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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-QSB

(Mark One)

|/x/ | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------

For the quarterly period ended March 31, 2001

or

|/ / | Transition report under Section 13 or 15(d) of the Exchange Act
|--- | ---------------------------------------------------------------

For the transition period from  to

Commission file number 000-17001

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CECS CORP.(Exact Name of Small Business Issuer as Specified in Its Charter)

Delaware(State or Other Jurisdiction of
Incorporation or Organization)

52-1529536(I.R.S. Employer Identification No.)111 Queen Anne Avenue North
Suite 501
Seattle, Washington(Address of Principal Executive Offices)

98109(Zip Code)


Issuer's Telephone Number, Including Area Code 206-270-9200

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(Former Name, Former Address and Former Fiscal Year, if changed since last report)

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

State the number of shares outstanding of the issuer's Common Stock, as of March 31, 2001: 47,970,875

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

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Index to Financial Statements

|                                                                                              |  | Page
|--------------------------------------------------------------------------------------------- |  | ----
|Part IFINANCIAL INFORMATION                                                                  |  |     
|Item 1. Financial Statements(Unaudited)                                                      |  |     
|Condensed Balance Sheet at March 31, 2001                                                     |  | 1   
|Condensed Statements of Operations for the Three Months Ended
March 31, 2001 and 2000         |  | 2   
|Condensed Statement of Stockholders' Equity for the Three Months Ended
March 31, 2001         |  | 3   
|Condensed Statements of Cash Flows for the Three Months Ended
March 31, 2001 and 2000         |  | 4   
|Notes to Financial Statements                                                                 |  | 5   
|Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations |  | 11  
|Part IIOTHER INFORMATION                                                                     |  |     
|Item 1. Legal Proceedings                                                                     |  | 13  
|Item 6. Exhibits Index                                                                        |  | 13  

[THIS SPACE INTENTIONALLY LEFT BLANK]

i

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PART I. Financial Information

Item 1. Financial Statements

CECS CORP.        (A development stage company)        CONDENSED BALANCE SHEET        March 31, 2001        (Unaudited)

|                                     |                                                                  | March 31, 2001 |                                                     
|------------------------------------ | ---------------------------------------------------------------- | -------------- | ----------------------------------------------------
|ASSETS                               |                                                                  |                |                                                     
|Current assets:                      |                                                                  |                |                                                     
|                                     | Cash                                                             |                | $                                                   
|                                     | Marketable securities                                            |                |                                                     
|                                     | Prepaid rent                                                     |                |                                                     
|                                     |                                                                  |                |                                                     
|Total Current assets                 |                                                                  |                | 86,410                                              
|                                     |                                                                  |                |                                                     
|Other assets:                        |                                                                  |                |                                                     
|                                     | Furniture fixtures and equipment                                |                |                                                     
|                                     | Less accumulated depreciation of $3,782                          |                |                                                     
|                                     | Non-marketable securities, at cost                               |                |                                                     
|                                     | Notes receivable                                                 |                |                                                     
|                                     |                                                                  |                |                                                     
|                                     |                                                                  |                | Total assets                                        
|                                     |                                                                  |                |                                                     
|LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                  |                |                                                     
|Current liabilities:                 |                                                                  |                |                                                     
|                                     | Accounts payable                                                 |                |                                                     
|                                     | Accrued expenses                                                 |                |                                                     
|                                     | Accrued Professional fees                                        |                |                                                     
|                                     | Notes Payablecurrent                                            |                |                                                     
|                                     |                                                                  |                |                                                     
|                                     |                                                                  |                | Total current liabilities                           
|                                     |                                                                  |                |                                                     
|Commitments and Contingencies        |                                                                  |                |                                                     
|Stockholders' Equity:                |                                                                  |                |                                                     
|                                     | Preferred stock, par value $0.01 per share:                      |                |                                                     
|                                     | Authorized 50,000,000 shares 11.416 issued and outstanding       |                |                                                     
|                                     | Common stock, par value $0.01 per share:                         |                |                                                     
|                                     | Authorized 200,000,000 shares: 47,970,875 issued and outstanding |                |                                                     
|                                     | Additional paid-in-capital                                       |                |                                                     
|                                     | Accumulated deficit                                              |                |                                                     
|                                     | Accumulated other comprehensive income                           |                |                                                     
|                                     |                                                                  |                |                                                     
|                                     |                                                                  |                | Total stockholder's equity (deficit)                
|                                     |                                                                  |                |                                                     
|                                     |                                                                  |                | Total liabilities and stockholder's equity (deficit)
|                                     |                                                                  |                |                                                     

See
accompanying notes to financial statements.

1

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CECS CORP.        (A development stage company)        CONDENSED STATEMENTS OF OPERATIONS        (Unaudited)

|                                    |                                      | For the Three
Months Ended
March 31, |                                   
|----------------------------------- | ------------------------------------ | ------------------------------------ | ----------------------------------
|
|Operating costs and expenses:       |                                      |                                      |                                   
|                                    | General and administrative expenses  |                                      | $                                 
|                                    | Professional and consulting expenses |                                      |                                   
|                                    |                                      |                                      |                                   
|                                    |                                      |                                      | Total operating costs and expenses
|Other income (expense):             |                                      |                                      | (9,289                            
|                                    |                                      |                                      |                                   
|Income (loss) from operations       |                                      |                                      | (94,124                           
|                                    |                                      |                                      |                                   
|Non-operating gain (loss):          |                                      |                                      |                                   
|                                    | Gain on reconciliation of accruals   |                                      |                                   
|                                    | Loss on sale of investments          |                                      |                                   
|                                    |                                      |                                      |                                   
|                                    |                                      |                                      | Total non-operating gain (loss)   
|                                    |                                      |                                      |                                   
|Net income (loss)                   |                                      |                                      | (234,944                          
|                                    |                                      |                                      |                                   
|Other comprehensive income (loss)   |                                      |                                      | (2,408                            
|                                    |                                      |                                      |                                   
|Net comprehensive income (loss)     |                                      | $                                    | (237,352                          
|                                    |                                      |                                      |                                   
|Net loss per share of common stock: |                                      |                                      |                                   
|                                    | Basic net loss per share             |                                      | $                                 
|                                    |                                      |                                      |                                   
|                                    | Diluted net loss per share           |                                      | $                                 
|                                    |                                      |                                      |                                   

See
accompanying notes to financial statements.

2

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CECS CORP.        (A development stage company)        CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY        For the three Months Ended        March 31,
2001    (Unaudited)

|                                                            |  | Preferred |   | Common |       |   |            |  |   |         |  |   |           
|----------------------------------------------------------- |  | --------- | - | ------ | ----- | - | ---------- |  | - | ------- |  | - | ----------
|
|
|Balance at December 31, 2000                                |  | 17.74     |   | $      | 0.18  |   | 47,717,875 |  | $ | 477,179 |  | $ | 22,081,901
|Issuance of common stock on conversion of preferred stock   |  | (6.33     | ) |        | (0.06 | ) | 253,000    |  |   | 2,530   |  |   | (2,530    
|                                                            |  |           |   |        |       |   |            |  |   |         |  |   |           
|Net Income (Loss) for the three months ended March 31, 2001 |  |           |   |        |       |   |            |  |   |         |  |   |           
|Accumulated other comprehensive income                      |  |           |   |        |       |   |            |  |   |         |  |   |           
|                                                            |  |           |   |        |       |   |            |  |   |         |  |   |           
|Balance at March 31, 2001                                   |  | 11.42     |   | $      | 0.11  |   | 47,970,875 |  | $ | 479,709 |  | $ | 22,079,371
|                                                            |  |           |   |        |       |   |            |  |   |         |  |   |           

See accompanying notes to financial statements.

3

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

|                                                                                          |                                                        | For the Three
Months Ended
March 31,                            |         
|----------------------------------------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------------------------------- | --------
|
|Cash flows from operating activities:                                                     |                                                        |                                                                 |         
|Net Income (loss)                                                                         |                                                        | $                                                               | (234,944
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                        |                                                                 |         
|                                                                                          | Depreciation and amortization                          |                                                                 |         
|                                                                                          | Realized loss on sale of investments                   |                                                                 |         
|                                                                                          | Change in operating assets and liabilities:            |                                                                 |         
|                                                                                          |                                                        | (Increase) decrease in cash due from brokers                    |         
|                                                                                          |                                                        | (Increase) decrease in cash due from brokers                    |         
|                                                                                          |                                                        | Increase (decrease) in accounts payable and accrued liabilities |         
|                                                                                          |                                                        |                                                                 |         
|Total adjustments                                                                         |                                                        |                                                                 | 122,234 
|                                                                                          |                                                        |                                                                 |         
|Net cash provided by (used in) operating activities                                       |                                                        |                                                                 | (112,710
|                                                                                          |                                                        |                                                                 |         
|Cash flows from investing activities:                                                     |                                                        |                                                                 |         
|                                                                                          | Additions to furniture and fixtures                    |                                                                 |         
|                                                                                          | Acquisition of non-marketable investments and rights   |                                                                 |         
|                                                                                          | Issuance of notes receivable                           |                                                                 |         
|                                                                                          | Other investing activities                             |                                                                 |         
|                                                                                          |                                                        |                                                                 |         
|Net Cash provided by (used in) investing activities                                       |                                                        |                                                                 | (72,533 
|                                                                                          |                                                        |                                                                 |         
|Cash flows from financing activities:                                                     |                                                        |                                                                 |         
|                                                                                          | Proceeds from sale of marketable securities            |                                                                 |         
|                                                                                          | Proceeds from the sale of investments                  |                                                                 |         
|                                                                                          | Proceeds from notes payable                            |                                                                 |         
|                                                                                          | Payments of notes payable                              |                                                                 |         
|                                                                                          | Proceeds from issuance preferred stock, net            |                                                                 |         
|                                                                                          |                                                        |                                                                 |         
|Net cash provided from financing activities                                               |                                                        |                                                                 | 233,955 
|                                                                                          |                                                        |                                                                 |         
|Net increase (decrease) in cash                                                           |                                                        |                                                                 | 48,712  
|Cash at the beginning of the period                                                       |                                                        |                                                                 | 23,966  
|                                                                                          |                                                        |                                                                 |         
|Cash at the end of the period                                                             |                                                        | $                                                               | 72,678  
|                                                                                          |                                                        |                                                                 |         
|Supplemental disclosure of cash flow information:                                         |                                                        |                                                                 |         
|                                                                                          | Cash paid during the period for interest               |                                                                 | $       
|                                                                                          |                                                        |                                                                 |         
|                                                                                          | Non-cash exchange of notes payable for preferred stock |                                                                 | $       
|                                                                                          |                                                        |                                                                 |         

See
accompanying notes to financial statements.

4

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CECS CORP.    (A development stage company)    NOTES TO FINANCIAL STATEMENTS    Quarters ended March 31, 2001 and 2000

Note 1Nature of Operations

Business Activities

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

Note 2Summary of Significant Accounting Policies

Equity Securities

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

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

Comprehensive Income

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

Use of Estimates

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

5

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Reclassification and Restatement

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

Development Stage Enterprise

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

Note 3Liquidity

The Company's financial statements included herein have been presented on the basis that the Company is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The Company has an accumulated deficit of $22,683,013 as of March 31, 2001 and net loss of approximately $234,944
and $115,058 for the quarters ended March 31, 2001 and 2000 respectively.

As
of March 31, 2001, the Company has approximately $73,000 in cash. The Company's viability for the foreseeable future is dependent upon its ability to find business
opportunities and raise needed capital. The Company's ability to raise needed capital is seriously in question. In the event the Company is not successful in securing needed capital in the near term,
as to which no assurance can be given, the Company does not believe that its viability as an ongoing business is assured. The Company's business plan is focused, in the near term, on acquiring assets
and building operating companies. The Company is involved in discussions with several companies about acquiring either the target company or certain assets of the target company. None of the
referenced discussions are sufficiently far advanced to warrant specific disclosure about the target property or company. In each case, additional capital is required to realize the value of the
intellectual property or franchise value of the target company to be acquired. Management intends, among other things, to raise capital privately prior to the end of June 2001. If the Company
is unable to raise needed capital, then it is likely that current management will not implement the current business plan.

Note 4Marketable Equity Securities

The Company's investments in marketable equity securities are classified as available-for-sale. The cost and approximate fair value of
marketable equity securities available-for-sale are summarized as follows at March 31, 2001:

Cost

Unrealized Loss

Fair ValuePublicly traded securities

$
3,808

$
2,408

$
1,400


Gross
unrealized holding losses were $2,408, gross proceeds from the sale of securities was $243,955, with an average cost of $384,755 and gross realized losses of $140,820, using the
average cost method.

Note 5Notes Receivable

We have provided capital on a loan basis to Speaklink, Inc. (Speaklink), a privately held company based in Seattle, Washington. The Company is the
holder of two Speaklink promissory notes each in the amount of $35,000. The first note, dated October 19, 2000, matured December 19, 2000 and the

6

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second note, dated October 27, 2000, matured December 27, 2000, in each case with accrued interest. The notes contain all of the standard terms and conditions of commercially reasonable
promissory notes written or made in the ordinary course of business. The Company has not demanded repayment of the notes at this time and is in discussion with Speaklink as to repayment, conversion of
the notes to equity or other satisfaction of the notes.

Additionally
the Company provided capital on a loan basis to FastVoice, Inc. (FastVoice), a privately held company based in Seattle, Washington. The Company is the holder of a
FastVoice promissory note in the amount of $72,000, dated January 20, 2001 with interest at 12% per annum. The note contains all of the standard terms and conditions of a commercially
reasonable promissory note written or made in
the ordinary course of business. The Company has not demanded repayment of the note at this time and is in discussion with FastVoice as to repayment, conversion of the notes to equity or other
satisfaction of the notes.

Note 6Notes Payable

As of March 31, 2001, the Company has notes payable outstanding in the amount of $330,000. The Company's 12% unsecured promissory notes in the principal
amount of $330,000 Which matured in December 2000.

Note 7Disclosure of Information About Capital Structure

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

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

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

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

Rights and Privileges

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

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

7

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

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

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

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

Convertible
Preferred Shares are not redeemable by the Company.

Note 8Stock Options

Stock Option and Appreciation Rights Plan

The Company has an unallocated reserve of 1,694,000 shares of its common stock for grant under its 1987 Stock Option and Appreciation Rights Plan (the "1987
Plan"). Pursuant to the 1987 Plan, the Company may grant either incentive stock options, intended to comply with the requirements of Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-qualified stock options, as well as stock appreciation rights.

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

1987
Plan are non-transferable other than by will or by the laws of descent and distribution.

The
following table sets forth information with respect to incentive stock options under the Plan for the year ended March 31, 2001:

Expiration Date

Number
of Holders

Shares of
Common Stock
Subject to
Option

Exercise
Price
per ShareNovember 29, 2001

1

1,500,000

$
0.75


8

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Non-qualified management incentive options

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

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

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

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

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

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

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

Basic and diluted loss per share for the quarters ended March 31, 2001 and 2000, was computed by dividing the net loss by the weighted average number of
common shares outstanding during the periods. No consideration was given to the conversion of preferred stock since the result of that calculation would be antidilutive. The approximate number of
shares used in the computation of loss per share amounts is as follows:

Quarter ended March 31,

Number of Shares used in Calculation2001Basic and Diluted

47,942,7642000Basic and Diluted

29,315,235


Note 10Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. SFAS No. 109 requires the liability method of
accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured by
applying enacted tax rates for the taxable years in which

9

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those differences are expected to reverse. Recognition of deferred tax assets is subject to a valuation allowance if it is more likely than not that not all of a deferred tax asset will be realized.

As
of March 31, 2001 the Company had approximately $19,810,000 of net operating loss carry-forwards for tax purposes which may be available to offset future federal income, if
any, through 2021. The amount ultimately available, if any in future years, is subject to certain limitations. Should the Company operate profitably in future years, it may be subject to current tax
expense in certain states for which no net operating loss carry-forwards are available.

Note 11Commitments

The Company leases its office facilities in Washington under a non-cancelable operating lease that expires December 30, 2001. The rent is
$4,292 per month through December 30, 2001. Before June 2000, the Company's President provided the Company's executive office rent-free. The rent expenses for the quarters
ended March 31, 2001 and 2000 were $14,159 and $0 respectively.

Note 12Pending Litigation

The Company is a defendant to the lawsuit Dion Signs & Services, Inc. vs. Choices Entertainment Corporation, Civil Action
No. 91-6871. The case is now pending in the Providence County Superior Court, Providence, Rhode Island. Dion Signs & Services, Inc. alleges that it is owed
approximately $33,000 plus interest, costs and reasonable attorney's fees, totaling in the aggregate approximately $95,000, for the failure by Choices Entertainment Corporation to pay for signage that
was erected at various locations pursuant to a contract. See Subsequent Events Note 14

Note 13Payments to Related Parties

During the quarter ended March 31, 2001 payments to Tracy M. Shier, President and CEO totaled $25,500 and to Thomas Renna, Vice President, totaled
$14,900.

Note 14Subsequent Events

The Dion Signs & Services vs. Choices lawsuit discussed in Note 12 was settled in May 2001. The Company agreed to pay $22,000 to Dion
Signs & Services, Inc. over the next six months in semi-monthly installments of $6,000 except for the first installment, which is for $5,000. No provision for loss was made
at March 31, 2001 for this subsequent event.

10

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management's discussion and analysis of certain significant factors that have affected the Company's financial condition, changes in financial
condition and results of operations. It also includes a discussion of the Company's liquidity and capital resources at March 31, 2001, and later dated information, where practicable. This
discussion should be read together with the Company's Financial Statements and the Notes thereto.

Overview

The Board of Directors (the "Board") of Choices Entertainment Corporation (the "Company" or "We") adopted a proposal on January 17, 2000 to change the
business of the Company to that of a technology holding company. We are acquiring, investing in, and incubating companies engaged in Internet, computing and other technologies in various stages of
development. On May 26, 2000 at the Annual Meeting, our stockholders' adopted a resolution proposed by the board of directors of the Company changing the name of the Company to CECS CORP.

Financial Condition, Liquidity and Capital Resources

As of March 31, 2001, the Company had a net working capital deficit of approximately $365,304. As of March 31, 2001, the Company had approximate
cash balances of $73,000 (unaudited).

The
primary source of funds for the quarter ended March 31, 2001 was the sale of marketable securities. The Company had no revenues.

From
September 2000 to March 2001, the Company engaged in a selling program of its Photochannel Stock.

We
anticipate that the Company will not generate any significant revenues until we accomplish our business objective of merging or acquiring revenue producing assets from a
nonaffiliated entity. We
presently have no liquid financial resources to offer an acquisition candidate and must rely upon an exchange of our stock to complete a merger or acquisition.

The
Company's viability for the foreseeable future is and will continue to be dependent upon its ability to find other business opportunities and to secure needed capital. No
assurance can be given that the Company will be successful in that regard. In the event the Company is not successful, it is unlikely that there would be any amounts available for distribution to the
Company's stockholders.

We
estimate that at the time of filing this report, outstanding liabilities of the Company are approximately $452,000 and cash in the bank is approximately $5,000.

Capital Expenditures

The Company's capital expenditures were $533 during the quarter ended March 31, 2001.

Material Changes in Results of Operations

March 31, 2001 compared to March 31, 2000:

Net
Loss:

The
Company had a net loss of $237,944 and $115,058 for the quarters ended March 31, 2001 and 2000 respectively. The significant changes between the periods are discussed
below:

General
and administrative expenses were lower by $6,000 in the 2001 quarter compared to 2000 although the nature of expenses differed. There was over $14,000 in rent expense in 2001
and none in

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2000 because the president of the Company provided office space for no rent. This was offset by travel expense and offering expenses of approximately $20,000 incurred in the quarter ending
March 31, 2000 compared to none in the first quarter of 2001.

Professional
and consulting expenses were approximately $100,000 greater in the quarter ending 2000 than 2001. During the first quarter of 2000, the Company was involved in fund
raising and a private offering of Series C preferred stock, the results of which are explained further below. Two Company officers were paid approximately $116,000 during this 2000 period
compared to $14,000 charged to income in the 2001 period. Additionally there was $20,000 paid to a former officer in the 2000-quarter and none in 2001.

In
the first quarter 2000, the Non-operating "Gain on reconciliation of accruals" of $115,576 represents the release to income of two third party professional fees accrued
at December 31, 1999 that ultimately were determined to not be due and payable. There were no such amounts in the first quarter 2001.

In
the first quarter 2001 there was a Non-operating loss on the sale of investments totaling $140,820 while there was none in the 2000 quarter. In the first quarter 2000
the Company completed a 506 C preferred stock offering as a first step in recapitalizing since the shareholders approval to be reinvented as a technology company. This offering exchanged $245,000 of
debt for preferred stock and raised $523,000 of cash. This amount was used generally to acquire approximately $467,000 of non-marketable securities and rights. Certain of these rights were
sold and the rest exercised for marketable securities in the year ended December 31, 2000. After conversion the Company entered a selling program to realize a gain on this investment and
realized a gain of $364,652 in the year ended December 31, 2000. The Company has sold generally all of its remaining holding in the quarter ended March 31, 2001 receiving proceeds of
$243,955 which was $140,820 below average cost.

This
Quarterly Report on Form 10-QSB contains forward looking information with respect to, among other things, plans future events or future performance of the
Company, the occurrence of which involve certain risks and uncertainties that could cause actual results or future events to differ materially from those expressed in any forward looking statements.
These risks and uncertainties include, but are not limited to, the ability to identify and conclude alternative business opportunities, and those risks and uncertainties detailed in the Company's
filings with the Securities and Exchange Commission. Where any forward-looking statement includes a statement of the assumption or bases believed to be reasonable and are made in good faith, assumed
facts or bases almost always vary from actual result, and the differences between assumed facts or bases and actual results can be material, depending upon the circumstances. Where, in any forward
looking statement, the Company expresses and expectation or belief as to plans or future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable
basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished. The words "believe", "expect" and "anticipate" and similar expressions
identify forward-looking statements.

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Part IIOTHER INFORMATION

Item 1. Legal Proceedings

The Company is a defendant to the lawsuit Dion Signs & Services, Inc. vs. Choices Entertainment Corporation, Civil Action
No. 91-6871. The case was brought in the Providence County Superior Court, Providence, Rhode Island. Dion Signs & Services, Inc. alleges that it is owed approximately
$33,000 plus interest, costs and reasonable attorney's fees for the failure by Choices Entertainment Corporation to pay for signage that was erected at various locations pursuant to a contract. The
case has been settled and will require the Company to pay $22,000 to Dion Signs & Services, Inc. over the next six months in semi-monthly installments of $6,000 except for
the first installment which is in the amount of $5,000.

Item 6. Exhibits

INDEX TO EXHIBITS

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

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|(g)(1) |  | Promissory NoteSpeaklink Inc. dated October 19, 2000(14)  
|------ |  | -----------------------------------------------------------
|(g)(2) |  | Promissory NoteSpeaklink Inc. dated October 27, 2000(14)  
|(h)(1) |  | Fastvoice Term SheetThird Party dated October 31, 2000(14)
|(h)(2) |  | Promissory NoteFastvoice.com dated January 11, 2001(14)   
|21     |  | Subsidiaries of Registrant(14)                             

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report on Form 10QSB for the period ended March 31, 2001 to
be signed on its behalf by the undersigned, thereunto duly authorized.

|             |  | CECS CORP.
(Registrant)
|------------ |  | -----------------------
|May 14, 2001 |  | By:                    

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