<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON D.C. 20549

                                    FORM 10-QSB

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

                 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER  30, 1998

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

          FOR THE TRANSITION PERIOD FROM ________________TO_______________

                          COMMISSION FILE NUMBER: 0-17001

                         CHOICES ENTERTAINMENT CORPORATION
                   (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


               DELAWARE                                          52-1529536
        (STATE OR OTHER JURISDICTION OF                        (IRS EMPLOYER
     INCORPORATION OR ORGANIZATION)                         IDENTIFICATION NO.)
                                          
           10770 WILES ROAD
          CORAL SPRINGS, FLORIDA                                33076-2009
         (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)

                                          
                                   (954) 752-4289
                                          
                (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


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 [  ] No [X] 

As of May 19, 1999, 22,004,395 shares of Common Stock  were outstanding. 

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


<PAGE>

                           PART I:  FINANCIAL INFORMATION

Item 1.   Financial Statements 

                         CHOICES ENTERTAINMENT CORPORATION
                                   BALANCE SHEETS
                                    (Unaudited)
<TABLE>
<CAPTION>
                                               September 30,     December 31,
                                                   1998             1997
                                               ------------      ------------
<S>                                          <C>              <C>
ASSETS:
Current Assets:
  Cash                                          $ 12,666         $197,117
  Accounts receivable                                  -            1,123
                                                 --------         --------
Total Current Assets                            $ 12,666          198,240
Equipment, net                                     3,147            3,631
Other assets                                    $    125              125
                                                 --------         --------

TOTAL ASSETS                                    $ 15,938         $201,996
                                                 --------         --------
                                                 --------         --------

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
  Accounts payable                              $ 11,460         $ 33,104
Accrued merger and acquisition expense           353,799          353,799
Accrued professional fees                         58,814          129,758
Accrued salaries                                       -            2,859
Other accrued expenses                             5,419            5,419
                                                 --------         --------
  Total Current Liabilities                      429,492          524,938
                                                 --------         --------
Stockholders' Deficit:
  Preferred Stock, par value $.01 per share:,
  Authorized 5,000 shares:  109 shares issued
  and outstanding in 1998 and 1997                     1                1  
Common Stock, par value $.01 per share:
  Authorized 50,000,000 shares:
  22,004,395 shares issued and                   220,044          220,044
  outstanding in 1998 and 1997
 Additional paid-in-capital                   21,236,035       21,236,035
 Accumulated deficit                         (21,869,635)     (21,779,022)
                                              ------------    ------------
      Total Stockholders' Deficit               (413,554)        (322,941)
                                                 --------         --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 15,938         $201,996
                                                --------         --------
                                                --------         --------
</TABLE>

                                         2

<PAGE>

                         CHOICES ENTERTAINMENT CORPORATION
                                 STATEMENTS OF LOSS
                                    (Unaudited)

<TABLE>
<CAPTION>
                                       For the Three Months    For the Nine Months
                                           Ended Sept. 30,        Ended Sept. 30,
                                            1998    1997          1998       1997
                                            ----    ----          ----       ----
<S>                                      <C>      <C>            <C>      <C>
Operating costs and expenses:
Selling and administrative expenses      $ 11,266 $  71,205      $70,597  $  157,451
 Professional and consulting expenses      11,165   214,332       60,566     340,773
 Depreciation and amortization                  -     9,953          484      29,537
                                         --------   ---------    --------  ---------
                                           22,431   295,490      131,647     527,761

Other expenses:
Settlement                                      -         -       40,000           -
Interest expense(income),                       -     2,591       (1,034)     37,081
                                         --------   ---------    --------  ---------
Loss from continuing operations           (22,431) (298,081)     (90,613)   (564,842)
                                         --------   ---------    --------  ---------
Discontinued operations--Note 4
  Loss from discontinued operations             -        -            -     (303,785) 
  Gain on sale of discontinued                                               
   Operations net of tax of $13,092             -        -            -    1,312,045
                                         --------   ---------    --------  ---------
Gain(loss)from discontinued operations          -        -            -    1,008,260
                                         --------   ---------    --------  ---------
Net income (loss)                        $(22,431)  $(298,081)   $(90,613) $ 443,418
                                         --------   ---------    --------  ---------
</TABLE>

<TABLE>
<CAPTION>
Net income (loss) per share of common stock--Note 2:
<S>                                        <C>        <C>        <C>       <C>
  Primary income (loss) per share
     Continuing operations                 $   --     $(0.01)    $    --   $(0.03)

     Discontinued operations               $   --     $  --      $    --   $ 0.05

Fully diluted income (loss) per share:
     Continuing operations                 $   --     $(0.01)    $    --   $(0.02)

     Discontinued operations               $   --     $  --      $    --   $ 0.04
</TABLE>


                         CHOICES ENTERTAINMENT CORPORATION
                        STATEMENTS OF STOCKHOLDERS' DEFICIT
                    FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
                                    (Unaudited)

<TABLE>
<CAPTION>
Preferred Stock                      Common Stock          Additional paid-in       Accumulated Deficit
(Shares)                       (Shares)      (Amount)        Capital
<S>                            <C>           <C>             <C>                      <C>
Balance at December 31, 1997:

109.0                          22,004,395    $ 220,044      $21,236,035              $(21,869,635)  

Net income for the 9 months 
  ended September 30, 1998                                  $   (90,613)
</TABLE>


                                         3

<PAGE>


                         CHOICES ENTERTAINMENT CORPORATION
                              STATEMENTS OF CASH FLOWS
                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                     Nine Months Ended 
                                                                       September 30,
                                                                --------------------------
                                                                 1998                1997
                                                                 ----                ----
<S>                                                           <C>             <C>
Cash Flows From Operating Activities:
Net income (loss)                                             $(90,613)        $ 443,418
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization                                      484           489,968
     Gain on sale of assets, net of tax (Note 4)                              (1,312,045)
     Cost of rental films sold                                                   121,342
     Loss on disposal of rental films                                             83,621
     Videocassette and inventory reserves                                          7,667
   Change in assets and liabilities:
     Increase in cash held in escrow                                           (243,000)
     (Increase) decrease in accounts receivable                  1,124         (  4,068)
     (Increase) decrease in merchandise inventories                               62,584
     (Increase) decrease in prepaid expenses                                      24,053
     Increase in other deferred expenses                                           8,487
     Increase (decrease) in accounts payable                   (21,642)        (651,911)
     Decrease in accrued merger and acquisition expenses                       ( 50,550)
     Increase (decrease) in accrued professional fees          (70,944)        ( 40,203)
     Decrease in deferred revenue                                              ( 27,797)
     Decrease in accrued salaries                               (2,859)        ( 43,774)
     Decrease in accrual for lease cancellation                                 ( 1,250)
     and litigation reserves
     Increase (decrease) in other accrued expenses                             (165,909)
                                                               --------         --------
   Total adjustments                                          (119,557)      (1,742,785)
Net cash provided (used in) operating activities              (184,451)      (1,299,367)
                                                               --------         --------
   Cash Flows From Investing Activities:
     Purchase of equipment, net                                                 (10,049)
     Purchase of videocassette rental films                                    (620,807)
     Net proceeds from sale of assets (Note 4)                                 2,411,507
                                                               --------         --------
Net cash provided (used in) investing activities                               1,780,651
                                                               --------         --------
     Cash Flows From Financing Activities:
     Proceeds from notes payable                                                  49,000
     Repayment of notes payable                                                (393,950)
                                                               --------         --------       
Net cash used in financing activities                                          (344,950)
Net increase (decrease) in cash                               (184,451)          136,334
   Cash at beginning of period                                $197,117         $  66,739
                                                               --------         --------
   Cash at end of period                                      $ 12,666         $ 203,073 
                                                               --------         --------
                                                               --------         --------

   Supplemental Disclosure of cash flow information:
     Cash paid during the period for interest                 $      0         $  37,081
</TABLE>


                                         4


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Note 1.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 

     The financial information included herein for the three-month and 
nine-month periods ended September 30, 1998 and 1997 and as of September 
30, 1998, and December 31, 1997, are unaudited. In addition, the financial 
information does not include all disclosures required under generally 
accepted accounting principles because certain note information has been 
omitted; however, such information reflects all adjustments which are, in the 
opinion of management, necessary for a fair statement of the results of the 
interim periods and such adjustments are of a normal recurring nature. The 
results of operations for the nine-month period ended September 30, 1998, are 
not necessarily indicative of the results to be expected for the full year. 

Note 2.   NET INCOME (LOSS) PER COMMON SHARE 

     Primary income per share for the three-month and six-month periods ended
September 30, 1998 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 three-month and nine-month periods
ended September 30, 1998, 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>
                                             Three Months Ended September 30,      Six Months Ended September 30,
                                                  1997              1998               1997            1998
<S>                                           <C>                <C>               <C>               <C>
 Number of shares used in calculation:
   Primary dilution                            22,004,000         22,004,000        22,004,000       22,004,000

   Full dilution                               24,372,000         24,272,000        24,372,000       24,372,000
</TABLE>

Note 3. LIQUIDITY 

     As previously reported, on June 16, 1997, the Company sold substantially
all of its assets and business to West Coast Entertainment Corporation, ("West
Coast"). Notwithstanding the sale of its operating business, 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's viability for the foreseeable future is and will continue to
be dependent upon its ability to find other business opportunities, to secure
needed capital and to successfully conclude existing litigation. 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.   WEST COAST TRANSACTION AND DISCONTINUED OPERATIONS 

     As previously reported, the Company consummated the previously announced
sale of substantially all of its assets to West Coast on June 16, 1997. The
consideration for the assets sold consisted entirely of cash in the amount of
$2,430,000. A substantial portion of the proceeds was used to reduce a portion
of the Company's liabilities at closing. In addition, $243,000 of the proceeds
was escrowed with West Coast pursuant to the terms of the Asset Purchase
Agreement between the Company and West Coast. The escrowed funds have been
released to the Company and expended. 

                                         5

<PAGE>

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 which have affected the Company's financial condition,
changes in financial condition, and results of operations. The discussion also
includes the Company's liquidity and capital resources at September 30, 1998 and
later dated information, where practicable. 

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES 

     As previously reported, on June 16, 1997, the Company sold substantially
all of its assets and business to West Coast Entertainment Corporation,  ("West
Coast"). Notwithstanding the sale of its operating business, 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
no operations at the present, however, and has engaged in no business since at
least June 16, 1998. 

     Current Directors of the Company estimate that outstanding liabilities of
the Company are approximately $429,000 and cash in the bank is approximately
$12,600.

     The Company's viability for the foreseeable future is and will continue to
be dependent upon its ability to find other business opportunities, to secure
needed capital and to successfully conclude existing litigation. 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. 

     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 risks and uncertainties associated with
adverse litigation, 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 assumptions or bases believed to be
reasonable and are made in good faith, assumed facts or bases almost always vary
from actual results, 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 an 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 not aware of any pending legal proceedings to which the
Company is a party or of which any of its property is the subject that has not
been previously reported. 
Item 6.  Exhibits 
(a)  Exhibits. 
     There are no exhibits other than Exhibit 27 (Financial Data Schedule)
included as part of this report. 
(b)  Reports on Form 8-K. 
     The Company filed a Form 8-K dated June 16, 1998 which included disclosure
under Item 1. Change of Control of Registrant thereof. 
     The Company filed a Form 8-K dated October 28, 1998 which included
disclosure under Item 4. Change in Registrant's Certifying Accountant thereof.

                                         6

<PAGE>
                                          
                                     SIGNATURES

     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report on Form 10QSB for the period ending
September 30, 1998 to be signed on its behalf by the undersigned, thereunto duly
authorized. 

                                             Choices Entertainment Corporation 
                                                        (Registrant)


Date:   May 19, 1999                          By:

                                                /s/ George D. Pursglove
                                               -----------------------------
                                               George D. Pursglove , Interim 
                                                     Chief Financial Officer