<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   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 September 30, 2000

    [ ] Transition report under Section 13 or 15 (d) of the Exchange Act

          For the transition period from _____________ to _____________

                        Commission file number 000-17001

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

               Delaware                           52-1529536
   -------------------------------    ------------------------------------
   (State or Other Jurisdiction of    (I.R.S. Employer Identification No.)
    Incorporation or Organization)

            111 Queen Anne Avenue North
                    Suite 501
               Seattle, Washington                         98109
   ---------------------------------------------        -----------
      (Address of Principal Executive Offices)           (Zip code)

                 Issuer's Telephone Number, Including Area Code

                                  206-270-9200
                                  ------------

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

         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 September 30, 2000:

                                   60,558,755

           Transitional Small Business Disclosure Format (check one):
                                 Yes [ ] No [X]







Index to Financial Statements

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

<PAGE>

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
<CAPTION>
                                                                             PAGE
<S>                                                                         <C>
Condensed Balance Sheet at September 30, 2000
(Unaudited) ..............................................................     1

Condensed Statements of Operations for the
Three and Nine Months Ended
September 30, 1999 and 2000 (Unaudited) ..................................     2

Condensed Statement of Stockholders' Equity
for the Three Months Ended September 30, 2000 (Unaudited).................     3

Condensed Statements of Cash Flows for the
Three and Nine Months Ended September 30, 1999 and 2000 (Unaudited).......     4

Notes to Financial Statements ............................................     5

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations.........................................     7


Part II - OTHER INFORMATION

Item 1. Legal Proceedings.................................................     9

Item 6. Exhibits Index....................................................     9
</TABLE>












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                                       (i)
<PAGE>

                          PART I. Financial Information

Item 1.   Financial Statements


                                   CECS CORP.
                             CONDENSED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          September 30, 2000
                                                          ------------------
<S>                                                       <C>
ASSETS
Current assets:
    Cash                                                   $      18,498
    Cash due from Brokers                                         20,524
    Marketable Securities                                      1,638,742
    Prepaid rent expenses                                         25,289
                                                             ------------
        Total current assets                                   1,703,053

Other assets:
    Furniture, Fixtures and Equipment - net of depreciation       12,489
    Non-marketable securities at cost                             75,000
                                                             ------------

        Total assets                                       $   1,790,542
                                                             ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
    Accounts payable                                       $      87,505
    Accrued expenses                                                 -0-
    Accrued professional fees                                    180,000
    Notes payable - current                                      340,000
                                                             ------------
        Total current liabilities                                607,505
                                                             ------------
Long-term liabilities                                                -0-
                                                             ------------
        Total liabilities                                        607,505
                                                             ============
Commitments and Contingencies

Stockholders' Equity:
    Preferred stock, par value $.01 per share:
        Authorized 50,000,000 shares: 22.741 shares issued
        and outstanding at September 30, 2000.                         3
    Common stock, par value $.01 per share:
        Authorized 200,000,000 shares: issued and
        outstanding 60,558,755 shares at September 30, 2000      605,588
    Additional paid-in-capital                                22,666,032
    Accumulated deficit                                       23,165,728
    Accumulated other comprehensive income (Note_)             1,038,947
                                                             ------------
        Total stockholders' deficit                            1,144,842
                                                             ------------
                                                          $    1,752,347
                                                             ============
</TABLE>

See accompanying notes to financial statements.

                                      -1-
<PAGE>

                                   CECS CORP.
          CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                            For the Three Months     For the Nine Months
                                                             Ended September 30,      Ended September 30,
                                                          ------------------------  -----------------------
                                                              1999         2000        1999         2000
                                                          -----------  -----------  ----------   ----------
<S>                                                       <C>          <C>          <C>          <C>
Operating costs and expenses:
  General and administrative expenses                     $     1,098  $   344,287  $   17,226   $  388,272
  Professional and consulting expenses                        498,313       24,384     612,212      218,273
  Stock based compensation                                        -0-      520,000         -0-      520,000
                                                          -----------  -----------  ----------   ----------
      Total operating costs and expenses                      499,411      888,671     629,438    1,126,545
                                                          -----------  -----------  ----------   ----------
Other Income (expense):                                         3,125          -0-       6,289          -0-
                                                          -----------  -----------  ----------   ----------

Income (loss) from operations                                (502,536)    (888,671)   (635,727)  (1,126,545)
                                                          -----------  -----------  ----------   ----------
Extraordinary Gain (loss):
  Gain on sale of marketable securities                           -0-       29,069         -0-       29,069
  Gain on sale of certain contract rights                         -0-          -0-         -0-      203,075
  Gain on reconciliation of accruals                              -0-          -0-         -0-      115,576
                                                          -----------  -----------  ----------   ----------

Net Income (loss)                                            (502,536) $  (859,602)   (635,727)  $ (778,825)
  Other Comprehensive Income Net of Tax
                              (Note_)                                    1,038,947                1,038,947
                                                                       -----------               ----------
Comprehensive Income                                                   $   179,345               $  260,122
                                                          ===========  ===========               ==========


Net Income (loss) per share of common stock - Note 2:

  Basic Income (loss) per share:                          $     (0.02) $       -0-  $    (0.03)  $      -0-
                                                          ===========  ===========  ==========   ==========
  Diluted Income (loss) per share:                        $     (0.02) $       -0-  $    (0.02)  $      -0-
                                                          ===========  ===========  ==========   ==========
</TABLE>


See accompanying notes to financial statements.






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                                      -2-
<PAGE>


                                   CECS CORP.
                      CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
                    For the Nine Months Ended September 30, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>

                                        Preferred Stock         Common Stock        Additional                  Compre-
                                        -----------------  ----------------------    Paid-in    Accumulated     hensive
                                         Shares    Amount     Shares      Amount     Capital      Deficit       Income      Total
                                        --------   ------  -----------   --------  -----------  ------------  ----------  ----------
<S>                                     <C>        <C>     <C>           <C>       <C>          <C>           <C>         <C>
Balance at December 31, 1999:              109.1   $    1   28,504,395   $285,044  $21,496,035  $(22,386,903)         --  $(605,824)

Issuance of preferred stock
  in exchange for debt and cash:             390   $    3                              779,997            --          --    780,000

Issuance of common stock
  on conversion of preferred stock:     (476.359)      --   19,054,360    190,544           --            --          --    190,544

Issuance of common stock
  for Stock Based Compensation:              -0-      -0-   13,000,000    130,000      390,000            --          --    520,000

Net income (loss) for the Nine months
  ended September 30, 2000:                                                                         (778,825)         --    778,825

Accumulated other comprehensive
  income (Note_):                                                                                              1,038,947  1,038,947
                                        --------   ------  -----------   --------  -----------  ------------  ----------  ----------
                                          22.741   $    3  $60,558,755   $605,588  $22,666,032  $ 23,165,728  $1,038,947  $  114,484
                                        ========   ======  ===========   ========  ===========  ============  ==========  ==========



</TABLE>


See accompanying notes to financial statements.







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                                       -3-
<PAGE>

                                   CECS CORP.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         For the Nine Months
                                                                         Ended September 30,
                                                                      --------------------------
                                                                         1999            2000
                                                                      ----------       ---------
<S>                                                                   <C>              <C>
Cash flows from operating activities:
Net income (loss)                                                     $ (635,727)      $  (90,613)
                                                                      ----------       ----------
Adjustments to reconcile net loss
  to net cash provided by (used in) operating activities:
    Depreciation and amortization                                            -0-              484
Change working capital - net:                                                -0-            1,124

Change in other assets - net                                              (5,650)         (21,642)

                                                                         (50,000)
                                                                         558,005          (70,944)
                                                                             -0-           (2,859)
                                                                             -0-
                                                                      ----------       ----------
Total adjustments                                                        502,355         (119,557)
                                                                      ----------       ----------
Net cash provided by (used in) operating activities                     (133,372)        (184,451)
                                                                      ----------       ----------
Cash flows from financing activities:
    Proceeds from notes payable                                          180,000
    Other long-term liabilities
                                                                      ----------       ----------
Net cash used in financing activities                                    186,289
                                                                      ----------       ----------
Net increase (decrease) in cash                                           52,917         (184,451)
Cash at beginning of period                                                2,074          197,117
                                                                      ----------       ----------
                                                                      $   54,991       $   12,666
Cash at end of period                                                 ==========       ==========

Supplementary disclosure of cash flow information:                    $      -0-       $      -0-
   Cash paid during the year for interest                             ==========       ==========

</TABLE>



See accompanying notes to financial statements.





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                                      -4-
<PAGE>

                                   CECS CORP.
                          NOTES TO FINANCIAL STATEMENTS

Note 1. Financial Statements

        Business

        On January 17, 2000, the Board of Directors of the Company
        decided to change the business of Choices Entertainment
        Corporation ("Choices") to that of a technology holding
        company. At the annual stockholders meeting in May, 2000,
        the stockholders approved the change of the name of the
        Company to CECS CORP. In 1997, Choices sold all of its
        assets. Until then, Choices was engaged in the retail home
        video cassette rental business.

        Quarterly Financial Statements:

        The accompanying unaudited financial statements for the
        three-month and nine-month periods ended September 30, 2000
        and 1999 have been prepared in accordance with the
        instructions for Form 10QSB.

        Use of Estimates

        The preparation of consolidated 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 financial statements and the reported amount of revenues
        and expenses during the reporting period. Actual results
        could differ from those estimates.

        In the opinion of management, all adjustments, consisting of
        normal recurring adjustments, which are necessary for a fair
        presentation of the results for the interim period have been
        made. The results of operations for the three-month and
        nine-month periods ended September 30, 2000, are not
        necessarily indicative of the results to be expected for the
        full year.

Note 2. Summary of Significant Accounting Policies

        Net Income (Loss) Per Common Share

        Primary income per share for the three-month periods ended
        September 30, 2000 and September 30, 1999 was computed by
        dividing the net income by the weighted average number of
        common shares outstanding during the periods.

        Fully diluted income per share for the nine-month periods
        ended September 30, 2000 and September 30, 1999 was computed
        by dividing the net income by the weighted average number of
        common shares outstanding during the periods, as well as the
        number of common shares that would be outstanding as a
        result of the conversion of the Company's preferred stock.

<TABLE>
<CAPTION>
                                                                For the Nine Months
                                                                Ended September 30,
                                                           -----------------------------
         Number of shares used in calculation                 1999               2000
         ------------------------------------              -----------        ----------
<S>                                                        <C>                <C>
            Basic                                          22,004,000         34,328,799
            Diluted                                        26,364,395         42,835,709
</TABLE>


                                       -5-
<PAGE>

        Cash and Cash Equivalents

        The Company considers all certificates of deposit and highly
        liquid debt instruments purchased maturing in three months
        or less to be cash equivalents.

        Revenue Recognition

        Revenue is recognized using the accrual method of
        accounting.

        Securities

        Marketable securities are carried at market. Non-marketable
        securities are carried at cost.

Note 3. Liquidity

        The Company continues to rely on borrowing and capital
        raising activities to provide funds for its operating and
        investing activities. The Company's viability for the
        foreseeable future is and will continue to be dependent upon
        its ability to find 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.

Note 4. Notes Payable

        The Company continues to rely on borrowing and capital
        raising activities to provide funds for its for operating
        and investing activities. The Company has borrowed $340,000
        as of the quarter ending September 30, 2000. The notes are
        for various monthly terms not exceeding one year and accrue
        interest at 12% per annum compounded annually payable at
        maturity.

Note 5. Related Party Transactions-Subsequent Events

        Subsequent Events

        Since Tracy M. Shier, President and CEO ("Shier") and Thomas
        Renna ("Renna"), VP Investor Relations have worked,
        generally, throughout 2000 without compensation, the Board
        of Directors approved cash compensation of $100,000 each
        through October 31, 2000. Compensation beyond that date was
        referred to the future recommendation of the Compensation
        Committee of the Board of Directors chaired by an outside
        director. Accordingly, $180,000 of compensation was accrued
        as current liability as of September 30, 2000 and the
        expense charged to General and Administrative Expense in the
        Statement of Operations.

        Additionally, the Board of Directors approved, as a direct
        grant of stock, for past services of Shier and Renna,
        10,000,000 and 3,000,000 shares respectively of the
        Company's common stock. The fair market value per share of
        the Company's common stock OTC-BB was approximately $0.04 on
        October 25, 2000. These grants were recorded as common stock
        issued and the expense recorded as Stock Based Compensation
        (approximately $520,000) in the Statement of Operations. In
        conjunction with this compensation, the Board of Directors
        approved, in concept, a loan to Renna equal to the income
        tax effect of the grant of the common stock

                                       -6-
<PAGE>

        discussed above. The term of the loan is to be negotiated
        and the loan will bear interest at 12%. The loan will be
        secured by a pledge of the stock to be held by the company
        for safekeeping until the loan is repaid. As part of this
        transaction, both Shier and Renna have agreed to release the
        Company from any further claims for compensation for past
        services.

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

              The following is our discussion of certain significant factors
        that have affected the Company's financial condition changes in
        financial condition, and results of operations. The discussion also
        includes our liquidity and capital resources at September 30, 2000
        and later dated information, where practicable. The following
        discussion should be read in conjunction with the Financial
        Statements and notes included in this form 10-QSB.

              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.

              We have acquired securities issued by publicly traded
        Photochannel Networks Inc. In January 2000, the Company subscribed to
        a private placement of CAN$2,300,000 principal amount of Convertible
        Subordinated Redeemable 0% Debentures maturing April 30, 2000 (the
        "Debentures") issued by PhotoChannel Networks Inc., a British
        Columbia corporation ("Photochannel"). The subscription agreement
        calls for advances to Photochannel in exchange for the issuance of
        Debentures as follows: CAN$350,000 by January 31, 2000; CAN$750,000
        by February 29, 2000; and CAN$1,200,000 by April 14, 2000. The
        Debentures are convertible into Photochannel common stock, no par
        value, ("Photochannel Stock") at the rate of 1 share of Photochannel
        Stock for each CAN$.50 in debenture principal amount. Also, the
        company was granted warrants pursuant to a vesting schedule to
        purchase additional shares of Photochannel Stock as follows: 140,000
        warrants with an exercise price of CAN$.75; 300,000 warrants with an
        exercise price of CAN$1.00; and 480,000 warrants with an exercise
        price of CAN$1.25. Each warrant entitles the Company to purchase 1
        share of Photochannel Stock at the exercise price, for cash. The
        warrants are presently fully vested and will expire June 30, 2000. As
        of the date of the filing of this report on Form 10QSB, the Company
        had completed its obligations under the subscription agreement and
        has converted the Debentures to Photochannel Stock and has exercised
        the warrants. Upon completion of these transactions some part of the
        Photochannel Stock held by us was held of record by us but for the
        benefit of other persons and business entities.

              On or about xxx, 2000 we received a share certificate for
        [1,590,590] Shares of Photochannel Stock. [more]

              We have acquired securities of non-publicly traded Tridium
        Research, Inc. In March 2000, the Company paid $50,000 cash to
        acquire 250,000 shares of common stock of Tridium Research Inc., a
        Washington corporation ("Tridium") based in Kirkland, Washington. The
        250,000

                                       -7-
<PAGE>

        shares of common stock acquired represents approximately 5% of all
        Tridium common stock issued and outstanding. The Company has also
        obligated itself to provide an additional $200,000 to Tridium, upon
        terms and conditions to be determined. In May 2000, the Company
        provided an additional $25,000 to Tridium to purchase an additional
        125,000 shares of common stock of Tridium.

              The Company generated [no revenues] from operations during the
        [nine] three months ended September 30, 2000. The Company did,
        however, realize an extraordinary gain of US$203,075 (CAN$300,000) as
        a result of the sale of its contractual rights to subscribe to
        certain of the securities of Photochannel in the transaction
        described above. The primary source of funds for the nine-month
        period was the completion of a private placement of the Company's
        Series C Preferred Stock (the "Preferred Stock") and shareholder
        loans.

              In February 2000, the Company closed a self-offered private
        offering of 390 shares of the Company's Preferred Stock in the
        aggregate offering amount of $780,000. Offering expenses were less
        than $3,000. Each share of the Preferred Stock is convertible into
        40,000 shares of the Company's common stock and carries the voting
        rights of the underlying common stock. The proceeds from this
        offering were used to retire all notes payable, to pay down the
        obligations of the Company to officers and directors of the Company,
        to pay down accounts payable to an immaterial amount, and to acquire
        interests in the two companies identified above.

              The Company paid down $250,000 of notes outstanding as a result
        of the private placement discussed above but has subsequently
        borrowed $340,000 at an interest rate of 12%.

              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.

              Between December 31, 1999 and September 30, 2000 the Company
        incurred a net loss on continuing operations of $(278,649) and
        achieved net income of $40,002. Because of the number of shares
        outstanding, earnings on a per share basis is negligible but positive.

              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 $400,000 and cash in
        the bank is approximately $20,000.

              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 risk and uncertainties associated with
        adverse litigation, the ability to identify and conclude alternative
        business opportunities, and those risks and uncertainties detailed in
        the

                                      -8-
<PAGE>

        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.


                           Part II - OTHER INFORMATION

Item 1. Legal Proceedings

        The Company is a defendant to the lawsuit Dion Signs & Service, 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 & Service, 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 Company is advised that
pre-judgment interest on the claim accrues from the date the cause of action
arose and that the amount of pre-judgment interest could approximate the
amount of the claim, or approximately $33,000. The Company is further advised
that the case has not been set for trial, there has been very little
discovery, and that it is not possible to determine the likelihood of the
outcome of this case at this time.

Item 6.   Exhibits

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
  No.            Description of Exhibit
-------------------------------------------------------------------------------
<S>           <C>
3 (a)         Certificate of Incorporation, as amended (1)
  (b)         Certificate of Designations of Series C Preferred Stock, as
              amended (2)
  (c)         By-Laws, as amended (3)
4 (a)         Form of Certificate Evidencing Shares of Common Stock (4)
  (b)         Form of 5% Promissory Note (5)
10.99 (a)     Consulting Agreement between Registrant and Thomas Renna (7)
      (b)     Letter of Intent to Acquire Republic Hotel Investors, Inc. (8)
27            Financial Data Schedule (9)
-------------------------------------------------------------------------------
</TABLE>

(1)       Filed as an Exhibit to Registrant's Registration Statement on Form S-8
          (File No. 33-87016) and incorporated herein by reference.

(2)       Filed as an Exhibit to Registrant's Annual Report on Form 10-KSB, for
          the year ended December 31, 1996 and incorporated herein by reference.

(3)       Filed as an Exhibit to Registrant's Annual Report on Form 10-KSB for
          the year ended December 31, 1999 and incorporated herein by reference.

(4)       Filed as an Exhibit to Registrant's Registration Statement on Form S-1
          inclusive of Post-Effective Amendment No. 1 thereto (File No.:
          33-198983) and incorporated herein by reference.

(5)       Filed as an Exhibit to Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended September 30, 1995 and incorporated herein by
          reference.

                                             -9-
<PAGE>

(6)       Filed as an Exhibit to Registrant's Annual Report on Form 10-KSB for
          the year ended December 31, 1997.

(7)       Filed as an Exhibit to Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended March 31, 1999 and incorporated herein by
          reference.

(8)       Filed as an Exhibit to Registrant's Current Report on Form 8-K dated
          August 30, 1999 and incorporated herein by reference.

(9)       Filed herewith.

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report On Form 10QSB for the period ended September 30, 2000 to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                       CECS CORP.
                                      (Registrant)

Date:   November 14, 2000              By:   /s/ Tracy M. Shier
                                       --------------------------------------
                                       Tracy M. Shier, Director, President and
                                       Chief Executive Officer





                                      -10-