FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   (Mark One)
(X)                       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999.

                                             OR

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

For the transition period from _______ to ____________.

Commission file number 0-22095

                         EAST COAST BEVERAGE CORPORATION
             (Exact name of registrant as specified in its charter)

          COLORADO                                         84-1039267
 (State or other jurisdiction of incorporation         (I.R.S. Employer
    or organization)                                   Identification No.)

     1750 University Drive
          Suite 117
    Coral Springs, Florida                                  33071
(Address of principal executive offices)                  (Zip Code)

       Registrant's telephone number, including area code: (954) 796-8060

        Securities registered pursuant to Section 12(b) of the Act: None

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

                         Common Stock, $0.0001 par value
                                (Title of Class)

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

    The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of March 31, 2000, was approximately $6,460,000. Shares of common
stock  held by each  officer,  director  and  principal  shareholder  have  been
excluded in that such persons may be deemed to be affiliates of the Registrant.

Documents Incorporated by Reference:   None

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

    The  Registrant's  revenues  during the year ended  December  31,  1999 were
$4,403,499.

    As of March 31, 2000, the Registrant  had 7,872,654  issued and  outstanding
shares of common stock.


<PAGE>



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

      East Coast Beverage Corp.  ("ECBC") is a Colorado  corporation which prior
to September 1999 did business under the name USA Service Systems, Inc. ("USA").
Between November 1998 and July 1999 USA provided retail stores and manufacturers
with  product  assembly,  product  demonstrations,  point  - of -  sale  product
displays, and inventory counts and audits.

      As of July 1999 USA had entered into letters of intent for the acquisition
of four  companies  engaged  in the  same  business  as that  conducted  by USA.
However, USA was unable to obtain approximately  $4,000,000 in additional equity
capital  which  was  needed  to  finance  these  acquisitions.  In July 1999 USA
essentially discontinued its business and made plans to distribute its remaining
assets (having a minimal value) to certain officers and directors of USA.

      Effective  August 31, 1999 USA acquired all of the issued and  outstanding
shares of East Coast  Beverage  Corp. in exchange for 5,040,000  shares of USA's
common stock.  In connection  with this  transaction the name of the Company was
changed to "East Coast  Beverage  Corp." and the  management of USA resigned and
was  replaced by the  management  of ECBC.  ECBC's  business  now  involves  the
development,  production and distribution of Coffee House USA(TM), a proprietary
line of all natural, ready to drink ("RTD") bottled coffee drinks.

      All  historical  share data in this report has been  adjusted to reflect a
8.194595-for-one  reverse  split of ECBC's  common  stock which was  approved by
ECBC's shareholders on February 22, 2000.

      Coffee  is the  number  one  drink  in the  world,  with  Americans  alone
consuming  over  $5.8  billion  in  1997.   According  to  the  National  Coffee
Association in 1998 over 108 million  Americans  drank an espresso,  cappuccino,
latte or iced coffee,  a 35% increase over the previous  year.  Three years ago,
frozen coffee drinks came into the market and the  consumption  of frozen coffee
has doubled every year.  However,  the drawback with frozen coffees is they must
be  consumed  immediately  and could not be sold to the mass  market.  From this
evolved the RTD (ready to drink) Iced Coffee category,  which in a few years has
become the fastest  growing  segment in the New Age category with an increase of
153% in 1997 and 83% in 1998.  The New Age  category  refers  to  premium-priced
beverages that were created to respond to emerging consumer trends and interest.

      Sales by category of New Age Beverages are summarized below:

                                                             Year Ending 1998
       NEW AGE BEVERAGES                                     (in millions)

       RTD SS Fruit beverages (Tropicana, Very Fine)        $2,125      27.5%
       RTD PET bottled waters (Perrier Group, Geyser)        1,500      19.4%
       Sports Beverages (Gatorade, Powerade, All Sport)      1,510      19.5%
       RTD Teas (Snapple, Arizona, Mystic, Lipton)           1,340      17.4%

<PAGE>

       Sparkling flavored waters (Talking Rain)                450       5.8%
       Premium Soda                                            360       4.6%
       RTD Coffee (Starbucks, regional brands)                 200       2.6%
                                                              -----     ----

                     SUBTOTAL NEW AGE                       $7,485

       Nutrient Enhanced Drinks                                100       1.3%
       Fresh Packed Juices                                      55        .7%
       Smoothies                                                45        .6%
       Vegetable/Fruit Juice Blends                             20        .3%
       All Other                                                25        .3%
                                                              ----       -----

                                      TOTAL                 $7,730

Product

      ECBC's product is more than just a cold coffee,  tasting like a milkshake,
and is marketed as such. It can be substituted at any occasion where a milkshake
might be used with a hamburger at lunch,  as a stand-alone  snack,  etc.  ECBC's
iced coffee is naturally  flavored and enhanced  with whole milk and rich coffee
bean extract. ECBC's products are all natural, low in fat, visually exciting and
have a broad spectrum of flavors.

      ECBC's  products can be  differentiated  with those of  competitors by its
taste, advanced  technological Fuji wrap and ECBC's proprietary glass container.
Each of the flavors used by ECBC has gone through extensive consumer tasting and
approval. ECBC's iced coffee comes in the following flavors:

            Cinnamon, Mocha, Vanilla Mousse, Regular, Hazelnut, Toasted Almond,
            German Chocolate, and Banana's Foster

      ECBC's  proprietary  formulas for its products are trade  secrets and ECBC
requires  its  manufacturers,   employees,   brokers  and  consultants  to  sign
confidentiality agreements.
ECBC's glass container is also proprietary and design protected.

Production

      ECBC does not own or  operate  any  manufacturing  facilities,  but rather
outsources  manufacturing  and  bottling to third party  copackers.  Outsourcing
provides ECBC production flexibility and capacity and allows management to focus
its energy and  resources  on marketing  and sales while  avoiding the costs and
risks associated with production .

      ECBC's  products  are  manufactured  using  ECBC's  proprietary  formulas.
Copackers may not produce  products for any other customer using these formulas.
ECBC purchases flavor, nutrient, and packaging raw materials for delivery to the
copacker.

      ECBC's  copackers  have the capacity to produce 70,000 cases a day and are
able to  fulfill  ECBC's  planned  production  needs for at least the next three
years.  If ECBC's growth  exceeds the production  capacity of its copackers,  or
they were unable or unwilling  to continue  production,  ECBC  believes it could
locate  other  copackers  to meet  its  production  needs  without  any  serious
disruption to ECBC's operations.

<PAGE>

      The  copackers  produce and package  ECBC's  products in  accordance  with
Standard Operating  Procedures for Good Manufacturing  Practice specified by the
Food and Drug Administration.

      ECBC does not have any credit  line with any bank.  Should  ECBC's  growth
exceed what is  anticipated,  a line of credit may be required to cover  working
capital needs.

Distribution and Marketing

ECBC uses a network of distributors to market its iced coffee beverage.  Certain
distributing  companies  used by ECBC have long term  relationships  with  major
grocery chains and as a result, are capable of rapidly gaining access into chain
shelves at reduced rates.

      Other  distributors  are  dominant  in the  convenience/deli/single  serve
business  that is  essential  in  building  a brand  from  the  ground  up.  The
distributors  in each  territory have been selected based on their impact in the
territory, financial strength, commitment to building the brand and expertise in
specific  distribution  venues. In many cases, ECBC will employ two distributors
to launch  the  product in a specific  region,  allowing  each to focus on their
respective area of distribution expertise.

      ECBC has recently  engaged Super Value (Emerald and Portland  Bottling) to
bring its products to Asia, South America and Europe.

      During the year ended  December 31, 1999 mass and super markets  accounted
for approximately 70% of total revenues, sales to convenience stores represented
28% of revenues and foreign sales represented the remainder. It is expected that
foreign  sales will  account for 35% of total  sales once  ECBC's  international
network is established.

     ECBC  sells  its  products   through   distributors   and   wholesalers  to
supermarkets,  convenience stores, drug store chains and oil company convenience
stores.  As of December  31, 1999 ECBC was  shipping  product to customers in 44
states.

     ECBC believes that there may be an  opportunity  to distribute its products
to a number  of  national  food  and  beverage  chains  under  private  labeling
agreements.

      ECBC plans to use a combination of print billboards and radio advertising,
with  emphasis on  regional  and special  interest  publications,  such as those
targeted towards mainstream consumers, to increase consumer awareness and demand
for its products.  The  advertising  selected will coincide with the established
channels and points of distribution.



<PAGE>


      Free samples will be  distributed  to  consumers,  store  managers,  store
employees and caterers to generate product awareness.

      Paper  point of sale  items  will be made  available  to  enhance  product
visibility and exposure.  Other promotional items, such as drink coolers will be
made available on a co-op basis to enhance product visibility and exposure.

      ECBC also plans to  participate  as an exhibitor at all major retail trade
and distributor shows.

Competition

      ECBC's products compete with the following brands:

National Brands

Starbucks "Frappuccino" - Distributed  exclusively by Pepsi-Cola.  Three flavors
available in glass bottles.  Sold in supermarkets in four packs only. Shelf life
is 3 months.

Regional Brands

       "Ghirardelli  Iced  Coffees"  -  Limited  nationwide  - Only two  flavors
available in cans.

       "Havana  Iced  Cappuccino"  - Scattered  distribution  in New England and
       Mid-Atlantic- 3 flavors available in cans.

       "Main Street Cafe' Iced Lattes" - Manufactured by GehI's Guernsey Farms -
       5 flavors available in cans -scattered distribution.

       "The  Coffee" - by Pokka  Beverages,  Inc.  California  - Scattered
       distribution  -3 flavors available in cans.

       "America's  Best" - Available in Northeast  only - 5 flavors  available
       in both glass and cans.

       "Jamaica Gold" - Distributed in Northwest -3 flavors available in cans

   New Entries

       Procter  and  Gamble  is  testing  a  new  product  called   "Jakada"  in
       California.   The  results  so  far  are  extremely   positive;   rollout
       information is not available.

       Coca-Cola is attempting to trademark the name "Javalait", identified as a
       frozen coffee drink. No other information is known at this time.

Research and Development

      A number of new  products  are  undergoing  laboratory  tests and  nearing
completion.  These products include a dietary line and new flavors, as well as a
coffee based  nutraceutical  line. ECBC is also considering the development of a
Decaf product.

<PAGE>

Employees and Offices

      As of March 31,  2000,  ECBC  employed  twenty-one  persons on a full-time
basis. Seven employees serve in management or administrative capacities, and the
remainder are hourly workers in ECBC's operations.  None of ECBC's employees are
covered by a collective  bargaining  agreement.  ECBC has never  experienced  an
organized work stoppage,  strike or labor dispute.  Management  considers ECBC's
relations with its employees to be good.

ITEM 2.  DESCRIPTION OF PROPERTY

      ECBC leases a 1,200 square foot  production  and office  facility in Coral
Springs,  Florida  at an annual  rent of  $14,000.  The  lease on this  facility
expires in May 2000.

ITEM 3.  LEGAL PROCEEDINGS

      None

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

         Not Applicable

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

         As of March 31,  2000  there  were  approximately  400 owners of ECBC's
common stock.  At the present time,  there is no public market for ECBC's common
stock.

         Holders of common stock are  entitled to receive such  dividends as may
be declared by the Board of Directors out of funds legally available and, in the
event of  liquidation,  to share pro rata in any  distribution  of ECBC's assets
after payment of liabilities. The Board of Directors is not obligated to declare
a dividend.  ECBC has not paid any  dividends  on its common stock and ECBC does
not have any current plans to pay any common stock dividends.

         The provisions in ECBC's Articles of  Incorporation  relating to ECBC's
preferred  stock would allow  ECBC's  directors  to issue  preferred  stock with
rights to  multiple  votes  per share and  dividends  rights  which  would  have
priority  over any  dividends  paid with  respect to ECBC's  common  stock.  The
issuance of preferred stock with such rights may make more difficult the removal
of  management   even  if  such  removal  would  be  considered   beneficial  to
shareholders  generally,  and  will  have the  effect  of  limiting  shareholder
participation in certain  transactions  such as mergers or tender offers if such
transactions are not favored by incumbent management.



<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         The following  selected  financial  data should be read in  conjunction
with the more detailed financial statements and related notes included as a part
of this report.

Statement of Operations Data:

                      Period from Inception (March 25, 1998        Year Ended
                               to December 31, 1998           December 31, 1999
                      --------------------------------------------------------

Revenues                          $478,066                       $4,403,499
Cost of Sales                     (344,493)                      (3,218,516)
Selling, General and
   Administrative Expenses        (831,631)                      (5,624,943)
Interest Expense and Financing
    Fees                           (40,259)                        (820,333)

Net (Loss)                       $(738,317)                     $(5,260,293)
                                 ==========                     ============

Balance Sheet Data:
                            December 31,     December 31,     December 31, 1999
                                1998            1999              (Pro Forma)

Current Assets              $1,560,709        $ 2,516,671     $  4,828,075
Total Assets                 1,751,922          3,195,992        5,507,396
Current Liabilities          2,489,739          3,245,764          633,152
Total Liabilities            2,489,739          5,646,764        3,034,152
Working Capital (Deficit)     (929,030)       (   729,093)       4,194,923
Shareholders' Equity
   (Deficit)                  (737,817)        (2,449,772)       2,474,244

      Subsequent  to December  31, 1999 ECBC sold  933,901  shares of its common
stock to private  investors at a price of $2.75 per share. ECBC paid commissions
of $256,823 in connection with the sale of these shares.

    In January  2000 ECBC  issued  694,973  shares of its  common  stock to John
Calebrese, an officer, director and principal shareholder of ECBC, in settlement
of $1,750,000, plus accrued interest of $160,000, owed to Mr. Calebrese by ECBC.

      Also in January  2000 ECBC issued  316,192  shares of its common  stock to
other  creditors in  settlement of $650,000,  plus accrued  interest of $52,612,
owed to these creditors by ECBC.

      The pro  forma  balance  sheet as of  December  31,  1999  reflects  these
transactions as if they had occurred on December 31, 1999.


<PAGE>



Period From Inception (March 25, 1998) to December 31, 1998

      ECBC first began shipping  product in December  1998.  During this period,
ECBC's gross profit ratio was 28%.

      The primary  components of selling,  general and  administrative  expenses
during this period were:

                  Salaries and Contract Labo     $432,997
                  Travel and Marketing           $ 42,991
                  Organization Expenses          $146,683

Year Ending December 31, 1999

    ECBC did not  begin  shipping  product  until  December  1998.  As a result,
comparisons  cannot be made  between  operations  for fiscal  1999 and the prior
period.

      During the year ended  December 31, 1999 ECBC had losses of  $(5,260,293).
During the year ECBC's  gross  profit  margin of 26.9% was  significantly  below
anticipated  levels due to costs  associated  with start up expenses and initial
inefficiencies in production, product mixing and purchasing.

      Promotion and advertising costs during the year were unfavorably  impacted
by product  introduction  costs,  slotting fees for product  placement in retail
stores and higher (relative to sales volumes) first year marketing programs. The
high level of professional and consulting expenses during the year is the result
of business development and ECBC's first full year of operations.

      During the  latter  part of 1999 ECBC  began to bring its  expenses  under
control and  management  is  continuing  its efforts to lower  product costs and
operating expenses.

Liquidity and Sources of Capital

      ECBC's operations used $1,250,185 in cash during the period ended December
31, 1998.  ECBC funded its  operating  losses during this period with loans from
John Calebrese, ECBC's Chief Executive Officer.

      During  the  year  ended   December  31,  1999  ECBC's   operations   used
approximately  $4,500,000 in cash and ECBC spent  approximately  $777,000 on the
purchase of equipment. Cash required during the year was generated through sales
of ECBC's common and preferred  stock and borrowings from ECBC's Chief Executive
Officer and third parties.

      ECBC  believes  that  additional  capital will be needed to expand  ECBC's
operations  and to finance  ECBC's  growth.  ECBC  expects to obtain  additional
capital  through the private sale of ECBC's common stock or from borrowings from
private lenders and/or financial institutions.

<PAGE>


      There can be no assurance  that ECBC will be  successful  in obtaining any
additional capital which may be needed.

    ECBC may  suffer  future  losses,  in which  case  ECBC  will need to obtain
additional sources of capital in order to continue  operations.  There can be no
assurance,  however,  that  ECBC  will be  successful  in  obtaining  additional
funding.

ITEM 7.  FINANCIAL STATEMENTS

         See the Financial Statements included with this Report.

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

         Not applicable.

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

         The  directors  of the Company  serve in such  capacity  until the next
annual meeting of the Company's  shareholders  and until their  successors  have
been duly  elected and  qualified.  The  officers  of the  Company  serve at the
discretion of the Company's directors.

      The following sets forth certain information  concerning the management of
ECBC:

Name                    Age           Position with Company

John Calebrese           47           Chief Executive Officer and a Director

Alex Garabedian          46           President

Edward Shanahan          47           Vice President - Eastern Division

John Daumeyer            59           Vice President - Central Division

William Perry Maxwell    59           Vice President - Western Division

Robert Gardener          52           Chief Financial Officer

Drew Carver              53           Vice President -Business Development

Edith G. Osman           50           Director

      John  Calebrese has been an officer and director of ECBC since March 1998.
From  1993 to 1995 Mr.  Calebrese  was a broker  for  Arizona  Beverage  Company
(Arizona Iced Tea) in the Florida market. From 1980 to 1992 Mr. Calebrese was an

<PAGE>

officer of A & C Italian Bakery, a large Italian wholesale bakery which was sold
to  Ferrara's  of New York in 1990.  From  1981 to 1984 Mr.  Calebrese  opened a
number of  deli/restaurants  which were purchased by Subway in 1984. During this
period  of  time  Mr.   Calebrese   also   developed   the  concept  for  ECBC's
ready-to-drink iced coffee beverages.  From 1990 to 1993 Mr. Calebrese developed
and  marketed an iced coffee  beverage  which was  acquired in 1993 by Lewis and
Clark Snake River.

      Alex  Garabedian  has been the President of ECBC since October 1998.  From
1968 to 1997 Mr.  Garabedian was President and Chief  Executive  Officer of Fine
Distributing,   a  subsidiary  of  Hagameyer,   a  large   multi-national   food
distributor.

      Edward  Shanahan  has been an officer and  director of ECBC since  October
1998.  From  1993 to 1994 Mr.  Shanahan  served as Vice  President  of Sales and
Marketing for  Westmark,  Inc./Clearly  Canadian  where he was  responsible  for
product  distribution  in seven  states.  While at  Westmark,  Mr.  Shanahan was
responsible for sales, pricing, packaging, distribution, brand management, media
advertising and key account  development.  From 1976 to 1993 Mr. Shanahan worked
for Coca-Cola Enterprises, Inc. in various capacities.

      John Daumeyer has been an officer of ECBC since October 1998. From 1995 to
1997 Mr. Dauymeyer was Vice President of Geyser Bottled Water Company. From 1993
to 1995 Mr. Dauymeyer was Vice President of Sales,  Western Division for Arizona
Iced Tea.  In the late  1960's Mr.  Dauymeyer  was a  co-founder  of Wendy's Old
Fashioned  Hamburger  Restaurants and served as President and General Manager of
Wendy's.

      William Perry Maxwell has been an officer of ECBC since 1998. From 1991 to
1993 Mr. Maxwell was Vice President of Sales for the William Hoelskin company, a
food broker.  From 1993 to 1998 Mr.  Maxwell was Vice  President for the Arizona
Beverage Company where he was responsible for developing  Arizona's  distributor
network.

     Drew Carver has been an officer of ECBC since  October  1998.  From 1990 to
1993 Mr.  Carver was National  Sales  Manager for Arizona Iced Tea. From 1993 to
1998 Mr.  Carver  was  employed  by the  Geyser  Bottled  Water  Company as Vice
President of Sales.

         Robert  Gardener has been an officer of ECBC since January  2000.  From
1984 to 1999 Mr. Gardner operated his own Certified Public  Accounting  practice
which   concentrated  on  food   distributors   servicing  major  chain  stores,
restaurants  and airlines.  From 1976 to 1984 Mr. Gardner worked as a controller
for Kenyon and Eckhardt,  a large  advertising firm, and as a Vice President for
SFWPRI, and international magazine distribution company.

     Edith G. Osman has been a director of ECBC since  January  2000.  Ms. Osman
has been a practicing  attorney since 1984. Ms. Osman is presently a shareholder
of the law firm of  Carlton  Fields in  Miami,  Florida.  Ms.  Osman is also the
current president of the Florida Bar Association (president-elect 1998-1999) and
was a member of the Florida Bar Association's Board of Governors during 1998.

     All of ECBC's  officers  devote  substantially  all of their time on ECBC's
business.  Ms. Osman,  as a director,  devotes only a minimal  amount of time to
ECBC.

<PAGE>


Change in Management

         In September 1999, and in connection with the acquisition of East Coast
Beverage Corp.,  George  Pursglove,  Chet Howard,  Douglas Maclellan and William
Solfisburg resigned as officers and directors and were replaced with the present
management of ECBC.

ITEM 10.  EXECUTIVE COMPENSATION

         The  following  table  sets  forth in  summary  form  the  compensation
received  by (i) the  Chief  Executive  Officer  of ECBC and (ii) by each  other
executive  officer of ECBC who received in excess of $100,000  during the fiscal
year ended December 31, 1999.

                                                   Other       Re-
                                                   Annual   stricted
                                                  Compen-     Stock    Options
      Name and      Fiscal    Salary   Bonus        sation  Awards     Granted
Principal Position    Year       (1)      (2)         (3)      (4)         (5)

John Calebrese,     1999    $250,000       --         --        --         --
Chief Executive     1998    $125,000       --         --        --         --
Officer

Alex Garabedian,    1999    $125,000       --         --        --         --
President           1998     $62,500       --         --      $325         --

Edward Shanahan     1999    $125,000  $13,000     $6,000        --         --
Vice President      1998   $  25,000       --         --      $195         --

(1) The dollar value of base salary (cash and non-cash) received.

(2) The dollar value of bonus (cash and non-cash) received.

(3) Any other annual  compensation not properly  categorized as salary or bonus,
    including  perquisites and other personal benefits,  securities or property.
    Amounts in the table represent car allowances.

(4) During the year ending  December 31, 1999, the value of the shares of ECBC's
    common stock issued as compensation for services.

(5)  The shares of common  stock to be received  upon the  exercise of all stock
     options granted during the year ending December 31, 1999.

      The table below shows the number of shares of ECBC's common stock owned by
the officers listed above, and the value of such shares as of December 31, 1999.
Since there is presently no market for ECBC's common stock,  the shares owned by
such persons at December 31, 1999 were valued at $2.75 per share, which is equal
to the price at which ECBC was  selling  shares of its  common  stock to private
investors during December 1999.


<PAGE>


        Name                  Shares            Value

        John Calebrese     1,503,831        $4,135,535
        Alex Garabedian      325,000           893,750
        Edward Shanahan      195,000           536,250

      (1)  Subsequent  to December 31, 1999 Mr.  Calebrese  acquired  additional
shares of the Company's  common stock and transferred  shares of common stock to
various persons. See Item 12 of this report.

Long Term Incentive Plans - Awards in Last Fiscal Year

      None

Employee Pension, Profit Sharing or Other Retirement Plans

      Except as  provided in ECBC's  employment  agreements  with its  executive
officers, ECBC does not have a defined benefit,  pension plan, profit sharing or
other retirement plan,  although ECBC may adopt one or more of such plans in the
future.

Compensation of Directors

      Standard  Arrangements.  At present  ECBC does not pay its  directors  for
attending  meetings of the Board of Directors,  although ECBC expects to adopt a
director  compensation  policy in the future.  ECBC has no standard  arrangement
pursuant to which directors of ECBC are compensated for any services provided as
a director or for committee participation or special assignments.

      Except as  disclosed  elsewhere  in this  prospectus  no  director of ECBC
received any form of  compensation  from ECBC during the year ended December 31,
1999.

Employment Contracts ECBC has employment agreements with the following officers:

                Expiration of
                 Employment
Name             Agreement                   Compensation

John Calebrese ..   1-27-02   Annual salary of $200,000, monthly car allowance
                               of $600, monthly  medical insurance reimbursement
                               of $1,200, and options to purchase 500,000 shares
                               of ECBC's  common  stock at a price of $2.75  per
                               share at any time prior to January 2005.  Mr. ...
                               Calebrese  will be entitled to a bonus equal to
                               35% of his annual  salary in the event ECBC has
                               sales  (net  of  returns  and allowances) of at
                               least $30,000,000   during 2000, $65,000,000
                               during 2001, and $125,000,000 during 2002

<PAGE>

Alex Garabedian .  1-27-02    Annual salary of $155,000 monthly car allowance
                              of $1,150, monthly medical insurance reimbursement
                              of $1,200 and 325,000  shares of ECBC's common
                             stock.  Mr. Garabedin will be entitled to a bonus
                             equal to 35% of his  annual  salary in the event
                             ECBC has sales (net of returns and allowances) of
                             at least $30,000,000 during 2000, $65,000,000
                             during 2001, and $125,000,000  during 2002

Edward Shanahan   10-26-00   Annual salary of $125,000,
                             a monthly car  allowance of $500, a one time
                             signing bonus of $10,000, and 195,000 shares
                             of ECBC's common stock.

John Daumeyer    10-19-00    Annual salary of $95,000,
                             a monthly car  allowance of $500, a one time
                             signing bonus of $7,500,  and 130,000 shares
                             of ECBC's common stock.

William Perry
  Maxwel         10-31-00     Annual  salary  of
                              $85,000,  a monthly car allowance of $500, a
                              one  time  signing  bonus  of  $7,500,   and
                               130,000 shares of ECBC's common stock.

Drew Carver      10-10-00     Annual salary of $95,000,  a
                              monthly car  allowance  of $500,  a one time
                              signing bonus of $10,000, and 130,000 shares
                              of ECBC's common stock.

Stock Options

      The following tables set forth information  concerning the options granted
during the fiscal year ended December, 1999, to the persons named below, and the
fiscal  year-end value of all unexercised  options  (regardless of when granted)
held by these persons.

Options Granted

ECBC did not grant any options to any officer or director  during the year ended
December 31, 1999.  Subsequent to December 31, 1999 ECBC granted John  Calebrese
options to purchase  500,000 shares of common stock.  These options were granted
pursuant to ECBC's  Non-Qualified  Stock  Option Plan and are  exercisable  at a
price of $2.75 per share at any time prior to January 2005.



<PAGE>



Stock Option and Bonus Plans

      ECBC has an Incentive Stock Option Plan, a Non-Qualified Stock Option Plan
and a Stock Bonus Plan.  A summary  description  of each Plan  follows.  In some
cases these three Plans are collectively referred to as the "Plans".

Incentive Stock Option Plan.

      The  Incentive  Stock  Option Plan  authorizes  the issuance of options to
purchase up to 500,000 shares of ECBC's common stock. The Incentive Stock Option
Plan will remain in effect until January 10, 2010 unless  terminated  earlier by
action of the Board.  Only officers,  directors and key employees of ECBC may be
granted options pursuant to the Incentive Stock Option Plan.

      In order to  qualify  for  incentive  stock  option  treatment  under  the
Internal Revenue Code, the following requirements must be complied with:

      1. Options granted pursuant to the Plan must be exercised no later than:

            (a) The  expiration  of thirty  (30) days after the date on which an
option holder's employment by ECBC is terminated.

            (b) The  expiration  of one year  after  the date on which an option
holder's  employment by ECBC is  terminated,  if such  termination is due to the
Employee's disability or death.

      2. In the event of an option  holder's  death while in the employ of ECBC,
his legatees or distributees may exercise (prior to the option's expiration) the
option as to any of the shares not previously exercised.

      3. The total fair market value of the shares of common  stock  (determined
at the time of the grant of the  option) for which any  employee  may be granted
options  which  are  first  exercisable  in any  calendar  year  may not  exceed
$100,000.

      4.  Options  may not be  exercised  until one year  following  the date of
grant. Options granted to an employee then owning more than 10% of the of ECBC's
common stock may not be  exercisable by its terms after five years from the date
of grant.

      5. The  purchase  price  per share of common  stock  purchasable  under an
option is  determined  by the  Committee but cannot be less than the fair market
value of ECBC's  common stock on the date of the grant of the option (or 110% of
the  fair  market  value  in the  case of a person  owning  ECBC's  stock  which
represents  more than 10% of the total  combined  voting power of all classes of
stock).



<PAGE>


Non-Qualified Stock Option Plan.

      The Non-Qualified  Stock Option Plan authorizes the issuance of options to
purchase up to 1,500,000 shares of ECBC's common stock. The Non-Qualified  Stock
Option Plan became effective on January 10, 2000. ECBC's  employees,  directors,
officers,  consultants and advisors are eligible to be granted options  pursuant
to the Plan,  provided  however that bona fide services must be rendered by such
consultants  or advisors and such services  must not be in  connection  with the
offer  or  sale of  securities  in a  capital-raising  transaction.  The  option
exercise price is determined by the Committee but cannot be less than the market
price of ECBC's common stock on the date the option is granted.

      Options granted  pursuant to the Plan not previously  exercised  terminate
upon the first to occur of the following dates:

            (a) The  expiration  of one year  after  the date on which an option
holder's  employment  by ECBC is  terminated  (whether  termination  is by ECBC,
disability or death); or

            (b) The  expiration  of the option  which occurs five (5) years from
the date the option was granted.

      In the event of an option  holder's death while in the employ of ECBC, his
legatees or  distributees  may  exercise  the option as to any of the shares not
previously exercised prior to the option's expiration.

Stock Bonus Plan.

      Up to 250,000  shares of common stock may be granted under the Stock Bonus
Plan.  Such shares may consist,  in whole or in part, of authorized but unissued
shares,  or  treasury  shares.  Under the Stock Bonus  Plan,  ECBC's  employees,
directors, officers, consultants and advisors are eligible to receive a grant of
ECBC's shares;  provided,  however,  that bona fide services must be rendered by
consultants  or advisors and such services  must not be in  connection  with the
offer or sale of securities in a capital-raising transaction.

Other Information Regarding the Plans.

      The Plans are  administered  by ECBC's  Board of  Directors.  The Board of
Directors  has the  authority  to  interpret  the  provisions  of the  Plans and
supervise the  administration of the Plans. In addition,  the Board of Directors
is  empowered  to select  those  persons  to whom  shares or  options  are to be
granted,  to  determine  the  number of shares  subject to each grant of a stock
bonus or an option and to determine  when, and upon what  conditions,  shares or
options  granted under the Plans will vest or otherwise be subject to forfeiture
and cancellation.

      In the discretion of the Board of Directors,  any option granted  pursuant
to the Plans may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also  accelerate  the date upon which any option (or any part of any options) is
first  exercisable.  Any shares issued  pursuant to the Stock Bonus Plan and any
options granted pursuant to the Incentive Stock Option Plan or the Non-Qualified
Stock Option Plan will be forfeited if the "vesting" schedule established by the

<PAGE>

Board of  Directors  at the time of the  grant  is not  met.  For this  purpose,
vesting  means the period  during which the employee  must remain an employee of
ECBC or the period of time a non-employee  must provide services to ECBC. At the
time an employee  ceases working for ECBC (or at the time a non-employee  ceases
to perform  services  for ECBC),  any shares or options not fully vested will be
forfeited and cancelled. In the discretion of the Board of Directors payment for
the shares of  underlying  options may be paid through the delivery of shares of
ECBC's  common stock  having an aggregate  fair market value equal to the option
price,  provided  such shares have been owned by the option  holder for at least
one year  prior to such  exercise.  A  combination  of cash and shares of common
stock may also be permitted at the discretion of the Board of Directors.

      Options  are  generally  non-transferable  except upon death of the option
holder.  Shares  issued  pursuant to the Stock Bonus Plan will  generally not be
transferable  until the  person  receiving  the  shares  satisfies  the  vesting
requirements imposed by the Board of Directors when the shares were issued.

      The Board of  Directors  of ECBC may at any  time,  and from time to time,
amend,  terminate,  or  suspend  one or more of the Plans in any manner it deems
appropriate,  provided that such  amendment,  termination  or suspension  cannot
adversely  affect  rights or  obligations  with  respect  to  shares or  options
previously  granted.  The  Board  of  Directors  may  not,  without  shareholder
approval:  make any  amendment  which would  materially  modify the  eligibility
requirements  for the Plans;  increase or decrease the total number of shares of
common  stock which may be issued  pursuant to the Plans except in the case of a
reclassification  of ECBC's capital stock or a consolidation  or merger of ECBC;
reduce  the  minimum  option  price per share;  extend  the period for  granting
options;  or  materially  increase  in any other way the  benefits  accruing  to
employees who are eligible to participate in the Plans.

      The Plans are not qualified  under Section 401(a) of the Internal  Revenue
Code, nor are they subject to any provisions of the Employee  Retirement  Income
Security Act of 1974.

Summary.

      The  following  sets  forth  certain  information  as of March  31,  2000,
concerning  the stock  options and stock  bonuses  granted by ECBC.  Each option
represents the right to purchase one share of ECBC's common stock.

                           Total        Shares                  Remaining
                           Shares    Reserved for   Shares       Options/
                          Reserved   Outstanding   Issued As      Shares
Name of Plan             Under Plan    Options    Stock Bonus   Under Plan

Incentive Stock
  Option Plan              500,000          --         N/A        500,000
Non-Qualified Stock
  Option Plan            1,500,000     500,000         N/A      1,000,000
Stock Bonus Plan           250,000         N/A          --        250,000



<PAGE>


Other Options

    ECBC has granted  options to purchase  shares of ECBC's  common stock to the
persons below.  These options were not granted  pursuant to ECBC's  Incentive or
Non-Qualified stock option plans.

                     Shares Issuable         Option
                     Upon Exercise          Exercise       Expiration
Name                    of Options           Price          of Option

Arnold Rosen             100,000              $2.00        10/30/2000
Arnold Rosen              12,500              $3.50         1/03/2002
Other third parties       40,000              $3.50         1/03/2002

     Mr. Rosen  received  these options for extending  loans of $200,000 to ECBC
and for converting a $250,000 loan into shares of ECBC's common stock. Mr. Rosen
and persons  affiliated with Mr. Rosen presently own approximately 11% of ECBC's
common stock. See Item 12 of this report.

    In the near future ECBC plans to grant other options for the purchase of not
less than 500,000 shares of common stock to certain executive officers, with the
exception of John Calebrese.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following  table sets forth,  as of March 31, 2000,  information  with
respect to the only persons owning  beneficially  5% or more of the  outstanding
common stock and the number and percentage of  outstanding  shares owned by each
director  and officer  and by the  officers  and  directors  as a group.  Unless
otherwise  indicated,  each owner has sole voting and investment powers over his
shares of common stock.

Name and Address                Share Ownership      Percent of Class

John Calebrese                   1,832,972 (1)            23.9%
1750 University Drive
Suite 117
Coral Springs, Florida 33071

Alex Garabedian                    325,000                 4.2%
1750 University Drive
Suite 117
Coral Springs, FL  33071

Edward Shanahan                    195,000                 2.5%
78 Harrington Ridge Road
Sherborn, MA 01770



<PAGE>


                                   Shares of
Name and Address                Common Stock         Percent of Class

John Daumeyer                      130,000                 1.7%
8621 Brookridge Dr.
West Chester, OH 45069

William Perry Maxwell              130,000                 1.7%
2679 Corey Place
San Ramon, CA 94583

Drew Carver                        130,000                 1.7%
3852 E. Keresan
Phoenix, AZ 85044

Robert Gardener                         --                   --
1750 University Drive
Suite 117
Coral Springs, FL  33071

Edith G Osman                       22,556                   --
808 Brickle Key Blvd., #2301
Miami, FL  33131

Arnold Rosen                     1,080,940 (2)            14.1%
7138 Ayrshire Lane
Boca Raton, FL 33496

FPI, Inc.                          816,941                10.7%
Mizner Park Corporate Center
433 Plaza Real, Suite 275
Boca Raton, FL 33445

Genco Overseas Ventures Limited    428,812 (3)             5.6%
1500 Northwest 65th Ave.
Plantation, FL 33313

Acion Investments, Limited         428,812 (3)             5.6%
1500 Northwest 65th Ave.
Plantation, FL 33313

All Officers and Directors       2,765,528                35.8%
  as a Group (8 persons)

(1)  Excludes  500,000 shares  issuable upon the exercise of options held by Mr.
     Calebrese. The options are exercisable at a price of $2.75 per share at any
     time prior to January 2005.

<PAGE>

(2)  Includes shares held by Mr. Rosen,  Mr. Rosen's wife, and their  respective
     IRA accounts.
(3)  Jack Namer is the controlling  person of this  shareholder and is therefore
     the beneficial owner of the shares held of record by this shareholder.

      The percentage  ownership for each  shareholder in the foregoing table has
been computed  without  including  any shares  issuable upon the exercise of any
options.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      ECBC has issued shares of its to the persons, in the amounts,  and for the
consideration  set forth in the following  table. The amounts have been adjusted
to reflect the shares issued to the former  shareholders  of East Coast Beverage
Corp.  in connection  with the August 1999  acquisition  of East Coast  Beverage
Corp. and the 8.194595 for - one reverse split approved by the  shareholders  of
ECBC on February 22, 2000:

                                  Number                               Note
Name                    Date    of Shares       Consideration        Reference

John Calebrese        3/01/98   2,411,454       Services rendered        A
Alex Garabedian       9/10/98     325,000       Services rendered        B
Edward Shanahan      10/26/98     195,000       Services rendered        B
John Daumeyer        10/19/98     130,000       Services rendered        B
William Perry
    Maxwell          11/02/98     130,000       Services rendered        B
Drew Carver          10/10/98     130,000       Services rendered        B
FPI, Inc              1/29/99     700,000       Services rendered
Arnold Rosen          8/01/99      66,666       Services rendered        C
Arnold Rosen         08/31/99     250,000       Modification of
                                                   loan terms            C
Arnold Rosen         09/01/99      34,000       Consulting services      C
Arnold Rosen         10/20/99      15,000       Extension of maturity
                                                   of loan               C
John Calebrese        1/10/00     694,973       Payment of loan          D
Raygard Enterprises   1/10/00     190,000       Conversion of loan       E
Arnold Rosen          1/11/00     126,192       Conversion of loan       C

    A.  Subsequent to March 1, 1998 Mr.  Calebrese  sold 428,812 shares to Genco
Overseas  Ventures  Limited and 428,812  shares to Aicon  Investments,  Limited.
Subsequent to March 1, 1998 Mr.  Calebrese also assigned shares of ECBC's common
stock to FPI,  Inc.,  Arnold  Rosen  and other  third  parties.  See  "Principal
Shareholders".

    B. Shares were issued as part of the compensation provided in the employment
agreement with this person.

    C. Between March and May 1999 East Coast Beverage Corp. sold 1,000 shares of
its Series A preferred stock to a group of private investors for $1,000,000. All
Series A preferred shares were subsequently  converted into shares of the common
stock of East Coast  Beverage Corp. In connection  with the  acquisition of East

<PAGE>

Coast Beverage Corp. the former Series A preferred shareholders received 751,879
shares of ECBC's  common  stock.  Arnold Rosen,  a principal  shareholder  and a
consultant to ECBC,  together with his wife and their  respective  IRA accounts,
purchased 520 of the Series A preferred shares.

      Between May and August 1999 ECBC borrowed  $1,000,000 from Mr. Rosen.  The
loan from Mr. Rosen enabled ECBC to fund a level of operations  associated  with
increased  orders.  The loans are  represented by a series of convertible  notes
(the  "Notes")  which bear  interest at 12% per annum and are due and payable in
April 2000. The Notes originally provided Mr. Rosen with certain rights (i) with
respect  to  payment if ECBC was sold,  (ii)  conversion  of the notes into ECBC
stock,  and (iii) under  certain  circumstances,  to a percentage  of ECBC's net
income.

      In exchange for 250,000 shares of ECBC's common stock,  ECBC and Mr. Rosen
agreed to the following modifications to the terms of the Notes:

o    ECBC would  repay Mr.  Rosen  $400,000,  plus  accrued  interest,  prior to
     September 30, 1999.

o    An additional  $300,000 plus accrued  interest would be repaid to Mr. Rosen
     prior to October 15, 1999.

o    The remaining $300,000, plus accrued interest would be payable on or before
     April 1, 2000.

o  The rights (i) to receive, under certain circumstances, a percentage interest
   in ECBC's net income;  and (ii) to receive  150% of the unpaid  principal  if
   ECBC was sold, were terminated.

o  The right to convert up to $300,000 of the amount owed to Mr. Rosen into such
   number of shares of ECBC's  common stock as may be determined by dividing the
   amount to be  converted  by $2.75.  On January 11, 2000 Mr.  Rosen  converted
   $250,000 owed to him by ECBC, plus $2,383 in accrued  interest,  into 126,192
   shares of ECBC's common stock.

      On October 20, 1999 ECBC paid Mr.  Rosen  $50,000  toward a $300,000  loan
which was due to be paid by October 15, 1999 and issued Mr. Rosen 15,000  shares
of ECBC's common stock for  extending  the maturity of the  remaining  amount of
this loan until January 15, 2000.

      In September  1999 ECBC issued Mr. Rosen 34,000  shares of common stock in
consideration for consulting services provided to ECBC.

      D. On January 10, 2000 John Calebrese converted  $1,750,000 of advances to
ECBC,  plus accrued  interest of  approximately  $160,000 into 694,973 shares of
ECBC's common stock. The advances were made between March 1998 and October 1999,
were unsecured and bore interest at 10% per year.

      E. On January  10,  2000 ECBC  issued  190,000  shares of common  stock to
Raygard  Enterprises of South Florida,  Inc. in settlement of $400,000 loaned to
ECBC by  Raygard.  The  amount  owed to  Raygard  was due on July 1,  2000,  was
unsecured and bore interest at 15% per year.

<PAGE>

    As of March 31, 2000 ECBC owed approximately $765,000 to John Calebrese. The
funds  borrowed  from  Mr.  Calebrese  were  used by ECBC  for  working  capital
purposes. The loan from Mr. Calebrese bears interest at 10% per annum, is due on
demand and is unsecured.

      In  December  1999 ECBC  entered  into a  distributorship  agreement  with
Raygard  Enterprises  of South  Florida,  Inc.  Raygard  is the owner of 190,000
shares of ECBC's common  stock.  Robert  Gardener,  ECBC's  principal  financial
officer,  together with members of Mr.  Gardener's  family,  are the  beneficial
owners of 50% of Raygard's capital stock. The agreement grants Raygard the right
to distribute the Company's products in Florida,  Europe and South America. ECBC
may not terminate the Distribution Agreement except for "cause". In the event of
the sale of ECBC or the  termination  of the  Distribution  Agreement,  ECBC has
agreed to pay Raygard  $4.00 for each case of product  purchased by Raygard from
ECBC.  At December 31, 1999,  ECBC would owe $540,000 to Raygard in the event of
the sale of ECBC or the termination of the Distribution Agreement.

      On January 25, 1999, ECBC entered into a consulting agreement with F.P.I.,
Inc.,  a  principal  shareholder.  Pursuant to the terms of this  agreement  FPI
provides ECBC with  consulting  services and assistance  with  financial  growth
strategies.  During the year ended  December 31, 1999 ECBC issued 700,000 shares
of  common  stock  to FPI and  paid  FPI  approximately  $438,000  in  cash  for
consulting  services.  During the three month period  ending March 31, 2000 ECBC
has paid FPI approximately  $68,000 in cash for assisting the Company in raising
capital.

      Between September 1999 and April 7, 2000 ECBC sold 1,881,277 shares of its
common stock to a group of private investors at a price of $2.75 per share. ECBC
plans  to  file a  registration  statement  with  the  Securities  and  Exchange
Commission so as to permit the public sale of these shares.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Number         Exhibit                                 Page Number

2.       Share Exchange Agreement between
         USA Service Systems, Inc. and East
         Coast Beverage Corp.                                  (1)

3.1      Articles of Incorporation,                            (1)
                                                      ----------------------
         as restated and amended

3.2      Bylaws                                                (1)
                                                      ----------------------

4.1      Incentive Stock Option Plan                           (1)
                                                      ----------------------

4.2      Non-Qualified Stock Option Plan                       (1)
                                                      ----------------------

4.3      Stock Bonus Plan                                      (1)
                                                      ----------------------
<PAGE>

10       Employment Agreements                                 (1)
                                                      ----------------------

27.      Financial Data Schedule                      ______________________

(1) Incorporated by reference,  and as same exhibit  number,  from the Company's
    registration statement on Form SB-2 (Commission File No. 333-31188).
Reports on Form 8-K

      On November 15, 1999 ECBC filed an amended  report on Form 8-K  disclosing
the  acquisition of East Coast  Beverage Corp.  Included as part of this amended
report were the audited  financial  statements of East Coast  Beverage Corp. and
pro forma financial statements reflecting the acquisition of East Coast Beverage
Corp.

      On December 28, 1999 ECBC filed an amended report on Form 8-K. The amended
report on Form 8-K reflected  certain  changes to the  "Principal  Shareholders"
section of the 8-K report.





<PAGE>



                            EAST COAST BEVERAGE CORP.
                              FINANCIAL STATEMENTS
                                DECEMBER 31, 1999






<PAGE>


C O N T E N T S
                                                                      Page

INDEPENDENT AUDITORS' REPORT                                            1

FINANCIAL STATEMENTS

      Balance Sheet                                                     2

      Statements of Operations                                          3

      Statement of Changes in Deficiency in Assets                      4

      Statements of Cash Flows                                          5

      Notes to Financial Statements                                  6 - 19



<PAGE>



INDEPENDENT AUDITORS' REPORT


Board of Directors
East Coast Beverage Corp.
Coral Springs, Florida


We have audited the  accompanying  balance sheet of East Coast Beverage Corp. as
of December 31,  1999,  and the related  statements  of  operations,  changes in
deficiency  in assets,  and cash flows for the year ended  December 31, 1999 and
for the period from  inception  (March 25,  1998) to 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 amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of East Coast Beverage Corp. as of
December 31, 1999,  and the results of its operations and its cash flows for the
year ended December 31, 1999 and for the period from inception  (March 25, 1998)
to  December  31,  1998  in  conformity  with  generally   accepted   accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  As discussed in Note 2, the Company
has  sustained  substantial  operating  losses  and  negative  cash  flows  from
operations since inception.  In the absence of achieving  profitable  operations
and positive cash flows from  operations or obtaining  additional debt or equity
financing,  the Company may have difficulty meeting current  obligations.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  The financial  statements do not include any  adjustments  that
might result from the outcome of this uncertainty.




                                              KAUFMAN, ROSSIN & CO.

Miami, Florida
March 24, 2000 (Except for Note 2, as to which the date is April 7, 2000)



<PAGE>





EAST COAST BEVERAGE CORP.

BALANCE SHEET
DECEMBER 31, 1999

ASSETS
-------------------------------------------------------------------------------

CURRENT ASSETS
   Cash and equivalents                                            $   115,364
   Accounts receivable (Note 4)                                        109,689
   Inventories (Note 5)                                              2,018,573
   Prepaid mold fee (Note 8)                                           118,866
   Prepaid expenses and other current assets (Note 6)                  154,179
-------------------------------------------------------------------------------
      Total current assets

PROPERTY AND EQUIPMENT (NOTE 7)                                        679,321
-------------------------------------------------------------------------------

   TOTAL ASSETS                                                    $ 3,195,992
-------------------------------------------------------------------------------

LIABILITIES AND DEFICIENCY IN ASSETS
-------------------------------------------------------------------------------

CURRENT LIABILITIES
   Accounts payable                                                $ 1,790,668
   Accrued interest payable                                            164,580
   Notes payable - current portion (Note 12)                           525,000
   Due to stockholder - current portion (Note 9)                       765,516
-------------------------------------------------------------------------------
      Total current liabilities
------------------------------------------------------------------------------

LONG-TERM DEBT
   Notes payable (Note 12)                                             650,000
   Due to stockholders (Note 9)                                      1,750,000
-------------------------------------------------------------------------------
      Total long-term debt
-------------------------------------------------------------------------------

DEFICIENCY IN ASSETS (NOTE 11)                                    (  2,449,772)
-------------------------------------------------------------------------------

   TOTAL LIABILITIES AND DEFICIENCY IN ASSETS                       $ 3,195,992
------------------------------------------------------------------------------

                            See accompanying notes.

<PAGE>


EAST COAST BEVERAGE CORP.
------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
THE PERIOD FROM INCEPTION (MARCH 25, 1998) TO DECEMBER 31, 1998

                                                       1999            1998
--------------------------------------------------------------------------------

SALES                                            $  4,403,499      $   478,066

COST OF GOODS SOLD                                  3,218,516          344,493
-------------------------------------------------------------------------------

GROSS PROFIT                                        1,184,983          133,573
-------------------------------------------------------------------------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
   Depreciation                                       121,544            1,001
   Freight                                            441,854           24,050
   General and administrative expense               1,703,525          758,210
   Professional fees and consulting                   505,105           46,250
   Promotion and advertising                        2,334,228            2,120
   Selling expenses                                   518,687                -
-----------------------------------------------------------------------------
      Total selling, general and administrative     5,624,943          831,631
-------------------------------------------------------------------------------

LOSS FROM OPERATIONS                             (  4,439,960)      (  698,058)

INTEREST EXPENSE AND FINANCING FEES                   820,333           40,259
-----------------------------------------------------------------------------

NET LOSS                                        ($  5,260,293)     ($  738,317)
------------------------------------------------------------------------------

Weighted Average Number of Common Shares
   Outstanding                                      4,385,993        2,361,455
-------------------------------------------------------------------------------

Net loss per share                                ($    1.21)     ($      0.31)
-------------------------------------------------------------------------------


                            See accompanying notes.

<PAGE>



EAST COAST BEVERAGE CORP.
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN DEFICIENCY IN ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD FROM INCEPTION
(MARCH 25, 1998) TODECEMBER 31, 1998
-------------------------------------------------------------------------------
<TABLE>
<S>                                     <C>         <C>         <C>        <C>           <C>       <C>        <C>
                                        Preferred Stock,        Common Stock,
                                       $0.0001 Par Value;     $0.0001 Par Value;
                                        5,000,000 Shares          25,000,000
Description                                Authorized         Shares Authorized      Additional
                                     ------------------------------------------       Paid-In
                                       Shares     Amount      Shares    Par Value     Capital    Deficit      Total
------------------------------------------------------------------------------------------------------------------------

Issuance of stock, net of stock
  returned                                  -     $   -       2,361,455  $  236     $   264     $     -     $   500

Net loss - period ended December 31,
  1998                                      -         -           -           -           -     (738,317) ( 738,317)
------------------------------------------------------------------------------------------------------------------------

Balance - December 31, 1998                 -         -       2,361,455     236         264     (738,317) ( 737,817)

Issuance of common stock related to
  employment agreements, net of
  stock returned                            -         -         910,000      91          49           -         140

Issuance of common stock for
  consulting services, net of
  stock returned                            -         -         800,666      80     197,086           -     197,166

Issuance of preferred stock for cash    1,000      0.10               -       -   1,000,000           -   1,000,000

Preferred stock offering costs              -         -               -       -   ( 100,000)          -   ( 100,000)

Issuance of common stock for loan
  agreement modification                    -          -     265,000         27     408,584           -     408,611

Issuance of options for loan
  agreement modification                    -          -           -          -      88,192           -      88,192

Conversion of preferred stock into
  common stock                       (  1,000)     (0.10)    751,879         75        ( 75)          -           -

Acquisition of net assets of USA
  Services Systems, Inc.                    -          -     372,599         37   ( 200,037)          -    (200,000)

Issuance of common stock under
  Private Placement                         -          -     887,376         89   2,440,195           -    2,440,284

Private placement offering costs            -          -           -          -   ( 244,388)          -   ( 244,388)

Dividends on preferred stock                -                      -          -           -   (  41,667)  (  41,667)

Net loss - year ended December 31,
  1999                                      -          -           -          -           -  (5,260,293) (5,260,293)
------------------------------------------------------------------------------------------------------------------------


Balance - December 31, 1999                 -     $    -   6,348,975    $   635   $3,589,870 ($6,040,277)($2,449,772)
------------------------------------------------------------------------------------------------------------------------

</TABLE>

                             See accompanying notes.

<PAGE>





EAST COAST BEVERAGE CORP.
------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
THE PERIOD FROM INCEPTION (MARCH 25, 1998) TO DECEMBER 31, 1998

                                                        1999             1998
------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net
   loss                                            ($ 5,260,293)   ($ 738,317)
   Adjustments to reconcile net loss to net
 cash used in operating activities:
     Depreciation                                       121,544         1,001
     Provision for bad debts                             12,187             -
     Stock issued for modification of loans             496,803             -
     Stock issued for professional services             197,306             -
     Changes in assets and liabilities:
        Accounts receivable                             215,262    (  337,138)
        Inventory                                    (  807,487)   (1,211,086)
        Prepaid assets                               (   85,261)   (  141,882)
        Other assets                                     23,111    (   25,713)
        Accounts payable and accrued expenses           552,298     1,202,950
-------------------------------------------------------------------------------
          Total adjustments                             725,763    (  511,868)
-------------------------------------------------------------------------------
          Net cash used in operating activities      (4,534,530)   (1,250,185)
------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Loans to employee                                 (   33,300)   (   10,000)
   Purchases of property and equipment               (  777,247)   (   24,619)
-------------------------------------------------------------------------------
          Net cash used in investing activities      (  810,547)   (   34,619)
-------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net change in bank overdraft                      (   55,913)       55,913
   Net borrowings from stockholders                    1,284,640    1,230,876
   Net borrowings from related parties                 1,260,000            -
   Net proceeds from issuance of preferred stock         900,000            -
   Net proceeds from issuance of common stock          2,195,896          500
   Dividends paid                                    (    41,667)
   Loan acquisition costs                            (    85,000)
------------------------------------------------------------------------------
          Net cash provided by financing activities    5,457,956     1,287,289
-------------------------------------------------------------------------------

NET INCREASE IN CASH AND EQUIVALENTS                     112,879         2,485

CASH AND EQUIVALENTS - BEGINNING                           2,485             -
--------------------------------------------------------------------------------

CASH AND EQUIVALENTS - ENDING                        $   115,364     $   2,485
------------------------------------------------------------------------------

Supplemental Disclosures:
-------------------------------------------------------------------------------

   Interest paid                                      $  125,079     $  18,416
------------------------------------------------------------------------------


                             See accompanying notes.

<PAGE>



EAST COAST BEVERAGE CORP.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-------------------------------------------------------------------------------

            Business Description and Activity

            East Coast Beverage Corp.  (the Company) was  incorporated  on March
            25,  1998,  under the laws of the  State of  Florida  and  effective
            August 31,  1999,  became a public  reporting  Colorado  Corporation
            through a reverse  acquisition  of a public shell  corporation.  The
            Company's  business  activity  includes  developing,  producing  and
            distributing  Coffee  House  USA(TM),  a  proprietary  line  of  all
            natural,  ready to drink,  bottled coffee  drinks.  In late 1998 the
            Company began production and distribution of its products throughout
            the continental United States, Hawaii and Guam.

            The Company uses  third-party  manufacturers to produce its products
            and  for  the  year  ended  December  31,  1999,  two  manufacturers
            accounted for 100% of the Company's production of finished goods.

            All  historical  common stock data in the financial  statements  and
            notes to financial  statements  has been adjusted to give effect for
            i) a March 24,  1999,  25,000  for 1  forward  stock  split,  ii) an
            exchange  allocation of 8.194595 for 1 upon the reverse  acquisition
            discussed below, and iii) a February 22, 2000 1 for 8.194595 reverse
            stock split.

            Reverse Acquisition

            Effective  August 31, 1999, the Company entered into an Agreement to
            Exchange  Common  Stock with USA  Service  Systems,  Inc.  (USA),  a
            non-operating   public  company.  The  Agreement  provided  for  the
            exchange of 5,040,000  restricted  shares of common stock of USA for
            all of the  issued  and  outstanding  shares  of the  Company.  This
            transaction  was  treated  for  accounting  purposes  as  a  capital
            transaction.  As the  Company  is the  accounting  acquirer  in this
            "Reserve   Acquisition,"   the  financial   statements  of  USA  are
            considered to be a continuation of the Company. Concurrent with this
            merger, USA changed its name to East Coast Beverage Corp.

            Cash and Equivalents

            For purposes of the statement of cash flows,  the Company  considers
            cash  and  highly  liquid   securities   (consisting   primarily  of
            money-market  investments)  with an original  maturity or redemption
            option of three months or less to be cash and equivalents.

            During  1999 the  Company  maintained  cash and  equivalents  with a
            brokerage firm and with a bank.  Brokerage amounts are insured up to
            $500,000  (with a limit of  $100,000  for  cash)  by the  Securities
            Investor  Protection  Corporation while bank deposits are insured by
            the  FDIC up to  $100,000.  The  Company  may,  from  time to  time,
            maintain balances in excess of these insured limits.



<PAGE>


-------------------------------------------------------------------------------
NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
-------------------------------------------------------------------------------


            Concentration of Credit Risk

            Financial instruments that potentially subject the Company to credit
            risk consist  principally of trade  receivables.  Trade  receivables
            terms are  generally  30 days.  The Company  performs  services  and
            extends  credit based on an evaluation of the  customers'  financial
            condition  without  requiring  collateral.  Exposure  to  losses  on
            receivables  is expected to vary by  customer  due to the  financial
            condition of each customer.  The Company monitors exposure to credit
            losses and maintains  allowances for anticipated  losses  considered
            necessary under the circumstances.

            Property and Equipment

            Property and equipment is recorded at cost.  Expenditures  for major
            betterments  and additions are charged to the asset  accounts  while
            replacements, maintenance and repairs which do not improve or extend
            the lives of the respective assets are charged to expense currently.

            Depreciation

            Depreciation  of property  and  equipment  is  determined  utilizing
            straight-line  and  accelerated   methods  at  various  rates  based
            generally on the estimated useful lives of the assets.  The range of
            estimated useful lives is as follows:

               Office furniture and equipment                       5 to 7 years
               Machinery and equipment                              5 to 7 years
               Coolers and display equipment                        3 to 5 years

            Inventories

            Inventories  are  stated at the lower of cost  (first-in,  first-out
            method) or market  (replacement  cost).  All  inventories on hand at
            December  31,  1999  were  held by third  party  storage  facilities
            located in Batavia, New York, Sanger,  California and Richwood,  New
            Jersey.

            Use of Estimates

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

            The  Company  has  recorded  a deferred  tax asset of  approximately
            $1,964,000  at December 31, 1999,  which is  completely  offset by a
            valuation  allowance.  Realization  of the  deferred  tax  asset  is
            dependent on generating sufficient taxable income in the future. The
            amount of the deferred tax asset considered  realizable could change
            in the near term if estimates of future taxable income are modified.



<PAGE>


-------------------------------------------------------------------------------
NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
-------------------------------------------------------------------------------


            Income Taxes

            The Company  accounts  for income taxes under the  liability  method
            according to Statement of Financial  Accounting  Standards  No. 109.
            Deferred tax assets and  liabilities  are  recognized for future tax
            consequences  attributable  to  differences  between  the  financial
            statements  carrying  amounts of existing assets and liabilities and
            their respective tax bases.  Deferred tax assets and liabilities are
            measured using enacted tax rates expected to apply to taxable income
            in the years in which those temporary differences are expected to be
            recovered or settled.

            Through December 31, 1998, the Company had elected, with the consent
            of the stockholders,  to be taxed under S Corporation  provisions of
            the  Internal  Revenue  Code.  Under these  provisions,  the taxable
            income of the  Company is  reflected  by the  stockholders  on their
            personal  income  tax  returns.   Effective   January  1,  1999,  in
            contemplation of issuing preferred stock, the Company terminated its
            S Corporation status.

            Revenue Recognition

            Revenue from product  sales is  recognized by the Company when title
            and risk of loss passes to the  distributor,  which generally occurs
            upon  shipment  from the  manufacturing  facilities  or third  party
            storage facilities.

            Advertising

            Advertising  is  expensed  as  incurred  and is included in selling,
            general and administrative expenses.

            Net Loss Per Share

            The Company applies Statement of Financial  Accounting Standards No.
            128,  "Earnings Per Share" (FAS 128). Net loss per share is computed
            by dividing net loss and preferred stock dividends of $41,667 by the
            weighted  average  number of common  shares  outstanding  during the
            reported periods.  Outstanding stock equivalents were not considered
            in the calculation as their effect would have been anti-dilutive.

            Segment Reporting

            During 1998,  the Company  adopted  Financial  Accounting  Standards
            Board ("FASB")  statement No. 131,  "Disclosure about Segments of an
            Enterprise and Related Information".  The Company has considered its
            operations and has determined that it operates in a single operating
            segment  for  purposes  of  presenting  financial   information  and
            evaluating   performance.   As  such,  the  accompanying   financial
            statements  present  information in a format that is consistent with
            the financial information used by management for internal use.



<PAGE>


-------------------------------------------------------------------------------
NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
------------------------------------------------------------------------------


            Fair Value of Financial Instruments

            The carrying values of cash and equivalents, accounts receivable and
            notes  receivable  approximate  their  fair  values due to the short
            maturity of these instruments.

            The fair  value  of the  notes  payable  and due to  stockholder  is
            determined by calculating the present value of the note by a current
            market rate of interest as compared to the stated rate of  interest.
            The  difference  between fair value and the  carrying  values is not
            deemed to be significant.

            Comprehensive Income

            The items  affecting  comprehensive  income are not  material to the
            financial statements and, accordingly, are not presented herein.

            Reclassifications

            Certain   amounts  in  the  1998  financial   statements  have  been
            reclassified to conform with 1999 presentation.

            Year 2000 Uncertainties

            Although  the Company has not  identified  or incurred  any computer
            system or program  problems,  there is still a  possibility  that at
            some time during the Year 2000 their computer  systems and programs,
            as well as  equipment  that uses  embedded  computer  chips,  may be
            unable to  distinguish  between  the years  1900 and 2000.  This may
            create  system  errors and failures  resulting in the  disruption of
            normal business  operations.  Although it is unlikely,  there may be
            some  third  parties,  such  as  governmental  agencies,  utilities,
            telecommunication companies, vendors and customers that at times may
            not be able to continue  business  with the Company due to their own
            Year 2000 problems.

-------------------------------------------------------------------------------
NOTE 2.    GOING CONCERN
-------------------------------------------------------------------------------

            The  accompanying   financial   statements  have  been  prepared  in
            conformity  with generally  accepted  accounting  principles,  which
            contemplate  continuation  of the  Company as a going  concern.  The
            Company has sustained substantial operating losses and negative cash
            flows from operations since  inception.  In the absence of achieving
            profitable  operations  and positive  cash flows from  operations or
            obtaining additional debt or equity financing,  the Company may have
            difficulty meeting current obligations.

            Subsequent to December 31, 1999,  approximately $2,400,000 due under
            notes payable and due to stockholder,  plus accrued interest thereon
            of  approximately  $213,000 were converted into 1,011,165  shares of
            the Company's common stock. The Company continues to pursue the sale
            of  its  common  stock  through  private  placement   offerings  and
            subsequent to December 31, 1999 through  April 7, 2000,  the Company
            issued  933,901  shares of common  stock for  $2,568,230  less costs
            associated with these issuances of approximately $256,823.


<PAGE>



-------------------------------------------------------------------------------
NOTE 2.     GOING CONCERN (Continued)
-------------------------------------------------------------------------------

            In view of these  matters,  realization  of a major  portion  of the
            assets in the accompanying balance sheet is dependent upon continued
            operations  of the  Company,  which  in turn is  dependent  upon the
            Company's  ability  to meet its  financial  obligations.  Management
            believes  that actions  presently  being taken,  as described in the
            preceding  paragraph,  provide  the  opportunity  for the Company to
            continue as a going concern.

-------------------------------------------------------------------------------
NOTE 3.   MAJOR CUSTOMERS
-------------------------------------------------------------------------------

            Sales to individual  unaffiliated  customers in excess of 10% of net
            sales were as follows:

                                      1999                        1998
                        -------------------------------------------------------
                               Amount     % of Sales      Amount     % of Sales
            -------------------------------------------------------------------

            Customer A       $  552,983        13%      $         -         -%
            Customer B       $  548,578        12%      $         -         -%
            Customer C       $  206,950         5%      $    49,412        10%
            Customer D       $   24,706         1%      $    49,104        10%

            Individual  accounts  receivable  balances at December 31, 1999,  in
            excess of 10% of total accounts receivable were as follows:

                                                                   % of Accounts
                                                                    Receivable,
                                                        Amount          Net
            ------------------------------------------------------------------

            Customer E                                $   24,980          20%
            Customer F                                $   18,651          15%
            Customer G                                $   15,325          13%

------------------------------------------------------------------------------
NOTE 4.           ACCOUNTS RECEIVABLE
-----------------------------------------------------------------------------

            Accounts receivable at December 31, 1999 consisted of the following:

            Trade accounts receivable                                $ 121,876
            Less allowance for doubtful accounts                        12,187
            ------------------------------------------------------------------

                                                                     $ 109,689
            ------------------------------------------------------------------

            During  1999,  the Company  established  an  allowance  for doubtful
            accounts through a charge to earnings of $12,187.



<PAGE>


------------------------------------------------------------------------------
NOTE 4.     ACCOUNTS RECEIVABLE (Continued)
------------------------------------------------------------------------------

            The activity in the allowance for doubtful  accounts during the year
            ended December 31, 1999 was as follows:
                                                                   Allowance for
                                                                      Doubtful
                                                                      Accounts
            -------------------------------------------------------------------

            Balance - December 31, 1998                              $       -
            1999 provision for doubtful accounts                        12,187
            1999 charge-offs                                                 -
            -------------------------------------------------------------------

            Balance - December 31, 1999                              $
            -------------------------------------------------------------------

            On  December  2,  1999,   the  Company   entered  into  a  perpetual
            distribution  agreement with an entity that is both a shareholder of
            the  Company  and is 50%  owned by the CFO of the  Company  (Related
            Distributor). The Related Distributor was appointed as the exclusive
            distributor to certain significant  territories and the Company does
            not have the right to unilaterally  terminate this agreement  absent
            "cause".   Pursuant  to  this  agreement,  an  "initial  order"  for
            approximately $1,328,000 of product was conveyed and invoiced to the
            Related Distributor in 1999, with the following payment terms:

                  February 28, 2000                               $  50,000
                  March 31, 2000                                    150,000
                  April 30, 2000                                    150,000
                  May 31, 2000                                      300,000
                  June 30, 2000                                     300,000
                  July 31, 2000                                     378,000

            Although,  according  to  the  distribution  agreement  all  product
            conveyed to the Related  Distributor is deemed to be property of the
            Related Distributor upon such conveyance,  as the sales terms do not
            comply with the  Company's  normal  polices,  the  Company  does not
            record sales until such  products are shipped from the  manufacturer
            or warehouse to a third-party customer.

            The  Related  Distributor   distribution  agreement  has  additional
            provisions  requiring,  among other things, in the event of the sale
            of the  Company  or  termination  of the  Related  Distributor,  the
            Related Distributor will be reimbursed at a price of $4.00 per case,
            since  inception.  At December 31, 1999,  approximately  $540,000 in
            reimbursements  would be due to the Related Distributor in the event
            of  the  sale  of  the  Company  or   termination   of  the  Related
            Distributor.

            As  of  December  31,  1999,   conveyances  of  $0  to  the  Related
            Distributor were recorded as sales and approximately $994,000 (cost)
            of product  conveyed  and  invoiced is included in  inventory  as it
            remained  in  the  custody  of  the   manufacturer   or  third-party
            warehouses.

            In addition,  in  connection  with this  agreement  the Company paid
            approximately  $28,000 in  commissions  and  consulting  fees to the
            Related Distributor.

<PAGE>


----------------------------------------------------------------------------
NOTE 5.           INVENTORIES
----------------------------------------------------------------------------
            Inventories at December 31, 1999 consisted of the following:

            Finished goods (invoiced to, and held
               on behalf of the Related Distributor)                 $ 994,187
            Raw materials                                            1,024,386
            -------------------------------------------------------------------

                                                                     $
            ------------------------------------------------------------------

-------------------------------------------------------------------------------
NOTE 6.           PREPAID EXPENSES AND OTHER CURRENT ASSETS
-------------------------------------------------------------------------------

            Prepaid expenses and other current assets consisted of the following
            at December 31, 1999:

            Employee advances                                       $    43,300
            Deposits                                                      2,602
            Prepaid consulting fees                                     108,277
            -------------------------------------------------------------------

                                                                    $
            -------------------------------------------------------------------


-----------------------------------------------------------------------------
NOTE 7.       PROPERTY AND EQUIPMENT
-----------------------------------------------------------------------------

            Property  and  equipment  at  December  31,  1999  consisted  of the
following:

            Office furniture and equipment                          $    11,462
            Machinery and equipment                                      18,700
            Coolers and display equipment                               771,704
            -------------------------------------------------------------------
                                                                        801,866
            Less: accumulated depreciation                         (    122,545)
            -------------------------------------------------------------------

                                                                    $
            -------------------------------------------------------------------

Depreciation  expense  amounted  to  $121,544  and  $1,001  in  1999  and  1998,
respectively.


-----------------------------------------------------------------------------
NOTE 8.           PREPAID MOLD FEE
-----------------------------------------------------------------------------

            The Company entered into an agreement with a manufacturer, whereby a
            $150,000  mold  fee  was  required  in  order  to  set  up  for  the
            manufacture of bottles.  The manufacturer will credit up to the full
            amount of the fee at a rate of $0.40 per gross  (144) on all bottles
            manufactured  for and  accepted by the  Company  within a three year
            period.  The Company  received credits of $23,016 and $8,118 related
            to this agreement  during 1999 and 1998,  respectively.  The Company
            believes  that its  production  in 2000 will be  sufficient  to earn
            credit for the remaining prepaid mold fee amount.


<PAGE>


-----------------------------------------------------------------------------
NOTE 9.           DUE TO STOCKHOLDER
-----------------------------------------------------------------------------

            At December 31, 1999,  the Company had an unsecured  loan payable to
            the Chief Executive  Officer (CEO) in the amount of $2,515,516.  The
            loan bears interest at 10% per annum, with principal and all accrued
            interest due on demand.  Interest  expense in  connection  with this
            note  amounted  to  $181,007  during  1999.  On  January  10,  2000,
            $1,750,000 of this amount,  plus accrued  interest of  approximately
            $160,000 was  converted  into 694,973  shares of common stock of the
            Company.

-----------------------------------------------------------------------------
NOTE 10.          RISKS AND UNCERTAINTIES
-----------------------------------------------------------------------------


            The Company is currently  substantially  dependent on two  unrelated
            parties as manufacturers of their products.  The Company is pursuing
            alternative production sources. Management believes that the loss of
            these  current   manufacturers   would  not  significantly   disrupt
            operations and that  relationships  with alternate  manufacturers at
            similar costs could be established within a few weeks.

-----------------------------------------------------------------------------
NOTE 11.          DEFICIENCY IN ASSETS
-----------------------------------------------------------------------------

            Private Placements

            During  March  and  April  1999,  pursuant  to a  Private  Placement
            Memorandum, the Company issued 1,000 shares of convertible preferred
            stock for  $1,000  per share.  On August  25,  1999 these  shares of
            preferred  stock were converted into 751,879 shares of common stock.
            Costs  associated  with  this  offering  amounted  to  approximately
            $100,000.  Dividends  paid in connection  with the preferred  shares
            were $41,667 for the year ended December 31, 1999.

            During the period from  September  1999  through  December 31, 1999,
            pursuant  to a second  private  placement  memorandum  seeking up to
            $4,000,000  (Second Private  Placement),  the Company issued 887,376
            shares of common  stock for  $2,440,284,  or $2.75 per share.  Costs
            associated   with  the  second   private   placement   amounted   to
            approximately $244,000.

            Common Stock

            During August 1999,  12,778,545 shares of the Company's common stock
            were returned to the Company by certain shareholders in anticipation
            of the Reverse Acquisition.

            As of December 31, 1999,  the Company had not issued  certain  stock
            certificates  issuable in  connection  with  employment  agreements,
            consulting  agreements,  stock sales and founding stockholder shares
            due. However, as the Company is obligated to issue these shares, for
            financial  reporting  purposes,  all are  deemed  to be  issued  and
            outstanding.

<PAGE>


------------------------------------------------------------------------------
NOTE 12.          RELATED PARTY TRANSACTIONS
------------------------------------------------------------------------------
            Consulting Agreement

            On  January  25,  1999,  the  Company   entered  into  an  agreement
            (Consulting  Agreement)  with an entity  (Consultant)  who is also a
            shareholder  of the  Company,  to act as its  agent  and to  perform
            consulting  services and provide  assistance  with financial  growth
            strategies.  Under the terms of the Consulting Agreement, as amended
            on January  29,  1999,  and April 4,  1999,  the  Company  agreed to
            compensate the Consultant based upon various formulas, including the
            following:

a)   $20,000 paid on January 25, 1999;
b)   $2,500 per month for 12 months;
c)   704,576  shares  (after  giving  effect  for a  return  of  shares  by  the
     consultant in  anticipation  of the Reverse  Acquisition)  of the Company's
     common stock;
d)   Fees for debt moneys raised due to the efforts of  Consultant  shall be set
     at two percent (2%);
e)   Finder's fees computed at a rate to be agreed by both parties;

            Also under the  Consulting  Agreement,  and in  connection  with the
            Second Private  Placement,  the Company agreed to pay the Consultant
            approximately  $100,000 for each one million dollars raised, or part
            thereof,  through parties  introduced  directly or indirectly by the
            Consultant.

            For the year ended December 31, 1999 compensation in the form of the
            Company's  common stock and cash paid to the  Consultant  aggregated
            700,000 shares and approximately $438,000, respectively.

            Second Consulting Agreement

            On August 1, 1999, in connection with the  restructuring of the note
            payable   discussed   below,  the  Company  entered  into  a  second
            consulting   agreement   (Second   Consulting   Agreement)  with  an
            individual (Individual  Consultant) who is also a shareholder of the
            Company.  This  agreement  required  the  Individual  Consultant  to
            provide  services   including   product  market  studies,   customer
            relations and public  relations  assistance  for six months from the
            date of the  agreement.  Under  the  terms  of this  agreement,  the
            Company agreed to compensate the  Individual  Consultant  based upon
            various formulas, as follows:

a)   25,000  shares of the Company's  common  stock,  issuable 10 days after the
     signing of this agreement.
b)   20,833  shares of the  Company's  common  stock,  per month for a two month
     period, commencing 30 days after the signing of this agreement.

            For the year ended  December 31, 1999,  compensation  in the form of
            the  Company's  common  stock  paid  to  the  Individual  Consultant
            aggregated  66,666 shares.  On October 29, 1999 the Company  amended
            the  Second  Consulting  Agreement,  to  extend  the  terms  for  an
            additional  six  months,  expiring  on July 31,  2000 and  agreed to
            compensate  the  Individual  Consultant  with  17,000  shares of the
            Company's common stock per month for a two month period,  commencing
            15 days after signing the agreement.

            Compensation  related  to this  amendment  is  included  in  prepaid
            expenses and other current assets.


<PAGE>


---------------------------------------------------------------------------
NOTE 12.    RELATED PARTY TRANSACTIONS (Continued)
---------------------------------------------------------------------------

            Third Consulting Agreement

            In May 1999, the Company entered into a consulting agreement with an
            entity who is also a shareholder of the Company, which provides for,
            among other things,  payment of $100,000 per year for as long as the
            present majority shareholder maintains a controlling interest in the
            Company.  Approximately  $56,000  was paid in  connection  with this
            agreement for the year ended December 31, 1999.

            Notes Payable

            Between May and August 1999, the Company  borrowed funds under notes
            payable aggregating $1,200,000 from the Individual Consultant,  with
            interest  at 10% to  12%;  principal  and  accrued  interest  due at
            varying dates through April 2000. As  consideration to restructure a
            certain note, and in connection with the Second Consulting Agreement
            discussed   above,  the  Company  agreed  to  issue  the  Individual
            Consultant  250,000 shares of the Company's  common stock.  Interest
            expense for the year ended  December  31, 1999  related to this note
            amounted to $50,016. At December 31, 1999, $750,000 in notes payable
            and  accrued  interest  of  approximately  $15,000  was  due  to the
            Individual Consultant.  Subsequent to December 31, 1999, $250,000 in
            notes  payable plus accrued  interest of $2,383 was  converted  into
            126,192 shares of the Company's common stock.

            During  1999  the  Company   borrowed   funds  under  notes  payable
            aggregating $475,000 from the Related Distributor,  with interest at
            15%;  $75,000  principal  and accrued  interest due in July 2000 and
            $400,000  principal  and  accrued  interest  due in  November  2000.
            Interest  expense  related to this note  amounted  to  approximately
            $50,000 for the year ended December 31, 1999. Subsequent to December
            31, 1999,  $400,000 of these notes payable plus accrued  interest of
            $50,229 was converted  into 190,000  shares of the Company's  common
            stock.

-----------------------------------------------------------------------------
NOTE 13.          INCOME TAXES
--------------------------------------------------------------------------

            The components of the income tax benefit for the year ended December
            31, 1999 were as follows:

            Current Benefit
               Federal                                               $       -
               State                                                         -

            Deferred Benefit
               Federal                                               1,686,000
               State                                                   278,000

            Increase in Valuation Allowance                        ( 1,964,000)
            -------------------------------------------------------------------

            Income Tax Benefit                                       $       -
            -------------------------------------------------------------------


<PAGE>


-----------------------------------------------------------------------------
NOTE 13.    INCOME TAXES (Continued)
-----------------------------------------------------------------------------

            The major elements contributing to the difference between the income
            tax  benefit  and  the  amount  computed  by  applying  the  federal
            statutory tax rate of 34% to loss before income taxes are as follows
            for 1999:

            Tax benefit at U.S. Statutory rates                      $1,686,000
            State income tax benefit                                   278,000
            Change in valuation allowance                          ( 1,964,000)
            -------------------------------------------------------------------

            Income tax benefit                                       $       -
            ------------------------------------------------------------------

            At  December  31,  1999 the  Company  had  deferred  tax  assets  of
            $1,964,000,  principally  comprised  of net  operating  losses.  The
            deferred tax assets were offset by a valuation allowance in the same
            amount.  Deferred  tax  assets,  net of a valuation  allowance,  are
            recorded  when  management  believes it is more likely than not that
            tax benefits will be realized.

            The  Company  has  net   operating   loss   carryforwards   totaling
            approximately $5,260,000, expiring in 2019.


-----------------------------------------------------------------------------
NOTE 14.          STOCK OPTION PLANS
------------------------------------------------------------------------------

            In February  2000,  the Company  established a  Non-Qualified  Stock
            Option Plan under which  employees  and  non-employee  directors and
            advisors may be granted  options to purchase shares of the Company's
            common stock,  at a price to be determined by a two or more director
            committee,  which can not be less than the common  stock fair market
            value at the date of grant.  The Plan  authorizes the issuance of up
            to 1,500,000  shares of the Company's  common stock. At December 31,
            1999,  no options had been granted  under this Plan.  Subsequent  to
            December 31, 1999,  options to purchase  500,000 shares were granted
            to the CEO, in connection with his employment agreement.

            During 1999, the Company established an Incentive Stock Option plan,
            authorizing  the  issuance of options to  purchase  up to  1,500,000
            shares of the Company's  common stock to employees and  non-employee
            directors and advisors.  As of December 31, 1999 no options had been
            granted in connection with this plan.

            The  Company  has a Stock  Bonus  Plan,  under  which the  Company's
            employees,  directors,  officer  and  consultants  or  advisors  are
            eligible to receive a grant of the Company's common stock shares. At
            December 31, 1999, 250,000 shares of common stock were authorized in
            connection with this Plan and none had been granted.

            During 1999, the Company granted options to purchase  100,000 shares
            of common stock in connection with modification of debt.


<PAGE>


------------------------------------------------------------------------------
NOTE 14.    STOCK OPTION PLANS (Continued)
------------------------------------------------------------------------------

            Statement of Financial  Accounting Standards No. 123 "Accounting for
            Stock-based  Compensation," ("SFAS No. 123") requires the Company to
            record stock options granted to  non-employees  at fair value on the
            date of grant.  The Company  estimated  the fair value of each stock
            option by using the Black  Scholes  pricing model with the following
            assumptions:  expected life of the options of 13 months;  volatility
            of 20%; no dividends; and a risk free interest rate of 6.00%.

            A summary  of the  Company's  stock  option  activity,  and  related
            information for the year ended December 31, 1999 is as follows:

                                                                   Weighted
                                                       # of         Average
                                                     Options     Exercise Price
            ------------------------------------------------------------------

            Outstanding January 1, 1999                   -      $       -

               Granted                              100,000           2.00
               Exercised                                  -              -
               Forfeited                                  -              -
            -------------------------------------------------------------------

            Outstanding and exercisable
            December 31, 1999                       100,000      $    2.00
            -------------------------------------------------------------------

            The  weighted-average  fair value of options  granted  during  1999,
            using the  Black  Scholes  pricing  model  calculation  was $.88 per
            option.

            The exercise  price for options  outstanding as of December 31, 1999
            was  $2.00.  The  remaining  contractual  life of these  options  at
            December 31, 1999 was 10 months.


-----------------------------------------------------------------------------
NOTE 15.          COMMITMENTS AND CONTINGENCIES
-----------------------------------------------------------------------------
            Employment Agreements

            The Company  entered  into  employment  agreements  with certain key
            employees, effective October 1998 and February 2000.

            The  agreements  provide for,  among other  things,  minimum  annual
            salaries,  performance  bonuses based on meeting projected sales and
            issuance of common stock to certain employees.  In addition, the CEO
            received stock options.

            Future annual minimum payments under these employment agreements are
as follows:

            2000                                           $  688,344
            2001                                              351,750
            2002                                              351,750
            -----------------------------------------------------------

                                                           $1,391,844
            -----------------------------------------------------------

<PAGE>



------------------------------------------------------------------------------
NOTE 15.    COMMITMENTS AND CONTINGENCIES (Continued)
------------------------------------------------------------------------------

            Leases

            The Company  leases its office  facilities  under a  non-cancellable
            operating  lease  agreement  expiring in 2000.  The  minimum  rental
            commitment under this lease for year 2000 is $10,989.

            Total  rent  expense amounted to $15,141 and $11,199 in 199  and
            1998, respectively.

            Commitments

            Under a purchase agreement with a certain manufacturer,  the Company
            is committed to minimum annual purchases of approximately  $940,000.
            This amount would  represent  approximately  400,000 cases of coffee
            product per year.  Management  expects  production  to surpass  this
            minimum,  however,  there can be no  assurance  this minimum will be
            met.

            Contingencies

            The Company is involved in various claims and legal proceedings of a
            nature considered normal to its business.  The Company believes that
            the results of these claims will not have a material  adverse effect
            on the Company's financial condition.

            In connection with the Second Private Placement,  the Company agreed
            to file a registration statement covering the shares of common stock
            sold under the  Private  Placement.  The  Company has not filed such
            registration  statement.  The extent of the Company's liability,  if
            any, can not be determined at this time.


-----------------------------------------------------------------------------
NOTE 16.          SUBSEQUENT EVENTS
-----------------------------------------------------------------------------

            On January 11, 2000, the Company  granted options to purchase common
            stock to certain consultants as follows:

                                          Shares         Option       Expiration
                                         Issuable    Exercise Price      Date
            -------------------------------------------------------------------

            Individual Consultant          12,500     $     3.50         1-3-02
            Third Consultant               20,000           3.50         1-3-02
            Fourth Consultant              20,000           3.50         1-3-02

            Effective  February 2, 2000 the Company  entered  into an  agreement
            with  a  public  relations  firm  (PR  Consultant)  whereby  the  PR
            Consultant will establish a financial public  relations  methodology
            to promote  awareness  of the Company in the  investment  community,
            assist the Company in the  implementation  of their  business  plan,
            conduct tele-marketing, assist with press releases and perform other
            public  relations  services.  The term of the agreement is 12 months
            and  provides  for  payments  of  $15,000  per month and  options to
            purchase  200,000  shares of common  stock at  exercise  prices from
            $7.00 to $10.00 per share.

<PAGE>


---------------------------------------------------------------------------
NOTE 17.          SIGNIFICANT FOURTH QUARTER ADJUSTMENTS
---------------------------------------------------------------------------

            During the fourth  quarter  the  Company  made  certain  adjustments
            deemed to be material to the results of the quarter,  including  the
            following:

*    The Company  charged  approximately  $1,470,000 to  operations  relating to
     promotional and advertising expenses.

*    The  Company  charged  approximately  $152,000  to  operations  relating to
     professional and consulting fees.

*    The  Company  charged  approximately  $611,000  to  operations  relating to
     interest expense and financing fees.

*    The Company reversed sales of approximately  $1,000,000 which were recorded
     in the third quarter.




<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements of Section 13 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.

                                    EAST COAST BEVERAGE CORP.

                                  By: /s/ John Calebrese
                                      John Calebrese, Chief Executive Officer

                                  By: /s/ Robert Gardener
                                      Robert Gardener, Principal Financial
                                         Officer and Chief Accounting Officer

         Pursuant  to the  requirements  of the  Securities  Act of  l933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.

Signature                            Title                    Date

/s/ John Calebrese
John Calebrese                      Director              April 11, 2000


/s/ Edith G. Osman
Edith G. Osman                      Director              April 1, 2000

<PAGE>




                                 EAST COAST BEVERAGE CORP.

                                        FORM 10-KSB

                            FISCAL YEAR ENDING DECEMBER 31, 1999

                                          EXHIBITS