDERTAKES NO  OBLIGATION  TO UPDATE  PUBLICLY ANY
FORWARD-LOOKING  STATEMENTS,  WHETHER  AS A RESULT  OF NEW  INFORMATION,  FUTURE
EVENTS OR  OTHERWISE.  HOWEVER,  READERS  SHOULD  CAREFULLY  REVIEW THE  FACTORS
DISCUSSED IN OTHER REPORTS OR DOCUMENTS THAT THE COMPANY FILES FROM TIME TO TIME
WITH THE SECURITIES AND EXCHANGE COMMISSION,  PARTICULARLY THE QUARTERLY REPORTS
ON FORM 10-QSB AND ANY CURRENT REPORTS ON FORM 8-K.

OVERVIEW

     CeleXx Corporation ("CeleXx", the "Company" or "we") was organized
under  the laws of the State of Nevada on  February  19,  1997,  under the name,
"Spectrum  Ventures,  Inc." In  February  1999,  the  Company  merged with Cobra
Technologies  International,  Inc.,  a  Delaware  corporation  with the  Company
surviving.   The  name  of  the  surviving  corporation  was  changed  to  Cobra
Technologies,  Inc. and in August 1999 and November 1999 was further  changed to
CobraTec, Inc. and CeleXx Corporation, respectively.

     On February 18, 1999, the shareholders of Spectrum Ventures,  Inc. voted to
acquire all of the outstanding common stock of Cobra Technologies International,
Inc., a newly-formed Delaware corporation ("Cobra  International"),  pursuant to
an  Agreement  and Plan of  Reorganization  in  exchange  for  4,500,000  of the
Company's stock.

     Effective May 25, 1999, the Company acquired all of the outstanding  common
stock of Pinnacle East, Inc. a South Carolina corporation ("Pinneast"), pursuant
to an Agreement  and Plan of  Reorganization  for a value of  $900,000.  Payment
consisted of 500,000 shares of CeleXx common stock and $100,000 in cash. Payment
of the cash portion was deferred for one year.  Stephen  Lounsberry and Mitchell
N. Smith,  President and Vice President of Pinneast,  respectively,  also owning
100% of the outstanding capital stock of Pinneast,  received 275,000 and 225,000
common shares of CeleXx, respectively.

     CeleXx Corporation has a short operating  history,  and since its inception
has  generated  losses from  operations  on a  consolidated  basis  amounting to
$2,222,518.  At present,  the only material  business that has been successfully
combined with the Company is  Pinneast.com,  Inc.  While the Company  intends to
acquire  existing  businesses in accordance with its business plan, there can be
no assurances that the Company will be successful in its acquisition plans or in
securing financing to acquire such operating companies.

     To date,  the Company has not earned a profit and can give no assurances if
and when it will turn a profit.  Similarly,  because  of its  limited  operating
history and  accumulated  losses,  the  Company's  ability to attract  desirable
businesses for acquisition will be severely limited.  Moreover,  there can be no
assurance that such acquisition  candidates,  if found,  could be acquired under
terms  acceptable  to the  Company.  Consequently,  failure to complete  planned
acquisitions will severely limit the Company's ability to grow.

                                       3
<PAGE>

GENERAL

         CeleXx   Corporation   is   positioning   itself  as  an  acquirer  and
consolidator  of  Information  Technology  (IT)businesses.   In  general,  these
businesses  provide  services  such as  engineering  design  and  layout for the
installation of network systems,  Web site  development,  computer  hardware and
software  integration,  and  training  and ongoing  technical  support to client
companies. In certain situations, however, computer hardware and software may be
sold as part of the overall service solution.

         CeleXx completed  its first acquisition in May of 1999 of Pinneast,  a
six-year-old  Columbia,  South Carolina based  company.  Since then,  Pinneast's
revenues and contracts for future business have increased substantially.  We are
projecting revenues of approximately $3 million for the year 2000. The basis for
these  projections  is the current  backlog of services for which Pinneast holds
signed contracts.

         Meanwhile,  Pinneast  is steadily  making  inroads  into the  corporate
training  market.  In December 1999, for example,  Pinneast signed an open-ended
contract to host Dow Chemical's  worldwide  computer  based  training  programs.
Under the terms of the agreement, Dow can cancel the balance of the agreement at
any time if, in the  opinion of Dow,  Pinneast  is in breach of the terms of the
agreement and fails to live up to acceptable  standards of performance under the
agreement.   Nevertheless,   Pinneast   will  be  required   to   complete   all
work-in-progress,  without regard to the date of  cancellation of the open-ended
contract.  Furthermore,  under the agreement Dow must make a twenty-five percent
(25%) non-refundable cash deposit with Pinneast on all purchase orders issued by
Dow and accepted by Pinneast.  In addition,  Pinneast is  negotiating to jointly
produce books in text and video. If the pilot programs currently being conducted
are successful,  Pinneast will convert books and  educational  programs into CDs
and Internet deliverable format for the publisher.

         The acquisition of a second company,  Computer Marketplace,  Inc. (CMI)
was  completed  on  April  11,  2000.,  pursuant  to an  Agreement  and  Plan of
Reorganization for a value of $ 5,000,000. Payment consisted of 1,400,000 shares
of CeleXx common stock,  payment of $1,500,000 in cash and a promissory note for
$1  million  at 6%,  payable  in equal  installments  at the  first  and  second
anniversaries.  David Burke. Sr. and five (5) other key employees retained their
positions in CMI pursuant to 3 year employment contracts and received a total of
200,000 common shares of CeleXx . CMI, located in Tewksbury, Massachusetts, is a
sixteen-year-old  network solution and systems design company,  founded in 1983.
CMI  focuses on  providing  Fortune  1000  companies,  government  agencies  and
educational  institutions with networking  solutions,  systems integration,  and
computer telephony integration.

         CeleXx operates within the broad market of Information Technology (IT),
which has grown in tandem with the worldwide  proliferation  of  computerization
over  the  last  two  decades  and has  expanded  the  rate of  growth  with the
commercialization  of the Internet and  corporate  Intranets  over the last five
years. Several sources,  including  International Data Corporation (IDC), concur
that the number of online users will grow from about 150 million  worldwide  now
to about 500 million by 2003.  This  projected  growth is expected,  in turn, to
fuel the demand for new  computer  products  and  services and create new market
opportunities in this field. IDC is a leading provider of information technology
data,  industry  analysis  and  strategic  and  tactical  guidance to  builders,
providers  and  users of  information  technology.  IDC is based in  Framingham,
Massachusetts and maintains offices in more than 40 countries around the world.

         With the  acquisition of CMI, in addition to its core  competencies  in
networking and telephony, CeleXx will become involved in the delivery of systems
that use voice over IP technology.  Voice over IP is an emerging technology that
allows customers voice  transmission over the Internet at a fraction of the cost
of current  telephone  technologies.  At the present time,  approximately 50% of
CMI's revenues are derived from the general area of telephony,  that is, the use
of  computers  in  telephonic  communications.  At this  time,  we are unable to
forecast what impact, if any, the predicted growth in this market will have upon
CMI or the Company as a whole.

                                       4
<PAGE>

         Finally, through its ownership of Pinneast,  CeleXx is operating within
the general market of business-to-business e-commerce by building websites and e
commerce  platforms  for  clients  that  facilitate  the  transfer  of goods and
services over the Internet.  Electronic commerce (or e-commerce, as it is better
known)  is a  relatively  new  area  within  general  commerce.  This  area  has
proliferated  with the growing use of the  Internet and involves the transfer of
goods,  services,  and funds  from one  point to  another  using  the  Internet.
E-commerce  is  divided  into   business-to-business   and  business-to-consumer
segments.

         According  to IDC,  business-to-business  e-commerce  is one of fastest
growing sectors of e-commerce and is expected to exceed $179 billion by 2001. To
capitalize on this growth,  many  businesses  are expanding and upgrading  their
Internet and networking infrastructures.  The industry is highly competitive and
is characterized by numerous small companies, many offering proprietary products
and services.  Although  there are a few  significant  players,  such as IBM and
Cisco,  as yet,  no  clear  leader  has  emerged.  Currently,  Pinneast  holds a
negligible market share in this field, and currently has neither the capital nor
technical resources to capture meaningful market share.  Nevertheless,  revenues
from this source are growing.

MANAGEMENT AND STRATEGY

         The core management of CeleXx is composed of individuals experienced in
finance,  accounting,  and Information  Systems.  Members of our management team
have  been  employed  by or have  been  consultants  to  startup  companies  and
multinational corporations such as IBM, Mc Graw-Hill and Xerox for more than two
decades,  Our current  president and our Chief Financial  Officer have both been
involved in the financial and business aspects of mergers and  acquisitions,  as
well as with the investigation and business analysis of prospective acquisitions
at  Xerox  and  McGraw-Hill  and for  smaller  entrepreneurial  firms.  The core
strategy of the CeleXx management team is to acquire complementary businesses in
the information  technology  industry that add value by increasing market share,
revenues,  or profits,  or by reducing  operating  costs,  or by  enhancing  the
Company's ability to perform in the market place. We must caution, however, that
the achievement of these targets is highly dependent upon current  management as
well as upon the  Company's  ability to  attract  new  capital.  There can be no
assurance that the Company will be in a position to attract  sufficient  capital
or that such capital will be available to the Company on favorable and desirable
terms. If the Company is unsuccessful in its attempt to raise growth and working
capital at rates that are  acceptable  to the Company,  its prospects for growth
could be greatly diminished.

         To date, CeleXx has focused on service companies that provide customers
with  systems and  network  integration  and  computer  and web based  training.
Companies  in  systems   engineering,   systems  design,   e-commerce   platform
development,  and network consulting are the most desired potential  acquisition
candidates  for CeleXx. Through the  acquisition of CMI, CeleXx is also becoming
involved  in  developing  and  delivering  telecommunications  systems  such  as
telephone  routers,  networked e-mail systems,  and remote telephone  diagnostic
systems.  Telecommunications  is an area that the Company expects to become even
more involved with over the next several years.

        One important criterion for acquisition is the potential  synergy of the
business  to be  acquired  with  those  that  already  exist  within  the CeleXx
structure.  CMI and  Pinneast,  for  example,  share a number  of  their  larger
clients.  CMI  provides  hardware,  systems,  and  services  to several of these
clients while  Pinneast  provides  training to assure that users  understand and
take full advantage of the systems that CMI has provided. CeleXx generally looks
for  companies  that will add $5 million  to $15  million,  or more to  revenue;
and/or  companies  that have been  profitable on a pretax,  pre-interest  basis.
Acquisition  valuations  are often based on an EBIT  multiple of four (4) to six
(6). In addition,  the  companies  must have at least a three-year  history with
recently audited  financial  information and a strong  management  team.  CeleXx
requires top management to stay with the company after the  acquisition and ties
a portion  of the final  purchase  price to future  performance.  In any  event,
CeleXx  reserves  the  right to  negotiate  the  purchase  price and terms of an
acquisition,  and may,  from time to time,  elect to acquire a  business  with a
history  of  losses  if,  in the  opinion  of the  management  and the  board of
directors of the  Company,  such an  acquisition  might add value to the Company
and/or holdings under the CeleXx umbrella.

                                       5
<PAGE>

PINNEAST.COM, INC.

     Pinneast was formed in January 1994 in order to  capitalize  on the growing
demand for computer-based  alternatives to instructor lead training. The company
provides  its  customers,   mainly  Fortune  500  companies,   with   customized
interactive  (i.e., can be controlled by the user) multimedia  (i.e.,  combining
text, graphics and motion) training design and development services. Toward this
end, Pinneast  evaluates the specific practices and procedures a client might be
using, and then details a plan for developing training programs that address the
client's specific  requirements.  For the most part, these training programs are
designed  to  fill  specific  needs;  for  example,  to help  employees  improve
performance (productivity);  to help employees gain awareness of certain issues,
their causes,  and cures (e.g.,  sexual  harassment);  to help  employees  avoid
common  accidents or to comply with  certain  governmental  regulations  such as
OSHA; to teach new skills (e.g., how to operate a certain machine);  or to teach
general skills (e.g., computing).  Pinneast also develops and produces marketing
tools (e.g., promotional material, video demonstrations,  etc.) for customers to
distribute in the form of CD ROMS or via the Internet.

         Today, Pinneast's clients include a broad base of industrial companies,
banks, financial institutions, government agencies and educational institutions.
Prominent  among its clients are Dow Chemical,  for which Pinneast  produces and
hosts (maintains the site for) world-wide  Web-based training  programs;  The US
Army, for which Pinneast  develops a wide array of training  programs related to
the proper use and maintenance of weapons  systems;  Delta  Airlines,  for which
Pinneast  designs and produces safety training  programs;  and Nations Bank, for
which Pinneast develops financial training programs.  All of Pinneast's programs
are high in multimedia (text, video,  graphics and motion) content and delivered
to the end user via CD ROMs, the Internet (World Wide Web), or private corporate
intranets (Internet based links for a specific company or group).

         Pinneast  generated  about  $200,000 in revenue  during its first year,
primarily  from its first  customer,  Fleet  Mortgage,  and from a local grocery
chain, Harris Teeter Grocers. During the company's second year, it established a
two-year,  $800,000  contract  with Hoechst  Chemical to provide  OSHA  mandated
training  to its  employees.  Pinneast  also  continued  to  expand  within  the
financial  community by  generating  contracts  with several banks and insurance
companies.

         In  1996,  Pinneast  became  a  pioneer  in  web-based  training  as it
delivered an Internet accessed medical support program,  called Learners Toolkit
for Open Time,  for the  Thomas  Jefferson  University  Hospital.  By 1998,  the
Company had  expanded its revenue  base to more than  $800,000  and  established
contracts  with  companies  throughout a variety of  industries  and  government
organizations.  In 1999,  Pinneast  signed an  open-ended  contract  to host Dow
Chemical's worldwide computer based training programs.

         While Pinneast has been particularly successful with companies in a few
key industries such as finance, insurance, transportation and manufacturing, the
scope  of  its  services  can be  applied  to  most  businesses  and  government
organizations. Generally, however, its customers need to be large enough to have
ongoing training and training  support  programs for their  employees.  Pinneast
maintains a customer retention rate in excess of 80%.

                                       6
<PAGE>

     Pinneast  products  fall  into  two  categories:  training  and  marketing.
Training products include custom computer-based training (CBT) programs,  custom
web-based  training  (WBT)  programs,   instructional  design,   instructor-lead
training and consultation.  Pinneast's  marketing products include:  interactive
marketing  CD-ROMs,  corporate web page development,  e-commerce  systems,  site
development, and consultation.

     In developing  and producing  training  programs for its clients,  Pinneast
combines business performance  consulting,  instructional design, graphic design
and  animation,  computer  methodologies  and  media  technologies  to meet  the
specific  performance  improvement  (productivity)  needs  of its  clients.  The
solutions   and  training   programs  are  delivered  via  CD-ROM  or  the  Web.
Furthermore,  the Company  markets and  distributes  its  products  and services
through trade sources, customer referrals and direct marketing.

     Pinneast's instructional design philosophy and approach focus on
helping clients improve employee  performance through training.  The interactive
nature of the program  permits the user (learner) to stop,  start, or repeat any
portion of the program he or she may desire, at any time. Pinneast's approach to
interactive  multimedia design addresses  multiple learning styles in an attempt
to more  effectively  reach the diverse  audiences for which these  programs are
intended.  Secondly, our interactive multimedia programs engage the learner with
simulated  performance-based  routines,  enhanced by corrective feedback that is
directly applicable to the learner's real world performance responsibilities.

     The  instructional  material  is  designed to engage or link the learner to
interactive  multimedia so that real world knowledge,  skills and  methodologies
are  practiced  and  developed  and,  thus,  become  directly   transferable  to
on-the-job performance.  In addition to designing from the learner's performance
perspective and needs, Pinneast.com designs training programs within the context
of  the  client's   business   objectives  and  priorities  so  that  individual
performance improvements are relevant: they impact overall business performance.

     For the year 1999,  Pinneast.com  employed 16  full-time  employees  and 10
part-time employees.

COMPUTER MARKETPLACE, INC.

         The  acquisition of Computer  Marketplace,  Inc. (CMI) was completed on
April 11, 2000., pursuant to an Agreement and Plan of Reorganization for a value
of $ 5,000,000.  Payment  consisted of 1,400,000  shares of CeleXx common stock,
Payment  of  $1,500,000  in cash and a  promissory  note for $1  million  at 6%,
payable  in equal  installments  at the first and  second  anniversaries.  David
Burke. Sr. and 5 other key employees retained their positions in CMI pursuant to
3-year  employment  contracts  and received a total of 200,000  common shares of
CeleXx .

         CMI, located in Tewksbury, Massachusetts, is a sixteen-year-old network
solution and systems design  company,  founded in 1983. CMI focuses on providing
Fortune 1000 companies,  government  agencies and educational  institutions with
networking solutions,  systems integration,  and computer telephony integration.
CMI  has  a   broad   and   diversified   client   list   ranging   from   major
telecommunications  companies to public school systems throughout North America.
CMI's customers include: America On-Line, Lucent Technologies, AT&T, J.C. Penny,
Bell Canada,  The Prudential  Insurance  Companies,  the Boston Public  Schools,
Sprint Corp., IBM Global Services, USA Group, USA Bank, and Hewlett Packard Co.,
among many others.  CMI services  these  customers by designing,  installing and
implementing  local area network (LAN) and wide area network (WAN)  systems,  by
customizing  software on clients'  existing computer network allowing the client
the  transmission of telephone  conversation  via the internet for long distance
calls and computer related  maintenance  functions.  In 1998, CMI reported $16.7
million in revenues,  with pretax earnings of  approximately  $922,000.  For the
fiscal year ending, February 2000, CMI is forecasting revenues in excess of $ 16
million and pretax earnings of $1 million.

     CMI started in 1983 as a retail  operation  and rapidly  grew to five store
locations.  In 1990,  management  undertook  a major  restructuring  in order to
capitalize on the growing demand for software, systems and solutions rather than
just hardware.  CMI also recognized the opportunity to utilize this new focus to
expand  its  market   nationwide  and  establish  an   international   presence.
Consequently,  CMI shifted its focus from  individuals and small operations to a
purely  corporate  focus.  CMI achieved this shift in focus by  eliminating  the
retail side of the business. It did this by closing its retail stores and moving
all its  operations  into a single  location.  In  addition  CMI  developed  new
marketing  strategies focusing on system integration,  services and Fortune 1000
companies.  Within the last several  years,  CMI expanded its network  solutions
business and entered into the growing field of  telecommunications.  The company
is divided into two basic divisions: Networking and Telephony.

                                       7
<PAGE>

     CMI provides its  customers  with  complete,  ready-to-run  networks  using
Novell and Windows NT platforms. CMI assesses a customer's needs, determines the
appropriate  configuration,  purchases the  necessary  software and hardware and
then assembles and tests the components at the  customer's  site.  While certain
large installations can run as high as $1 million or more, the average order for
a network  solution  is about  $200,000.  CMI takes  care of all  aspects of the
installation,  from delivery and setup to completing the necessary licensing and
warranty  procedures.  CMI also  provides its customers  with systems  operation
training, vendor updates and upgrades, as well as a 24-hour Help Service.

     Over the last few years,  CMI has also  expanded  its services to include a
trademarked "Share-A-CNE" program, which provides customers with the benefits of
an on-call  Certified  Network Engineer who can work closely with the customers'
Information  Services  (IS)  department  but does not need to be  employed  on a
fulltime basis. The Share-A-CNE  program is a  cost-effective  way for the small
customer  to receive  the  technical  benefits  that their  larger  counterparts
receive.

     CMI is also engaged in helping its customers capitalize on the capabilities
of the Internet.  More  specifically,  CMI is helping customers  implement voice
over IP  (Internet  Protocol)  technology,  which is a low cost  alternative  to
standard  telephone  service.  The  company  does this  through  the  design and
implementation  of customized  software on a client's existing computer network,
or a  newly  implemented  network,  allowing  the  client  the  transmission  of
telephone  conversation  via the  Internet  for  long  distance  calls.  Network
contracts represent approximately 50% of the company's revenues.

     CMI  provides  its   customers   with  systems  and   solutions  for  their
telecommunications  needs.  The telephony  division was formed about three years
ago to help  some of its major  telecommunications  systems  providers,  such as
AT&T,  Cisco,  Lucent,  Qwest and Sprint,  in  assisting  their  clients to more
effectively  manage  their  call  routing  systems.  The  company  brings in the
relevant equipment,  prepares all the networking  functions in terms of software
and  hardware,  installs the necessary  telephony  software,  conducts  in-depth
testing of the systems,  and finally ships a ready to use system to the end-user
site. End customers include airlines,  banks,  insurance  companies,  investment
firms and  customer  oriented  organizations  across the US and  Canada.  Orders
average about $400,000 and are usually  fulfilled within 4 weeks.  Occasionally,
orders are received from Europe and the typical user is a Fortune 500 company.

     On April 7, 2000,  the Company  completed a financing  agreement with Birch
Circle LLC ("Birch"),  a private  investment  banking firm, based in Connecticut
and  raised  $3,500,000  for the  Company  through  the  sale of  shares  of the
Company's   Series  A  Convertible   Preferred   Stock   ("Preferred   Shares").
Approximately  $1.6  million  of the  net  proceeds  (including  accounting  and
attorney's fees) had been earmarked for the acquisition of CMI.

     The Preferred  Shares will pay  dividends at the rate of 6% per annum,  and
the dividend may be paid in cash or common shares of the Company,  at the option
of the Company.  If the Company elects to pay dividends on the Preferred  Shares
in common  shares,  the number of common  shares shall be determined by dividing
the cash amount of the dividend by the conversion price of the Preferred Shares.
The conversion  price means the lower of: (a), the average  closing bid price on
the day immediately preceding the closing of the transaction or (b), 80 % of the
5-day trading  average  closing bid price of the common shares prior the date of
conversion.

     Within 45 days of the  closing,  the  Company  will be  required  to file a
registration  statement with the Securities & Exchange Commission (SEC) covering
the resale of the common shares upon conversion,  to permit their resale without
restriction.

                                       8
<PAGE>

         The Company will have the right, in its sole discretion,  to redeem, in
cash, in whole or in part, the number of shares  submitted for  conversion.  The
redemption  price  shall be 125% of the  average  closing  bid price for the day
immediately  preceding the date of redemption multiplied by the number of shares
of common stock  issued upon  conversion.  In addition,  the Company may, in its
sole discretion, redeem in cash, and in whole or in part, all unconverted shares
at the rate of 125% of the  principal  amount.  However,  the Company  must give
investors 30 days notice prior to such redemption.

Risk Factors

         IN ADDITION TO OTHER  INFORMATION  IN THIS FORM 10-KSB,  THE  FOLLOWING
RISK FACTORS  SHOULD BE CAREFULLY  CONSIDERED IN EVALUATING  THE COMPANY AND ITS
BUSINESS BECAUSE SUCH FACTORS CURRENTLY HAVE A SIGNIFICANT  IMPACT OR MAY HAVE A
SIGNIFICANT  IMPACT ON THE COMPANY'S  BUSINESS,  OPERATING  RESULTS OR FINANCIAL
CONDITION.  ACTUAL RESULTS COULD DIFFER  MATERIALLY  FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS CONTAINED IN THIS FORM 10-KSB AS A RESULT OF THE RISK
FACTORS DISCUSSED BELOW AND ELSEWHERE IN THIS FORM 10-KSB.

Uncertainty of Future Profitability; Need for Additional Funds

         The Company's recent operations during the year ended December 31, 1999
and  from  July 10,  1998  (inception)  to  December  31,  1998,  have  consumed
substantial  amounts of cash and have  generated net losses of $ 1,906,397 and $
316,121,  respectively, and accumulated a deficit of $ 2,222,518 at December 31,
1999. The Company believes that it will require additional cash infusions from a
private  placement or other equity  financing  to meet the  Company's  projected
working capital, projected acquisitions and other cash requirements in 2000.

         The  sale  or  issuance  of  additional   equity  or  convertible  debt
securities  could result in additional  dilution to the Company's  stockholders.
There can be no  assurance  that  additional  financing,  if  required,  will be
available  when  needed or, if  available,  will be on terms  acceptable  to the
Company.  Any  inability to satisfy the  Company's  operating  cash needs or the
inability  to finance the purchase of goods sold to others could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operation.

Potential Fluctuations in Operating Results

         Since the Company  recognizes IT services  revenue only when  personnel
are engaged on client  projects,  the  relative  utilization  of such  personnel
directly affects the Company's operating results. In addition, a majority of the
Company's IT operating expenses,  particularly  personnel and related costs, are
substantially fixed in advance of any particular period. As a result, variations
in  utilization  of personnel  may  materially  affect the  Company's  operating
results.  Termination  or completion of engagements in the Company's IT services
business or failure to obtain additional engagements in its IT services business
could  have a  material  adverse  effect on the  Company's  business,  financial
condition and results of operations.

         The Company believes that future operating results will also be subject
to  fluctuations  due to a variety  of  factors,  many of which are  beyond  the
Company's control.  Such factors may include, but are not limited to, demand for
the  Company's  technology  or  services,  availability  of  skilled  sales  and
technical personnel,  introduction or enhancement of technologies or services by
the Company or its competitors,  market  acceptance of new technology or service
offerings,  technological  changes,  increased  competition,  litigation  costs,
results of litigation, and general economic conditions.

                                       9
<PAGE>






Management of Acquired Businesses

         The Company's acquisitions have placed, and are expected to continue to
place,  a significant  strain on its managerial and  operational  resources.  To
manage these acquired  businesses and others that may be acquired in the future,
the Company must continue to implement and improve its  operational,  management
and  financial  systems and to train and manage its employee  base.  The Company
expects  that its  operational,  management  and  financial  systems  will  face
additional strains as a result of possible acquisitions in the future.

Integration of Acquisitions

         As part of its  business  strategy,  the Company may seek out  business
combinations  with  other  Internet  or IT  Services  companies.  Such  business
combinations  involve  a  number  of  risks,   including,   without  limitation,
difficulty assimilating the operations and personnel,  expenditure of management
time, expenses associated with the transactions,  additional expenses associated
with  amortization  of  acquired   intangible  assets,  the  implementation  and
maintenance of standards,  controls, procedures, and policies, the impairment of
relationships with employees and customers as a result of the integration of new
management personnel, and potential unknown liabilities associated with acquired
businesses.  To the extent that any of the companies  that the Company  acquires
fail,  the Company could be required to write-off the amount of the  investment.
There can be no assurance  that the Company  will be  successful  in  addressing
these risks or any other problems  encountered in connection  with such business
combinations.

Dependence on Key Personnel

         The Company's performance is substantially dependent on the performance
of its senior management and key sales and technical  personnel.  In particular,
the Company's  success  depends  substantially  on the continued  efforts of its
senior  management team. The Company does not carry key person life insurance on
any of its senior management  personnel.  The loss of the services of any of its
executive  officers or other key employees could have a material  adverse effect
on the business,  financial  condition and results of operations of the Company.
The Company's  future success also depends on its continuing  ability to attract
and  retain   highly-qualified   sales,   technical  and  managerial  personnel.
Competition for such personnel is intense and there can be no assurance that the
Company will be able to retain its key managerial, sales and technical employees
or that it will be able to attract and retain additional highly-qualified sales,
technical and managerial  personnel in the future.  The inability to attract and
retain the necessary  sales,  technical and  managerial  personnel  could have a
material adverse effect upon the Company's business,  financial  condition,  and
results of operation.

Concentration of Stock Ownership

         As of March  31,  2000,  the  present  directors,  executive  officers,
greater than 5% stockholders, and their respective affiliates beneficially owned
approximately  22.65% of the  outstanding  common stock of the Company  ("Common
Stock").  As of March 31, 2000, Doug H. Forde,  the Company's  Chairman and CEO,
and  Lionel  Forde,  Director  and Vice  President,  together  beneficially  own
approximately 11% of the outstanding Common Stock of the Company. As a result of
their   ownership,   the  directors,   executive   officers,   greater  than  5%
stockholders,  and their respective affiliates  collectively are able to control
all matters requiring stockholder approval,  including the election of directors
and  approval of  significant  corporate  transactions.  Such  concentration  of
ownership may also have the effect of delaying or preventing a change in control
of the Company.

Volatility of Stock Price

         The  trading  price  of the  Company's  Common  Stock  has been and may
continue  to be subject to wide  fluctuations  in response to a number of events
and factors,  such as quarterly  variations  in  operating  results,  changes in
financial  estimates and recommendations by securities  analysts,  the operating
and  stock  price  performance  of  other  companies  that  investors  may  deem
comparable to the Company,  and news reports relating to trends in the Company's
markets. In addition, the stock market, in general, and the market prices for IT
companies,  in  particular,  have  experienced  volatility  that  often has been
unrelated to the operating performance of such companies. These broad market and
industry  fluctuations  may adversely  affect the trading price of the Company's
Common Stock, regardless of the Company's operating performance.

                                       10
<PAGE>


Risks Relating to Small Company Stocks

         The  Company's  Common  Stock trades on the  Over-The-Counter  Bulletin
Board under the symbol  "CLXX".  The  Securities  and  Exchange  Commission  has
adopted regulations which generally define a penny stock to be any security that
has a market price (as defined) of less than $5.00 per share, subject to certain
exceptions  including  listing on the NASDAQ SmallCap Market.  The shares of our
common  stock may be deemed to be penny  stocks and thus will become  subject to
rules that impose additional sales practice  requirements on brokers/dealers who
sell such securities to persons other than established  customers and accredited
investors.  Consequently,  the "penny  stock"  rules may restrict the ability of
broker/dealers to sell the common stock and may affect the ability of purchasers
to sell the common stock in a secondary market.

Item 2. Description of Property

         The Company currently leases  approximately 3,000 square feet of office
space  located at 7251 West  Palmetto  Park  Road,  Boca  Raton,  Florida as its
corporate  headquarters.  Early in the year 2000,  the Company plans to relocate
from  its  current  Boca  Raton  location  to its  new  corporate  headquarters,
consisting of approximately  5,000 square feet, in Coral Springs,  Florida.  The
terms  and  conditions  of our  lease  include  our  move to the  new  location.
Presently, the monthly rent is $5,900 and the lease terminates in 2004.

       Pinneast leases building space at 1221 Sunset Blvd., West Colombia, South
Carolina  under a three 3 year  lease  that  requires  minimum  annual  payments
totaling $24,672.

Item 3. Legal Proceedings

         The Company was not at party to any legal proceeding at March 31, 2000.

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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of fiscal year 1999.

                                       11
<PAGE>

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters

         SINCE   NOVEMBER   4,  1999  our   Common   Stock  has  traded  on  the
Over-The-Counter  Bulletin  Board under the symbol  "CLXX",  and  commenced  its
trading on October 16,  1998.  prior to November 4, 1999 our common stock traded
under the symbol "CBRA".  The following  table sets forth,  for the period since
October  1998,  the high and low bid  quotations  for our  Common  Stock for the
periods  indicated  as  reported  by the  OTC  Bulletin  Board.  The  quotations
represent prices between dealers and do not include retail mark-up, mark-down or
commissions or necessarily represent actual transactions.

                           PERIOD                    HIGH                    LOW
         October 16, 1998 - December 31, 1998        $.625                 $0.06
         January 1, 1999 - March 31, 1999            $6.00                 $.875
         April 1, 1999 - June 30, 1999               $1.53                 $.875
         July 1, 1999 - September 30, 1999           $1.15                 $0.63
         October 1, 1999-December 31, 1999           $0.83                 $0.45
         January 1, 2000- March 31, 2000             $4.13                 $0.56



         The transfer agent for the Company's Common Stock is American Registrar
& Transfer Company, 342 East 900 South Street, Salt Lake City, Utah 84111.

         We have never paid cash  dividends  on our Common  Stock.  We presently
intend to retain  future  earnings,  if any,  to finance  the  expansion  of our
business  and do not  anticipate  that  any cash  dividends  will be paid in the
foreseeable  future.  The future  dividend  policy will depend on our  earnings,
capital  requirements,  expansion plans,  financial condition and other relevant
factors.

         The  approximate  number of record  holders of the  Common  Stock as of
March 31, 2000, were 249. The Company  estimates that there are  approximately 7
beneficial holders of its Common Stock.

Item 6. Management's Discussion and Analysis or Plan of Operations

         The  following  is   Management's   discussion   and  analysis  of  the
consolidated  financial  condition and results of operations of the Company.  It
should be read in conjunction with the audited consolidated financial statements
and related  notes  included  elsewhere in this Form  10-KSB.  When used in this
discussion,  the  words  "estimate,"  "project,"  and  similar  expressions  are
intended to identify forward-looking  statements. Such statements are subject to
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those projected,  including, but not limited to, those discussed
in "Item 1 - Description  of Business - Risk Factors" and elsewhere in this Form
10-KSB and from time to time in the  Company's  periodic  reports.  Readers  are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date  hereof.  The  Company  undertakes  no  obligation  to
publicly release the result of any revisions to those forward-looking statements
which may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

                                       12
<PAGE>

Overview

     CeleXx Corporation is positioning itself as an acquirer and consolidator of
Information  Technology  (IT)businesses.  In general,  these businesses  provide
services such as engineering  design and layout for the  installation of network
systems, Web site development,  computer hardware and software integration,  and
training  and  ongoing  technical  support  to  client  companies.   In  certain
situations,  however,  computer hardware and software may be sold as part of the
overall service solution.

     The Company's recent operations have consumed  substantial  amounts of cash
and have generated net losses and an accumulated  deficit.  The Company believes
that it will require a cash  infusion  from a private  placement or other equity
financing to meet its  projected  working  capital and other cash  requirements.
Absent such  additional  cash infusion from a private  placement or other equity
financing,  the Company's  continued existence is in substantial doubt. The sale
of additional equity or other securities could result in additional  dilution to
the  Company's  stockholders.  There can be no  assurance  that such  additional
financing can be obtained on acceptable terms, if at all.

Results of Operations

Comparison of Fiscal Year 1999 to Fiscal Year 1998

     The Company's total revenue increased $ 680,989,  or 100%, from $ 0 in 1998
to 1999 as a result of its first acquisition of Pinneast in May 1999.

     Gross profit  increased to 48% in 1999 from 0% in 1998.  This increase is a
result of an  increase in the  percentage  of IT revenue  derived  from its sole
operating unit.

     Selling,   general,  and  administrative  ("SG&A")  expenses  increased  by
$1,758,171  or 556% to $ 2,074,292 in 1999 from $ 316,121  million in 1998. As a
percentage  of sales,  SG&A  expenses  were 304% of total sales in 1999 compared
with no sales  in 1998.  The  increase  in SG&A  expenses  is  primarily  due to
increases in salaries,  professional  expenses  and non-cash  transaction  costs
associated with on-going acquisitions and capital raising efforts, along with an
increase in consulting and travel expenses.

     Depreciation and amortization  expenses for 1999 was $125,920.  The Company
had no depreciation  and  amortization  expenses in 1998. The  depreciation  and
amortization expenses is primarily due to the acquisition of Pinneast.com, Inc.

     In 1999, the Company recorded no income tax expenses. At December 31, 1999,
the  Company  has a  federal  and  state  net  operating  loss  carryforward  of
$2,223,000.

Future Assessment of Recoverability and Impairment of Goodwill

     In connection with its various acquisitions,  the Company recorded goodwill
and other intangibles,  that are being amortized on a straight-line basis over a
periods  of 7 to 10  years,  its  estimated  period  that  the  Company  will be
benefited by such  intangible  assets.  At December 31,  1999,  the  unamortized
goodwill and other intangibles  combined was $ 1,114,579 (which  represented 75%
of total  assets and 148% of  stockholders'  equity).  Goodwill  arises  when an
acquirer  pays  more for a  business  than the fair  value of the  tangible  and
separately  measurable  intangible net assets. For financial reporting purposes,
goodwill and all other intangible assets are amortized over the estimated period
benefited.  The Company has determined  the life for  amortizing  goodwill based
upon several  factors,  the most  significant  of which are the  relative  size,
historical  financial  viability and growth trends of the acquired companies and
the relative lengths of time such companies have been in existence.

                                       13
<PAGE>

         Management of the Company  periodically  reviews the Company's carrying
value and recoverability of unamortized  goodwill and other intangibles.  If the
facts and  circumstances  suggest that the goodwill and other intangibles may be
impaired,  the carrying  value of such assets will be adjusted which will result
in an immediate charge against income during the period of the adjustment and/or
the length of the remaining  amortization  period may be  shortened,  which will
result  in an  increase  in the  amount of  amortization  during  the  period of
adjustment  and each period  thereafter  until fully  amortized.  Once adjusted,
there  can be no  assurance  that  there  will not be  further  adjustments  for
impairment and  recoverability  in future periods.  Of the various factors to be
considered  by  management of the Company in  determining  whether  goodwill and
other  intangibles  is impaired,  the most  significant  will be (i) losses from
operations,  (ii) loss of customers and (iii) industry  developments,  including
the Company's  ability to maintain its market share,  development of competitive
products or services and imposition of additional regulatory requirements.

Liquidity and Capital Resources

         In the fiscal year ended December 31, 1999,  the Company  satisfied its
cash  requirements  primarily  from  private  equity  issuance's  and loans from
certain  officers  and  shareholders.  At  December  31,  1999,  the Company had
$137,682 in cash.

         During the fiscal year ended  December 31, 1999,  net cash  provided by
investing and financing activities of $1,191,110 exceeded cash used in operating
activities of $1,053,428, resulting in a $137,682 increase in cash.

         The Company's operating entity, Pinneast.com, has three working capital
credit lines with a U.S. bank totaling  approximately  $300,000. The three lines
are secured by substantially all of the Company's assets and mature in the years
2000 and 2003.  The Company is currently  evaluating  the  replacement  of these
lines with alternative asset financing.

         On April 7, 2000,  the Company  completed a  financing  agreement  with
Birch  Circle  LLC  ("Birch"),  a  private  investment  banking  firm,  based in
Connecticut and raised  $3,500,000 for the Company through the sale of shares of
the  Company's  Series  A  Convertible  Preferred  Stock  ("Preferred  Shares").
Approximately  $1.6  million  of the  net  proceeds  (including  accounting  and
attorneys fees) had been earmarked for the acquisition of CMI.

         The  Preferred  Shares will pay  dividends at the rate of 6% per annum,
and the  dividend may be paid in cash or common  shares of the  Company,  at the
option of the Company.  If the Company  elects to pay dividends on the Preferred
Shares in common  shares,  the number of common  shares shall be  determined  by
dividing  the  cash  amount  of the  dividend  by the  conversion  price  of the
Preferred  Shares.  The  conversion  price means the lower of: (a),  the average
closing  bid  price  on  the  day  immediately  preceding  the  closing  of  the
transaction or (b), 80 % of the 5-day trading  average  closing bid price of the
common shares prior the date of conversion.

Factors Affecting Operating Results

         The Company's  recent  operations  during the years ended  December 31,
1999 and 1998 have consumed  substantial  amounts of cash and have generated net
losses of $1,906,397 and $ 316,121,  respectively,  and accumulated a deficit of
$2,222,518  at December  31,  1999.  The Company  believes  that it will require
additional cash infusions from a private  placement or other equity financing to
meet the Company's  projected  working  capital and other cash  requirements  in
2000.

         Since the Company  recognizes IT services  revenue only when  personnel
are engaged on client  projects,  the  relative  utilization  of such  personnel
directly affects the Company's  operating results.  Variations in utilization of
personnel may materially affect the Company's IT services business or failure to
obtain additional  engagements in its IT services business could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

                                       14
<PAGE>

         The Company's acquisitions have placed, and are expected to continue to
place,  a significant  strain on its managerial and  operational  resources.  To
manage these acquired  businesses and others that may be acquired in the future,
the Company must continue to implement and improve its  operational,  management
and financial  systems and to train and manage its employee base. As part of its
business  strategy,  the Company may seek out additional  business  combinations
with other  Internet  or IT  Services  companies.  To the extent that any of the
companies that the Company acquires fail, the Company could be required to write
off the amount of the investment.

Year 2000 Compliance

         The Year 2000 Issue is the result of computer  programs  being  written
using two  digits  rather  than  four to  define  the  applicable  year.  Absent
corrective  actions,  programs  with date  sensitive  logic may recognize a date
using "00" as the year 1900  rather than the year 2000.  This could  result in a
system failure or miscalculations causing disruptions of operations,  including,
among  other  things,  a  temporary  inability  to  process  transactions,  send
invoices, or engage in similar normal business activities.

         The total cost  associated with required  modifications  to become Year
2000  compliant  has not been material to our  financial  position to date.  Our
internal operations and business are also dependent upon the computer-controlled
systems  of third  parties  such as our  suppliers,  clients  and other  service
providers.  While problems may arise in the future and we cannot assure you that
we will not have a Year 2000 problem,  we are unaware of any material  impact on
our  business  caused by a Year 2000  problem  either in our systems or those of
third-parties.   The  above   description   of  the  Year  2000  issue  contains
forward-looking statements including, without limitation, statements relating to
our expectations  that are made pursuant to the "safe harbor"  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  Readers are cautioned that
forward-looking  statements  contained  in the Year 2000 Issue should be read in
conjunction  with the  Company's  disclosures  under  the  heading:  "CAUTIONARY
STATEMENT  FOR THE  PURPOSES  OF THE 'SAFE  HARBOR'  PROVISIONS  OF THE  PRIVATE
SECURITIES  LITIGATION  REFORM ACT OF 1995" as stated in the  forefront  of this
filing.


                                       15
<PAGE>

Item  7.  Financial Statements






                          INDEX TO FINANCIAL STATEMENTS

  INDEX TO FINANCIAL STATEMENTS

  CELEXX CORPORATION

  Independent Auditors' Report                                               F-2

  Consolidated Balance Sheet                                                 F-3

  Consolidated Statements of Operations                                      F-4

  Consolidated Statements of Stockholders' Equity (Deficit)                  F-5

  Consolidated Statements of Cash Flows                                      F-6

  Notes to Consolidateds Financial Statements                         F-7 - F-14

                                       F-1




<PAGE>




                          INDEPENDENT AUDITORS' REPORT

  INDEPENDENT AUDITORS' REPORT

To the Board of Directors
CeleXx Corporation and Subsidiary
Boca Raton, Florida

We  have  audited  the  accompanying   consolidated   balance  sheet  of  CeleXx
Corporation  and   Subsidiary,   as  of  December  31,  1999,  and  the  related
consolidated  statements of operations,  stockholders' equity (deficit) and cash
flows for the year ended  December  31, 1999 and the period  ended July 10, 1998
(inception)  through  December  31, 1998.  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 audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 amount 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 audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of CeleXx Corporation
and Subsidiary,  as of December 31, 1999, and the consolidated  results of their
operations  and their  cash flows for the year ended  December  31,1999  and the
period ended July 10, 1998 (inception)  through December 31, 1998, in conformity
with generally accepted accounting principles.

                                           /s/Feldman Sherb Horowitz & Co., P.C.
                                              Feldman Sherb Horowitz & Co., P.C.
                                              Certified Public Accountants

New York, New York
April 14, 2000

                                       F-2
<PAGE>
                        CELEXX CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 1999





                                     ASSETS


CURRENT ASSETS:

     Cash                                                $              137,682
     Accounts receivable                                                 76,923
     Advances to employees                                               18,245
                                                                     -----------
        TOTAL CURRENT ASSETS                                            232,850
                                                                     -----------
FURNITURE AND EQUIPMENT, net                                             39,575

GOODWILL, net                                                            94,167

INTANGIBLE ASSETS, net                                                1,020,412


OTHER ASSETS                                                             93,250
                                                                      ----------
                                                          $           1,480,254
                                                                      ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY




CURRENT LIABILITIES
     Accounts payable and accrued expenses               $              270,000
     Note payable related party                                         100,000
     Line of credit  short term portion                                 178,247
     Advances from shareholder                                            9,013
     DEFERRED REVENUE                                                    87,384
                                                                     -----------
        TOTAL CURRENT LIABILITIES                                       644,644
                                                                     -----------

LINE OF CREDIT  long term portion                                        80,295

COMMITMENTS                                                                   -

STOCKHOLDERS' EQUITY:
     Preferred stock, $001 par value,
        1,000,000 share authorized; none issued                               -

     Common stock, $.001 par value,
        20,000,000 shares authorized;
        10,907,058 shares issued and outstanding                         10,907
     Additional paidin capital                                        3,216,926
     Deferred financing costs                                          (250,000)
     Accumulated deficit                                             (2,222,518)
                                                                     -----------
        TOTAL STOCKHOLDERS' EQUITY                                      755,315
                                                                     -----------


                                                          $           1,480,254
                                                                      ==========





                 See notes to consolidated financial statements.



                                       F3
<PAGE>

                        CELEXX CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>

<CAPTION>

                                                                                   July 10, 1998

                                                                 Year Ended         (Inception) to
                                                             December 31, 1999    December 31, 1998

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

REVENUE                                                      $        680,989     $              -
COST OF REVENUE                                                       353,140                    -
                                                             ------------------   -----------------
GROSS PROFIT                                                          327,849                    -

OPERATING EXPENSES                                                  2,074,292              316,121
                                                             ------------------   -----------------
LOSS FROM OPERATIONS                                               (1,746,443)            (316,121)
OTHER EXPENSES:
    Interest expense                                                   68,754                    -
    Settlement of litigation                                           91,200                    -
                                                             ------------------   -----------------
TOTAL OTHER EXPENSES                                                  159,954                    -
                                                             ------------------   -----------------
NET LOSS                                                     $     (1,906,397)   $        (316,121)
                                                            ==================   ==================
                                                            ==================   ==================
NET LOSS PER COMMON SHARE - basic and diluted            $              (0.21)$              (0.07)
                                                            ==================   ==================
WEIGHTED AVERAGE COMMON SHARES

    OUTSTANDING - basic and diluted                                 8,361,171            4,500,000
                                                            ==================   ==================


</TABLE>







                 See notes to consolidated financial statements.

                                       F-4
<PAGE>

                        CELEXX CORPORATION AND SUBSIDIARY

            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>


                                                    Common Stock
                                                                        Additional                                      Total
                                               Number of                 Paid-in        Deferred      Accumulated    Stockholders'
                                                Shares       Amount      Capital    Financing Costs    Deficit      Equity (Deficit)
                                              ---------    ---------    ---------   --------------     ----------   ----------------
<S>                                          <C>          <C>          <C>                     <C>             <C>            <C>

Balance, July 10, 1998 (Inception)            4,500,000    $  4,500     $  (4,500)             -     $        -     $        -

Capital contribution                                  -           -       216,121              -              -        216,121

NET LOSS                                              -           -             -              -        (316,121)     (316,121)
                                             ---------    ---------    ---------   --------------     ----------   ----------------

Balance, December 31, 1998                    4,500,000       4,500       211,621              -        (316,121)     (100,000)

Shares issued in conjunction with merger        200,000         200          (200)             -              -              -

Issuance of common stock for exchange           713,475         713      (160,342)             -              -       (159,629)

Acquisition of subsidiary                       500,000         500       749,250              -              -        749,750

Retirement of related party debt              1,733,333       1,734       446,907              -              -        448,641

Shares issued for consulting services           500,000         500       124,500              -              -        125,000

Sale of common stock                            860,250         860       859,390              -              -        860,250

Issuance of stock for cash and services         300,000         300       299,700              -              -        300,000

Shares issued for deferred financing services   400,000         400       249,600       (250,000)             -              -

Shares issued to retire debt                    400,000         400       183,600              -              -        184,000

Shares issued in legal settlement               150,000         150        91,050              -              -         91,200

Shares issued for services                      650,000         650       161,850              -              -        162,500

NET LOSS                                              -           -             -              -      (1,906,397)   (1,906,397)

                                             ------------   ---------  ------------  ---------------  ------------- ----------------
Balance, December 31, 1999                   10,907,058    $ 10,907    $3,216,926     $   (250,000)  $(2,222,518)    $  755,315
                                            =============   =========  ============  ===============  =============  =============







                See notes to consolidated financial statements.

                                       F-5
</TABLE>


<PAGE>

                        CELEXX CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                        July 10, 1998
                                                                     Year Ended         (Inception) to
                                                                  December 31, 1999     December 31, 1998
                                                                  -----------------     ------------------
<S>                                                            <C>                       <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

    Net loss                                                    $        (1,906,397)$     $    (316,121)
    Adjustments to reconcile net loss to net cash                 -----------------     ------------------
      used in operations:

         Amortization and depreciation                                      125,920                   -
         Common stock issued for interest                                    49,000                   -
         Common stock issued in legal settlement                             91,200                   -
         Common stock issued for services                                   557,500                   -
    Changes in assets and liabilities,
         net of effects from acquisition:

      Accounts receivable                                                   118,531                   -
      Other assets                                                          (42,850)                  -
      Accounts payable and accrued expenses                                (133,716)                  -
      Deferred revenue                                                       87,384
                                                                  -----------------     ------------------
                                                                            852,969                   -
                                                                  -----------------     ------------------

NET CASH USED IN OPERATING ACTIVITIES                                    (1,053,428)           (316,121)
                                                                  -----------------     ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Cash acquired in acquisition                                              8,251                   -
    Acquisition of software marketing rights                               (112,554)                  -
    Deferred acquisition costs                                              (50,000)                  -
    Capital expenditures                                                    (34,148)                  -
NET CASH USED IN INVESTING ACTIVITIES                                      (188,451)                  -
                                                                  -----------------     ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Sale of common stock                                                    890,250                   -
    Capital contributions                                                         -             216,121
    Increase in line of credit                                               14,902                   -
    Borrowings from related parties                                         492,654                   -
    Increase (decrease) in due to related parties                           (18,245)            100,000
NET CASH PROVIDED BY FINANCING ACTIVITIES                                 1,379,561             316,121
                                                                  -----------------     ------------------
NET INCREASE IN CASH                                                        137,682                   -

CASH - beginning of period                                                        -                   -



                                                                  ------------------     ------------------
CASH - end of period                                            $           137,682 $                 -
                                                                  ==================    ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                                                                   =================   =================
    Cash paid during the year for interest                      $            19,754 $                 -
                                                                   =================   =================
    Noncash investing and financing activities:
      Note payable issued in acquisition                        $           100,000 $                 -
                                                                  ==================   =================
      Common stock issued for acquisition                       $           500,000 $                 -
                                                                  ==================   =================
      Conversion of related party debt to common stock          $           583,640 $                 -
                                                                  ==================   =================
      Fair value of assets acquired (accounts receivable,
         property and equipment and customer lists)             $           248,381 $                 -
                                                                  ==================   =================
      Liabilities assumed in acquisition (accounts payable,
         and line of credit)                                    $           487,727 $                 -
                                                                  ==================   =================



                 See notes to consolidated financial statements.

                                       F-6
</TABLE>

<PAGE>



                        CELEXX CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    FOR THE YEAR ENDED DECEMBER 31, 1999 AND
               JULY 10, 1998 (INCEPTION) THROUGH DECEMBER 31, 1998

1.        ORGANIZATION:

          Cobra Technologies International,  Inc. ("International"),  a Delaware
          corporation,  was formed on July 10, 1998 to acquire select businesses
          that   produce,   service,   maintain  or  support   the   information
          technologies industry.

          On February 18, 1999, International was acquired by Spectrum Ventures,
          Inc.  ("Spectrum"),  a Nevada  corporation,  for  4,500,000  shares of
          Spectrum stock (the "Exchange").  The Exchange was completed  pursuant
          to the Agreement of Merger  between  International  and Spectrum.  The
          Exchange has been  accounted  for as a reverse  acquisition  under the
          purchase   method  for   business   combinations.   Accordingly,   the
          combination of the two companies is recorded as a recapitalization  of
          International,  pursuant  to which  International  is  treated  as the
          continuing  entity.  Subsequent to the Exchange,  with the approval of
          the  Board  of   Directors,   Spectrum   changed  its  name  to  Cobra
          Technologies, Inc. On August 3, 1999, Cobra Technologies, Inc. changed
          its name to CobraTec,  Inc. On November 4, 1999 CobraTec, Inc. changed
          its name to CeleXx Corporation ("CeleXx" or the "Company").

          On February 18, 1999, prior to the merger with Spectrum,  the Board of
          Directors  of  Spectrum  declared a 1:24  reverse  stock  split  which
          resulted in 713,475  shares  outstanding.  All periods  presented have
          been  retroactively  restated  to give  effect to this  reverse  stock
          split.

          Additionally,  on February 18, 1999 the Company  issued 200,000 shares
          of its common stock as part of the merger  agreement  with Spectrum in
          order to  receive  a release  from an  acquisition  agreement  between
          Spectrum and Commercial Computer Systems,  Inc. These shares have been
          treated as a cost of the merger with Spectrum.

          The Company  completed  an offering of its common  stock in April 1999
          pursuant to the  Securities  Act of 1933 and Rule 504 of Regulation D.
          The  Company  offered  shares of  common  stock at $1.00 per share and
          received gross proceeds from this offering of $860,250.

          On May 25, 1999,  CeleXx acquired through its wholly owned subsidiary,
          Pinneast.com, Inc ("Pinneast"), all the outstanding shares of Pinnacle
          East, Inc., a South Carolina  Corporation,  engaged in the development
          of  multimedia  educational  programs  for  industry  and  government.
          Pinnacle East, Inc. was acquired for 500,000 shares of CeleXx's common
          stock and a $100,000  note payable due in May 2000.  Subsequent to the
          acquisition  Pinnacle  East,  Inc.  was  merged  into  Pinneast,   the
          surviving corporation.

          In June 1999,  CeleXx  entered into an  agreement to acquire  Computer
          Marketplace,  Inc.('CMI'),  a Massachusetts company engaged in systems
          engineering,  design and maintenance of computer network systems.  The
          acquisition   of  CMI  was  completed  on  April  11,  2000,   and  as
          consideration the Company issued 1,400,000 shares of common stock, a

                                       F-7


<PAGE>



         note  payable for  $1,000,000  bearing  interest at 6% due in two equal
         annual  installments  on the  anniversary  of the closing date and paid
         $1,500,000  in cash out of the proceeds  from the issuance of preferred
         stock (see Note 15).

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.       PRINCIPLES  OF  CONSOLIDATION  -  The  consolidated  financial
                  statements  include  the  accounts  of  the  Company  and  its
                  subsidiary.  The  accounts  of  Pinneast.com,  Inc.  have been
                  included  from the date of  acquisition  May 25, 1999  through
                  December 31, 1999. All material intercompany transactions have
                  been eliminated.

         B.       ESTIMATES  -  The  preparation  of  financial   statements  in
                  conformity  with  generally  accepted  accounting   principles
                  requires  management to make  estimates and  assumptions  that
                  affect the  reported  amounts of assets  and  liabilities  and
                  disclosure of contingent assets and liabilities at the date of
                  the financial  statements and the reported  amounts of revenue
                  and expenses during the reporting period. Actual results could
                  differ from those estimates.

         C.       CASH AND CASH  EQUIVALENTS - The Company  considers all highly
                  liquid temporary cash investments with an original maturity of
                  three months or less when purchased, to be cash equivalents.

         D.       REVENUE  RECOGNITION - Revenues are recognized as services are
                  provided.  Deferred revenue arises from the recognition of the
                  revenue over the period which the services are provided by the
                  Company's subsidiary,  Pinneast. These contracts are generally
                  completed in one year or less.

         E.       INCOME TAXES - Income taxes are accounted for under  Statement
                  of Financial  Accounting  Standards No. 109,  "Accounting  for
                  Income  Taxes," which is an asset and liability  approach that
                  requires   the   recognition   of  deferred   tax  assets  and
                  liabilities for the expected future tax consequences of events
                  that  have  been   recognized  in  the   Company's   financial
                  statements or tax returns.

         F.       STOCK  BASED  COMPENSATION  - The Company  accounts  for stock
                  transactions in accordance with APB Opinion No. 25 "Accounting
                  for Stock Issued to  Employees."  Additionally,  in accordance
                  with  Statement  of  Financial  Accounting  Standards  No. 123
                  "Accounting  for Stock  Based  Compensation,"  the Company has
                  adopted the proforma disclosure  requirements of Statement No.
                  123.

         G.       NET LOSS PER SHARE - The  Company  has  adopted  Statement  of
                  Financial  Accounting  Standard No. 128, "Earnings Per Share;"
                  specifying  the  computation,   presentation,  and  disclosure
                  requirements of earnings per share information. Basic earnings
                  per share has been calculated  based upon the weighted average
                  number of common shares  outstanding.  Stock options have been
                  excluded as common stock  equivalents in the diluted  earnings
                  per  share  because  they are  either  antidilutive,  or their
                  effect is not material.

         H.       FAIR VALUE OF FINANCIAL  INSTRUMENTS  - The  carrying  amounts
                  reported in the balance sheet for cash, receivables,  accounts
                  payable and accrued  expenses  approximate fair value based on
                  the short-term maturity of these instruments.

                                       F-8


<PAGE>



         I.       GOODWILL  -  Goodwill   resulting  from  the   acquisition  of
                  Pinneast.com,  Inc. represents the remaining unamortized value
                  of the excess of the purchase price over the fair value of the
                  net assets of  Pinneast.com,  Inc.  Goodwill is amortized on a
                  straight line basis over a 10 year period.

         J.       INTANGIBLE   ASSETS  -   Intangibles   assets   are  from  the
                  acquisition of Pinnacle East, Inc.  represents  customer lists
                  and  Pinnacle's  trade name.  These assets are  amortized on a
                  straight  line  basis  over  7  and  10  years,  respectively.
                  Additionally,   the  Company   recorded  the  costs   incurred
                  acquiring the marketing rights to certain  software  products.
                  This license is being amortized over 3 years.

         K.       IMPAIRMENT  OF  LONG-LIVED   ASSETS  -  The  Company   reviews
                  long-lived  assets for impairment  whenever  circumstances and
                  situations  change such that there is an  indication  that the
                  carrying  amounts may not be recovered.  At December 31, 1999,
                  the Company  believes that there has been no impairment of its
                  long-lived assets.

3.      ACQUISITION

        The following  table  summarizes  the acquisition of Pinneast.com, Inc.:

Purchase price:

Common stock, 500,000 shares issued                         $           750,000
Note payable                                                            100,000
                                                            --------------------
Total purchase price                                                    850,000
Less: Fair market value of assets acquired                             (248,381)
Liabilities assumed                                                     487,727
                                                            --------------------
Cost in excess of net book value of assets acquired         $         1,089,346
                                                            ====================

The  Company  attributed  the cost in  excess  of the net book  value of  assets
acquired as follows:

Goodwill                                                    $           100,000
Customer list                                                           450,000
Trade name                                                              539,346
                                                            --------------------
                                                            $         1,089,346
                                                            ====================











                                       F-9


<PAGE>



The following unaudited pro-forma information reflects the results of operations
of the Company as though the acquisition  had been  consummated as of January 1,
1998.

                                               Year Ended December 31,
                                  ----------------------------------------------
                                          1999                       1998
                                  ------------------        --------------------
Revenue                    $               1,133,052 $                   840,423
                                  ==================        ====================
Net loss                   $             (2,026,865) $                 (277,809)
                                  ==================        ====================
Net loss per share         $                  (0.24) $                    (0.05)
                                  ==================        ====================

4.       CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

         A.        CASH

                  The Company  maintains  cash  balances  at several  commercial
                  banks. Accounts at these financial institutions are insured by
                  the Federal Deposit Insurance Corporation up to $100,000.

         B.       ACCOUNTS RECEIVABLE

                  The  concentration  of credit risk in the  Company's  accounts
                  receivable  is mitigated by the  Company's  credit  evaluation
                  process,  credit limits,  monitoring procedures and reasonably
                  short  collection  terms.   Credit  losses  have  been  within
                  management's  expectations  and the  Company  does not require
                  collateral  to support  accounts  receivable.  During the year
                  ended  December  31,  1999,  three  customers   accounted  for
                  APPROXIMATELY  42% of the Company's  revenue.  These customers
                  accounted for approximately  34% of the Company's  outstanding
                  accounts  receivable  at December 31, 1999.  During the period
                  from July 10, 1998  (inception)  to  December  31,  1998,  the
                  Company did not generated any revenue.

5.       RELATED PARTY TRANSACTIONS

         As of December  31,  1998 the Company had a payable of $100,000  due to
         Edinburgh Consulting,  an entity which is wholly owned by a shareholder
         of the Company. Such payable arose subject to the terms of a consulting
         agreement  between   Edinburgh  and  the  Company.   Pursuant  to  such
         agreement,  Edinburgh  may  convert  the  payable  into  shares  of the
         Company's  stock upon such shares  becoming  publically  traded.  As of
         December 31, 1999 the  shareholders'  of Edinburgh had converted all of
         its  outstanding  debt into shares of the  Company's  common stock (see
         Note 8).

         As of  December  31,  1999,  CeleXx  owes  $9,013  in  advances  from a
         shareholder of the Company.  These advances are  non-interest  bearing,
         uncollateralized and have no specified due date for repayment.

         At December  31,  1999,  the Company has an  unsecured  note due to the
         former  shareholders  of Pinnacle  East,  Inc. for $100,000.  This note
         bears interest at 6% per annum and the principal  balance is due in May
         2000.

                                      F-10


<PAGE>



6.       INTANGIBLE ASSETS

         Intangible assets as of December 31, 1999 are as follows:

                                                                  December 31,
                                    Useful Life                      1999

                              -----------------         ------------------------
Goodwill                          10 years           $                   100,000
Customer lists                     7 years                               483,550
Trade name                        10 years                               538,596
License                            3 years                               112,122
                                                        ------------------------
                                                                       1,234,268

Less: accumulated amortization                                           119,689

                                                        ------------------------
                                                     $                 1,114,579
                                                        ========================

7.       LINE OF CREDIT

         The  Company's  Pinneast  subsidiary  has  three  credit  lines with an
         aggregate  availability of $300,000.  As of  December 31, 1999, Pineast
         has $258,542  outstanding on such lines of  credit which expire between
         February 1, 2000 and November 10, 2003 and  bear  interest at 8.75% per
         annum.  The lines  are  secured  by  substantially  all  the  assets of
         Pinneast.

8.       STOCKHOLDERS' EQUITY

         During the year ended  December 31, 1999,  a related  party,  Edinburgh
         Consulting,  converted the $448,640 owed to it for 1,733,333  shares of
         the Company's common stock.  Pursuant to a consulting agreement between
         CeleXx and Edinburgh Consulting,  1,333,333 of these shares were issued
         at $0.10 per share or  $133,333.  The  additional  400,000  shares were
         issued at $0.78 per share or $315,307.

         In November  1998,  CeleXx  entered  into an  agreement  with an entity
         partially  owned by a Director of the Company for financial  consulting
         services.  The Company  paid such entity  500,000  shares of its common
         stock and valued these shares at $ .25 per share and  accordingly,  has
         recorded  compensation  expense of  $125,000.  In  February  1999,  the
         Company  entered  into an  agreement  with a financial  consultant  and
         issued  300,000  shares of its common stock for  cash at $.10 per share
         aggregating  $30,000 and recorded $270,000 in compensation  expense for
         services provided.

         In 1999, the Company  issued  860,250 shares in a private  placement at
         $1.00 per share for total proceeds of $860,250.

         In November 1999, the Company issued 400,000 shares of its common stock
         to a company which provides financial  services.  These services are to
         include  raising  future  equity on behalf of the Company.  The Company
         valued the shares at the fair market  value on the date of issuance and
         recorded deferred financing costs of $250,000. This financing cost will
         be recorded as a reduction to additional  paid-in  capital  pursuant to
         the preferred stock offering in April 2000.

                                      F-11


<PAGE>



         From November 1999  to December 1999, the Company issued 400,000 shares
         of its  common  stock to a third  party in  order to  satisfy  its debt
         obligations  of $135,000.  These shares were valued at $184,000 and the
         Company recorded $49,000 in interest expense.

         In November 1999, the Company issued 650,000 shares of its common stock
         to two parties,  each of which provided  services to the Company in the
         first  quarter  of 1999.  The  Company  valued  these  shares  $.25 and
         recorded compensation expense of $162,500.

         In December 1999, the Company issued 150,000 shares of its common stock
         to settle a judgement brought against the Company. The company recorded
         $91,200 in expense regarding this settlement.

9.       EMPLOYMENT AGREEMENTS

         On March 1, 1999 CeleXx entered into three year  employment  agreements
         with  two  of  the  Company's  officers.   Such  employment  agreements
         aggregate  $145,000  annually  through  December  31, 1999 and $270,000
         annually through February 28, 2002.

10.      PREFERRED STOCK

         The Company is authorized to issue 1,000,000  shares of preferred stock
         at $.001 par value, the terms of which may be determined at the time of
         issuance  by the  Board of  Directors  without  further  action  by the
         shareholders.

11.      STOCK OPTION PLAN

         On March 1, 1999 the Board of Directors (the"Board") adopted the CeleXx
         Corporation 1999 stock option plan. The Board or CeleXx's  compensation
         committee  is  authorized  to issue to  eligible  persons  as defined a
         maximum  amount of 1,000,000  options  under such plan. No options have
         yet to be issued pursuant to the above plan.

12.      INCOME TAXES

         The Company  accounts  for income  taxes under  Statement  of Financial
         Accounting  Standards  No. 109,  "Accounting  for Income  Taxes" ("SFAS
         109").  SFAS 109  requires the  recognition  of deferred tax assets and
         liabilities  for both the expected  impact of  differences  between the
         financial  statements and tax basis of assets and liabilities,  and for
         the  expected  future tax  benefit to be derived  from tax loss and tax
         credit carryforwards.  SFAS 109 additionally requires the establishment
         of a valuation  allowance to reflect the  likelihood of  realization of
         deferred tax assets.

                                      F-12


<PAGE>



The provision  (benefit)  for income taxes differs from the amounts  computed by
applying the statutory federal income tax rate to income (loss) before provision
for income taxes is as follows:

                                              December 30,          December 31,
                                                  1999                  1998

                                             -------------        --------------
Taxes benefit computed at statutory rate     $   (763,000)        $    (107,000)
Losses for which income tax benefit not
utilized                                          763,000               107,000
                                             -------------        --------------
Net income tax benefit                                  -                     -
                                             =============        ==============

The Company has a net  operating  loss  carryforward  for tax purposes  totaling
approximately $2,223,000 at December 31, 1999 expiring in between the years 2014
and 2019.

Listed below are the tax effects of the items  related to the  Company's net tax
liability:

                                              December 31,          December 31,
                                                  1999                  1998

                                             -------------        --------------
Tax benefit of net operating loss
carryforward                                 $     763,000        $     107,000
Valuation Allowance                               (763,000)            (107,000)
                                             -------------        --------------
Net deferred tax asset recorded              $           -        $           -
                                             =============        ==============

13.      COMMITMENT

         In May 1999 CeleXx  entered  into a five year lease for office space at
         an annual base rental of $92,500 for the initial year. Such base rental
         shall  increase  by 4% each year.  The lease is to  commence  when such
         premises are  available  for  occupancy.  CeleXx is  currently  leasing
         temporary office space from the same landlord at $5,300 per month.

14.   SEGMENT INFORMATION

          The Company has adopted  Statement of Financial  Accounting  Standards
          No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
          Information"   ("SFAS  131").  SFAS  131  establishes   standards  for
          reporting information regarding operating segments in annual financial
          statements and requires selected  information for those segments to be
          presented in interim  financial  reports issued to stockholders.  SFAS
          131 also establishes  standards for related disclosures about products
          and services,  and geographic areas. Operating segments are identified
          as components of an enterprise about which separate discrete financial
          information  is  available  for  evaluation  by  the  chief  operating
          decision maker or decision  making group,  in making  decisions how to
          allocate  resources  and  assess  performance.  To date,  the  Company
          through its  subsidiary,  Pinneast,  has operations in principally one
          segment,  the  development  of  multimedia  educational  programs  for
          industry and government within the United States. Therefore, the chief
          operating   decision  maker  does  not  receive   discrete   financial
          information about individual components of the Company's operations.

                                      F-13


<PAGE>



    15.   SUBSEQUENT EVENT

On April 10,  2000,  the  Company  issued 350 shares of 6% series A  convertible
preferred  stock at $10,000 per share plus common  stock  purchase  warrants and
received gross proceeds of $3,500,000.  The preferred  shares are convertible at
the lower of the closing bid price on the day  preceding the closing of a common
stock  offering or 80% of the five day common stock  average  price prior to the
date of conversion. Th shares are convertible immediately upon the effectiveness
of a registration  statement.  The Company maintains a redemption option at 125%
of the common stock offering price.

                                      F-14
<PAGE>



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

         None.

                                       16
<PAGE>




                                    Part III

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

       The following table sets forth the names,  positions with the Company and
ages of the executive  officers and directors of the Company.  Directors will be
elected at the Company's  annual meeting of shareholders  and serve for one year
or until their  successors are elected and qualify.  Officers are elected by the
Board and their terms of office are, except to the extent governed by employment
contract, at the discretion of the Board.

Executive Officers and Directors

         NAME                       AGE              POSITIONS HELD

Douglas H. Forde                    57            Chairman, President and CEO
David C. Langle                     49            Vice President Finance and CFO
Lionel Forde                        55            Director and Vice President
Vincent Caminiti                    47            Director and COO
Moty Hermon                         57            Director
William Lerner                      63            Director
David Burke                         56            Director and CEO of CMI
John Straatsma                      45            Secretary




     DOUGLAS H. FORDE.  Mr. Forde has been  Chairman of the Board of  Directors,
President and Chief  Executive  Officer since August 1999.  From June 1998 until
August 1999, he was Director of Mergers and Acquisitions  for the Company.  From
November 1996 until June 1998, Mr. Forde was Vice President,  Strategic Planning
for Computer  Access  International,  Inc. Prior to November 1996, Mr. Forde had
been a business consultant to numerous  companies,  ranging from the Fortune 500
to smaller entrepreneurial businesses. He is a graduate of the University of the
Virgin Islands, the University of Illinois, and the Bernard M. Baruch College of
the City  University of New York and holds degrees in accounting,  finance,  and
taxation.

     DAVID C. LANGLE.  Mr.  Langle is currently the  Company's  Vice  President,
Finance and Chief  Financial  Officer.  Mr.  Langle  joined the Company in March
2000.  Prior to joining  the  Company,  he was Vice  President  and CFO of Terra
Telecommunications  Corp.  since  September  1997. Mr. Langle has also served in
various  senior  management  capabilities  as Vice  President,  Chief  Financial
Officer and Director for three Florida based NASDAQ and OTC companies. From 1982
to 1991 Mr.  Langle  was  employed  by the Miami  office of Spicer &  Oppenheim,
CPA's,  an  international  accounting and consulting firm where he concluded his
tenure as an Audit  Partner.  He is a CPA and has a Bachelor  of Science  Degree
from the University of Illinois in Chicago.

     LIONEL FORDE. Mr. Forde is Vice President  ,former Chief Financial  Officer
and a Member of the Board of Directors of the Company since February 1999.  From
November 1997 until February 1999 he was President of the international group at
Computer Access International,  Inc.,  responsible for developing markets in the
Caribbean and Latin  America.  Prior to that,  Mr. Forde was a senior manager in
the Color Paper  Products  Division at Eastman  Kodak  Company.  He holds an MBA
(Honors)  degree  from  Long  Island  University  and a BS  degree  in  Business
Administration from Eastern Illinois University.

                                       17
<PAGE>

     VINCENT A. CAMINITI.  Mr. Caminiti is Chief Operating  Officer and a member
of the Board of Directors of the Company  since January of 1999. . Since June of
1998 Mr.  Caminiti has devoted full time to the business  development  of CeleXx
Corporation.  Beginning in 1994 through 1998 Mr.. Caminiti was Managing Director
of Rendo International,  LTD. The Company,  with offices in Denver, Los Angeles,
Hong Kong & London,  was  active  in  business  consulting  for  clients  in the
Communications   and  Information   Technology  fields.  The  business  included
identifying  strategic  business  alliances and developing new market strategies
for clients,  such as CBS  Television  to  distribute  programming  in the Asian
markets.

     MOTY  HERMON.  Mr.  Hermon  has been a Member of Board of  Directors  since
February  1999.  Mr.  Hermon  has been an  international  investment  banker and
business  consultant  for the past five years.  From  December  1979 to December
1986,  he served as General  Manager of Elron,  Inc., a New York Stock  Exchange
listed company. Elron is the largest group of high tech companies in Israel with
revenues of approximately $1.5 billion. From December 1992 to November 1994, Mr.
Hermon was the exclusive  representative and partner of Prudential Securities in
Israel.  He was also the exclusive  representative  and partner of TA Associates
from January 1986 to July 1988. TA Associates is a Boston based venture  capital
firm with over $1.5 billion under management. Mr. Hermon holds a BA in Economics
and Political Science from Tel-Aviv University.

     WILLIAM  LERNER.  Mr.  Lerner  has been a member of the Board of  Directors
since February 1999.  Since 1994, Mr. Lerner has been in the private practice of
corporate  and  securities  law with offices in  Pennsylvania  and Florida.  Mr.
Lerner is also Counsel to the law firms of Sweeney & Associates  (Pittsburgh) an
Snow  Becker  Krauss,  PC (New York).  He is a director of Seitel,  Inc. (a NYSE
listed oil and gas  producing  company),  Helm  Resources,  Inc. (an Amex listed
company that  provides  mezzanine  financing to middle  market  companies),  and
Micros-to-Mainframes,  Inc.  (a NASDAQ  listed  company  and  producer  of high-
technology  communications and computer services to Fortune 500 companies).  Mr.
Lerner is a graduate of Cornell University (1955) and of the New York University
School of Law (1960).  He is a member of the bars of New York and  Pennsylvania.
He has served with the U.S.  Securities  and Exchange  Commission,  the American
Stock Exchange and as General Counsel to Hornblower,  Weeks, Hemphill & Noyes, a
New York Stock Exchange brokerage/investment firm.

         DAVID BURKE Sr. Mr.  Burke was  recently  appointed  as a member of the
Board of Directors of the Company and CEO of Computer Marketplace, Inc. (CMI), a
company he founded  in 1983.  Prior to CMI,  Mr.  Burke had  fifteen  years in a
career that spanned several management positions including technical supervisor,
manufacturing  engineering manager,  production manager, and international sales
manager with the  Metrigraphics  Division of Dynamics  Research  Corporation,  a
multinational  manufacturer  and distributor of  electro-optical  products.  Mr.
Burke received his technical and business  education at Worchester  Polytechnic,
Lowell  Technological   Institute  and  Boston  University.   He  also  received
specialized  training in information  systems from Novell,  Microsoft,  IBM, HP,
Compaq and other "Tier One" microcomputer and software producers. He is a Member
of  the  American   Production  &  Inventory  Control  Society.  He  co-authored
"Metriform Fabrication,  Electronic Packaging and Production," May 1981, Chaners
Publishing.

         JOHN STRAATSMA.  Mr. Straatsma has served as secretary since October of
1999.  Since August of 1998, he has acted as a consultant to CeleXx for business
development and operations.  In September 1995, Mr. Straatsma founded, and since
has acted as president of Consultants  Ltd., a company that performs  consulting
work for  companies  active in the IT  industry.  For January  1983 until August
1995,  Mr.  Straatsma  was  president of Trinidad  Computers  Ltd., a company he
helped to found.  His  educational  background  includes a Bachelor  of Commerce
degree from the University of Guelph, in Guelph,  Ontario,  Canada, and a Master
of Science degree in Management from Florida  International  University,  Miami,
Florida.

                                       18
<PAGE>

Item 10. Executive Compensation

         The following table sets forth information relating to the compensation
paid by CeleXx  during the past fiscal year (CeleXx had no  operations  prior to
January 1, 1999) to its Chief Executive  Officer and President.  No options were
granted to, and no options were  exercised by any of our  executive  officers or
directors during 1999.
<TABLE>
<CAPTION>

                                           SUMMARY COMPENSATION TABLE

                                    Annual Compensation                         Long-Term Compensation

                            ----------------------------------------     --------------------------------------
                                                                               Awards

                                                                         ------------------------
                                                                                      Securities
                                                          Other                       Under-
                                                          Annual       Restricted     Lying                     All Other
Name and Principal                                        Compen-         Stock       Options/         LTIP     Compen-
         Position          Year      Salary   Bonus       sation        Award(s)        SARs         Payouts    sation
           <S>             <C>        <C>     <C>         <C>           <C>            <C>            <C>        <C>

           (a)              (b)       (c)     (d)          (e)           (f)            (g)            (h)        (i)
----------------------------------------------------------------------------------------------------------------------
  Doug Forde, Chairman,     1999   $ 34,900   -0-         -0-           -0-            -0-             -0-        -0-
    President and CEO       1998   $ 60,000
-----------------------------------------------------------------------------------------------------------------------

   STOCK OPTIONS            OPTION/SAR GRANTS IN LAST FISCAL YEAR

Individual Grants                                                              Potential Realizable   Alternative
                                                                                     Value At              To
                                                                             Assumed Annual Rates Of  (f) and (g):
                                                                                      Stock            Grant Date
                                                                             Price Appreciation For     Value
                                                                                      Option
                                                                                       Term
                                                                                                       Grant Date
                                                                               5% ($)      10% ($)      Present
                                                                                 (f)         (g)        Value $
                                                                                                          (h)

       Doug Forde            -0-         -0-   N/A         N/A                  N/A          N/A          N/A

</TABLE>
                                       19
<PAGE>


OPTION EXERCISES AND HOLDINGS

       The following table sets forth  information  with respect to the exercise
of options  to  purchase  shares of common  stock  during the fiscal  year ended
December 31, 1999,  of each person named in the summary  compensation  table and
the unexercised options held as of the end of the 1999 fiscal year.

         AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
                                OPTION/SAR VALUES
<TABLE>
<CAPTION>

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

                                                                             Number of              Value Of
                                                                            Securities            Unexercised
                                                                            Underlying            In-The-Money
                                                                            Unexercised           Options/SARs
                                                                           Options/SARs         At Fiscal Year-
                                         Shares                         At Fiscal Year-End            End
                                      Acquired On          Value           Exercisable/           Exercisable/
                                        Exercise         Realized          Unexercisable         Unexercisable

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

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

Doug Forde                                N/A               N/A                 N/A                   N/A

--------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       20
<PAGE>


EMPLOYMENT AGREEMENTS

DOUGLAS H. FORDE, CHAIRMAN OF THE BOARD AND PRESIDENT

         Under the terms of an employment  agreement between the Company and Mr.
Forde, in consideration for his services to the Company,  Mr. Forde will receive
an annual  base  salary of  $150,000  as of January 1, 2000.  Mr.  Forde is also
eligible to participate in the Company's Incentive Stock Option Plan.

LIONEL FORDE, VICE PRESIDENT AND DIRECTOR

         Under the terms of an employment  agreement between the Company and Mr.
Forde, in consideration for his services to the Company,  Mr. Forde will receive
an annual  base  salary of  $120,000  as of January 1, 2000.  Mr.  Forde is also
eligible to participate in the Company's Incentive Stock Option Plan.

         All Executive Officers of the Company are extended Employment Contracts
with a term of three (3) years, renewable annually thereafter.

1999 STOCK OPTION PLAN

         On March 1, 1999 we adopted and  implemented  a Stock  Option Plan (the
"Plan").  The  Plan  increases  the  employees',   advisors',  consultants'  and
non-employee directors' proprietary interest in us and aligns more closely their
interests  with the interests of our  shareholders.  The Plan also maintains our
ability to attract and retain the services of experienced  and highly  qualified
employees and non-employee directors.

         Under the Plan, we reserved an aggregate of 1,000,000  shares of common
stock for issuance  pursuant to options granted under the Plan ("Plan Options").
Our  Board  of  Directors  or  a  Committee  of  the  Board  of  Directors  (the
"Committee")  will  administer  the  Plan  including,  without  limitation,  the
selection of the persons who will be granted Plan  Options  under the Plan,  the
type of Plan  Options to be granted,  the number of shares  subject to each Plan
Option and the Plan Option price.

         Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive  Options") under Section 422 of the Internal
Revenue  Code  of  1986,  as  amended,   or  options  that  do  not  so  qualify
("Nonqualified  Options").  In addition,  the Plan also allows for the inclusion
ofa reload option provision ("Reload Option"),  which permits an eligible person
to pay the  exercise  price of the Plan Option with shares of common stock owned
by the  eligible  person and  receive a new Plan  Option to  purchase  shares of
common  stock  equal in number to the  tendered  shares.  Any  Incentive  Option
granted under the Plan must provide for an exercise  price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the  exercise  price of any  Incentive  Option  granted to an eligible  employee
owning  more than 10% of our  common  stock  must be at least  110% of such fair
market  value as  determined  on the date of the  grant.  The term of each  Plan
Option and the manner in which it may be exercised is determined by the Board of
the Directors or the Committee,  provided that no Plan Option may be exercisable
more than 10 years after the date of its grant and, in the case of an  Incentive
Option granted to an eligible employee owning more than 10% of our common stock,
no more than five years after the date of the grant.

         The exercise price of  Nonqualified  Options shall be determined by the
Board of Directors or the Committee.

         The per share purchase price of shares subject to Plan Options  granted
under  the  Plan  may be  adjusted  in  the  event  of  certain  changes  in our
capitalization,  but any such  adjustment  shall not change  the total  purchase
price payable upon the exercise in full of Plan Options granted under the Plan.

                                       21
<PAGE>

         Our  officers,   directors,  key  employees  and  consultants  and  our
subsidiaries  (if  applicable  in  the  future)  will  be  eligible  to  receive
Nonqualified Options under the Plan. Only our officers,  directors and employees
who are  employed by us or by any  subsidiary  thereof  are  eligible to receive
Incentive Options.

         All Plan Options are nonassignable and nontransferable,  except by will
or by the laws of descent  and  distribution,  and during  the  lifetime  of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause,  or if an  optionee is not an employee of but is a member of our Board of
Directors and his service as a Director is terminated for any reason, other than
death or  disability,  the Plan Option  granted to him shall lapse to the extent
unexercised on the earlier of the expiration  date or 30 days following the date
of termination. If the optionee dies during the term of his employment, the Plan
Option  granted to him shall lapse to the extent  unexercised  on the earlier of
the  expiration  date of the Plan Option or the date one year following the date
of the optionee's  death.  If the optionee is permanently  and totally  disabled
within the meaning of Section 22(c)(3) of the Internal Revenue Code of 1986, the
Plan Option  granted to him lapses to the extent  unexercised  on the earlier of
the  expiration   date  of  the  option  or  one  year  following  the  date  of
suchdisability.

         The Board of Directors or the Committee may amend, suspend or terminate
the Plan at any time, except that no amendment shall be made which (i) increases
the total number of shares  subject to the Plan or changes the minimum  purchase
price  therefore  (except  in  either  case in the event of  adjustments  due to
changes in our  capitalization),  (ii) affects  outstanding  Plan Options or any
exercise right thereunder,  (iii) extends the term of any Plan Option beyond ten
years,  or (iv) extends the  termination  date of the Plan.  Unless the Plan has
been suspended or terminated by the Board of Directors, the Plan shall terminate
in  approximately  10  years  from  the date of the  Plan's  adoption.  Any such
termination  of the Plan  shall not  affect  the  validity  of any Plan  Options
previously granted thereunder.

         As of March 31, 2000 no options have been granted.

Section 16(a)  Beneficial Ownership Reporting Compliance

COMPLIANCE

         Pursuant to Section 16(a) of the Securities  Exchange Act of 1934, each
executive officer, director and beneficial owner of 10% or more of the Company's
Common Stock is required to file certain forms with the  Securities and Exchange
Commission.  A report of beneficial  ownership of the Company's  Common Stock on
Form  3 is  due at  the  time  such  person  becomes  subject  to the  reporting
requirement  and a report  on Form 4 or 5 must be filed to  reflect  changes  in
beneficial  ownership occurring  thereafter.  During the year ended December 31,
1999 and as of March 31, 2000, none of the executive  officers,  directors,  and
beneficial owners of 10% or more of the Company's Common Stock were current with
these filing requirements.

                                       22
<PAGE>





Item 11. Security Ownership of Certain Beneficial Owners and Management

         The  following  table  sets forth  certain  information  regarding  the
Company's shares ("Shares") of Common Stock, par value $.001, beneficially owned
as of March 31,2000 for:

-    each  shareholder  known by the Company to be the beneficial  owner of five
     (5%) percent or more of the Company's outstanding Common Stock, each of the
     Company's executive officers and directors, and

-    all executive officers and directors as a group.

         In general, a person is deemed to be a "beneficial owner" of a security
if that  person  has or shares  the power to vote or direct  the  voting of such
security,  or the power to  dispose  of or to  direct  the  disposition  of such
security.  A person is also deemed to be a beneficial owner of any securities to
which the person has the right to acquire beneficial ownership within sixty (60)
days.  As of  March  31,2000  there  were  12,912,813  shares  of  Common  Stock
outstanding.

                                                         Approximate
                                                         Percentage of

                                  No. of                 Outstanding Shares

NAME(1)                           SHARES

                                  BENEFICIALLY OWNED

Douglas H. Forde                      775,000                 6.0%
Lionel Forde(2)                       650,000                 5.0
Vincent Caminiti                      750,000                 5.8
Moty Hermon                           500,000                 3.9
William Lerner                           -                     -
Michelle J. Michalow(3)             1,150,000                 8.9
John W. Straatsma                     250,000                 1.9
All Executive Officers and
  Directors as a group (6 persons)  2,925,000                22.65
----------

(1)  Unless  otherwise  indicated,  the address of each of the persons set forth
     above is 7251 West Palmetto Park Road, Boca Raton, FL 33433.

(2)  Lionel Forde is the brother of Douglas H. Forde.

(3)  Ms. Michalow is a former officer of CeleXx. Includes 1,733,333 shares owned
     by Edinburgh Consulting, which is wholly-owned by Ms. Michalow.

Item 12. Certain Relationships and Related Transactions

         In November 1998, we entered into an agreement  with Girmon  Investment
Co., Limited, a company which is 33% owned by Moty Hermon, a member of our board
of directors.  The agreement is for corporate  finance advisory  services for an
initial period of 36 months. As consideration  for business,  advisory and other
consulting services performed on our behalf,  Girmon Investment received 500,000
shares of our Common Stock. Each share was valued at $.25 for an aggregate value
of $125,000.

         Since  February  1998,   Edinburgh   Consulting,   an  entity  that  is
wholly-owned by Michelle J. Michalow,  a former officer of CeleXx, has loaned us
$664,761.  In December  1998,  Edinburgh  contributed  to capital  $216,121.  In
February 1999, pursuant to the terms of a consulting agreement between Edinburgh
and CeleXx,  Edinburgh converted $133,333 of the outstanding debt into 1,333,333
shares  of our  common  stock at $.10 per  share.  Additionally,  in March  1999
Edinburgh  converted  the remaining  $315,307 into 400,000  shares of our common
stock at $.78 per share.

                                       23
<PAGE>

Item 13. Exhibits and Reports on Form 8-K

     (a) Exhibits.

          The  Exhibits  listed  below are filed or  incorporated  by  reference
          herein.

                                  EXHIBIT INDEX

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


Exhibit                      Description of Document
Number                       -----------------------

------


21.1           Subsidiary ofCeleXx Corporation.

     (b) Reports on Form 8-K.

          The  Company  did not file any  reports  on Form 8-K  during the three
          months ended December 31,1999.

                                       24
<PAGE>




SIGNATURES

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

Dated: April 17, 2000                                    REGISTRANT:

                                                         CeleXx Corporation

                                                      By:    /s/ Doug H. Forde
                                                         -----------------------
                                                                 Doug H. Forde
                                               President, Chairman of the Board,
                                                     and Chief Executive Officer

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

By:           /s/ Doug H. Forde                                   March 31, 2000
      ---------------------------------------------------

                  Doug H. Forde
                  President, Chairman of the Board,
                  and Chief Executive Officer
                  (principal executive officer)

By:           /s/ David C. Langle                                 March 31, 2000
      ---------------------------------------------------

                  David C. Langle
                  Vice President Finance
                  And Chief Financial Officer

By:           /s/
         ---------------------------------------------------
                  Director


By:           /s/

      ---------------------------------------------------
                  Director


By:           /s/

         ---------------------------------------------------
                  Director

A copy of the Company's Annual Report on Form 10-KBS for the year ended December
31, 1999,  with  exhibits,  may be obtained by any  stockholder  of the Company,
without charge, by writing to: CELEXX  CORPORATION,  Attn:  Investor  Relations,
7251 W. Palmetto Road, Suite 208, Boca Raton, FL 33433

                                       25
<PAGE>

                                  Exhibit Index

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

 Exhibit

 Number                      Description of Document

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


21.1        Subsidiary of CeleXx Corporation

27          Financial Data Schedule