<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 March 31, 2000

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

          For the transition period from _____________ to _____________

                        Commission file number 000-17001

                        Choices Entertainment Corporation
--------------------------------------------------------------------------------
        (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)

  121 Vine Street, Suite 1903 Seattle, Washington                   98121-1456
         ----------------------------------------                   ----------
   (Address of Principal Executive Offices)                         (Zip code)

                 Issuer's Telephone Number, Including Area Code
                                 (206) 443-6948
                                 --------------
--------------------------------------------------------------------------------
              (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 March
30, 2000:
                                    29,274,355
Transitional Small Business Disclosure Format (check one):
                                 Yes [  ]    No [X]


<PAGE>

                           PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>

     Item 1.   Financial Statements

     Index to Financial Statements                                       Page
<S>                                                                      <C>
Condensed Balance Sheet at March 31, 2000
(Unaudited)                                                                2

Condensed Statements of Income for the
Three Months Ended March 31, 2000 and 1999 (Unaudited)                     3

Condensed Statement of  Stockholders' Deficit for the
Three Months Ended March 31, 2000 (Unaudited)                              3

Condensed Statements of Cash Flow for the
Three Months Ended March 31, 2000 and 1999 (Unaudited)                     4

Notes to the Unaudited Condensed Financial Statements                      4

     Item 2.   Management Discussion and Analysis of
               Financial Condition and Results of Operations               6

                           PART II - OTHER INFORMATION

     Item 1.   Legal Proceedings                                           8

     Item 6.   Exhibit Index                                               9
</TABLE>



                                        -1-
<PAGE>

                           Part I - FINANCIAL INFORMATION

Item 1.   Financial Statements

                         CHOICES ENTERTAINMENT CORPORATION
                             CONDENSED BALANCE SHEET
                                    (unaudited)
<TABLE>
<CAPTION>

                                                                 March 31, 2000
                                                                 --------------
<S>                                                              <C>
ASSETS

Current assets:
    Cash                                                          $      71,781
                                                                   ------------
        Total current assets                                             71,781

Other assets
    Prepaid expense and misc.                                               464
    Non-marketable securities - net at cost                             467,215
                                                                   ------------
         Total assets                                             $     539,460
                                                                   ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable and accrued expense                          $     175,233
    Notes payable-current                                               297,000
                                                                    -----------
        Total current liabilities                                       472,233
                                                                   ------------
        Total liabilities                                               472,233

Stockholders' deficit:

Preferred stock, par value $.01 per share:
Authorized 5,000 shares: 478.829
issued and outstanding                                                       4

Common stock, par value $.01 per share:
Authorized 50,000,000 shares: 29,315,235 issued
And outstanding                                                        293,152

Additional paid-in-capital                                          22,276,035

Accumulated deficit                                                (22,501,961)
                                                                   ------------
        Total stockholders' deficit                                     67,227
                                                                   ------------
                                                                  $    539,460
                                                                   ============
</TABLE>

        See accompanying notes to financial statements.


                                        -2-

<PAGE>

                         CHOICES ENTERTAINMENT CORPORATION
                           CONDENSED STATEMENTS OF INCOME
                                    (Unaudited)
<TABLE>
<CAPTION>

                                                       For the Three Months
                                                          Ended March 31,
                                                     -------------------------
                                                       2000             1999
                                                     --------         --------
<S>                                                  <C>              <C>
Operating costs and expenses:
  Selling and administrative expense                 $ 26,711         $  8,152
  Professional and consulting expense                 163,510           37,786
                                                     --------         --------
                                                      190,221           45,938
                                                     --------         --------
Other expenses:
  Merger and Acquisition Expense                       27,000              -0-
  Interest (income) expense, cash-net                    (587)             206
  Issuance of stock in lieu of interest expense        14,000              -0-
                                                     --------         --------
Income from continuing operations                   (230,634)         (46,144)
                                                     --------         --------
Gain on reconciliation of accruals                   115,576               -0-
                                                     --------         --------
Net income                                         $(115,058)        $(46,144)
                                                    ========          ========
Net loss per share of common stock:

  Basic income per share:
     Continuing operations                           $  (0.01)        $  -0-
     Net income                                          -0-             -0-
                                                     ========         ========
   Diluted income per share:
     Continuing operations                           $  (0.01)        $  -0-
     Net income                                          -0-             -0-
                                                     ========         ========
</TABLE>

                  CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
                   For the Three Months Ended March 31, 2000
                                   (Unaudited)
<TABLE>
<CAPTION>


Preferred Stock          Common Stock        Additional
---------------          ------------         Paid-in     Accumulated
Shares   Amount     Shares      Amount        Capital      Deficit       Total
------   ------   ----------   --------      -----------   ----------    -----
<S>      <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) $(605,823)

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
(20.271)   -          810,840      8,108          -          -           8,108

Net loss for the three months
ended March 31, 2000:                                     (115,058)   (115,058)
---   --     ----------      --------  -----------  ------------      ---------
478.829    $4      29,315,235   $293,152   $22,276,035 $(22,501,961)  $  67,227
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>


See accompanying notes to financial statements.


                                        -3-

<PAGE>

                         CHOICES ENTERTAINMENT CORPORATION
                         CONDENSED STATEMENTS OF CASH FLOWS
                                    (Unaudited)
<TABLE>
<CAPTION>

                                                          For the Three Months
                                                             Ended March 31,
                                                       ----------------------------
                                                         2000                1999
                                                       --------            --------
<S>                                                    <C>                 <C>
Cash flows from operating activities:
Net loss                                               $(115,058)          $(46,144)
                                                       --------             --------
Adjustments to reconcile net loss
 to net cash provided by (used in)
 operating activities:
Change in assets and liabilities:
   Change in accounts payable
    and accrued expense                                 (200,703)            (5,000)
   Change in accrued merger and acquisition
    expenses                                              27,000            (50,000)
   Change in accrued professional fees                       -              (20,970)
   Change in other accrued expenses                       (4,570)             5,000
                                                        --------            --------
Total adjustments                                        (178,273)          (29,030)
                                                         --------            --------
Net cash provided by (used in) operating activities     (293,331)            (75,174)
                                                         --------            --------
Cash flows from investing activities:
   Purchase of non-marketable securities                (467,215)                -0-
                                                        --------            --------
Net cash provided by (used in) investing activities     (467,215)                -0-
                                                        --------            --------
Cash flows from financing activities:
   Proceeds from notes payable                           297,000              75,000
   Repayment of notes payable                           (250,000)                -0-
   Issuance of preferred stock
    for cash and in exchange for
    notes payable                                        780,000                 -0-
   Other long-term liabilities                           (14,167)                206
                                                        --------            --------
Net cash provided by (used in) financing activities      812,833              75,206
                                                        --------            --------
Net increase (decrease) in cash                           52,287                  32
Cash at beginning of period                               19,494               2,074
                                                        --------            --------
Cash at end of period                                   $ 71,781             $ 2,106
                                                        ========            ========
Supplementary disclosure of cash flow information:
   Cash paid during the period for interest             $    167            $    -0-
                                                        ========            ========
</TABLE>

               NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1.   Financial Statements

          Quarterly Financial Statements:

          The accompanying unaudited financial statements for the three-month
          period ended March 31, 2000 and 1999 have been prepared in accordance
          with the instructions for Form 10QSB and do not include all of the
          information and footnotes required by generally accepted accounting
          principles for completed financial statements.

          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 period ended March 31, 2000, are not
          necessarily indicative of the results to be expected for the full
          year.

                                -4-

<PAGE>

Note 2.   Summary of Significant Accounting Policies

          Net Income (Loss) Per Common Share
          Primary income per share for the three-month periods ended March 31,
          2000 and March 31, 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 three-month period ended March
          31, 2000 and March 31, 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 Three Months
                                                       Ended March 31,
                                                  -------------------------
                                                     2000           1999
                                                  ----------     ----------
          <S>                                     <C>            <C>
          Number of shares used in calculation
            Basic                                  24,489,387     22,004,000
            Diluted                                28,853,327     26,364,395
</TABLE>

          Cash and Cash Equivalents
          The Company considers all certificates of deposit and highly liquid
          debt instruments purchased with a maturity of 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 lower of cost or 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 has been dependent on borrowing for operating capital. The
          Company has borrowed $297,000 as of the quarter ending March 31, 2000.
          The notes mature on or before June 29, 2000 and bear interest at 12%
          per annum, compounded annually, interest and principal payable at
          maturity.

Note 5.   Related Party Transactions

          In August 1999, the Company's Board of Directors passed a resolution
          expressly recognizing the obligation of the Company to compensate each
          of Jim Sink, George Pursglove, Thomas Renna and Tracy Shier for
          services rendered and to be rendered to the Company in connection with
          the change of control of the Company and the


                                 -5-
<PAGE>

          maintenance of it as an existing, reporting corporation. Pursuant to
          that resolution, the Board fixed the obligation to each of the named
          individuals at $120,000 and gave each the option to take some part or
          that entire amount in securities of the Company. On December 29, 1999
          the Board of Directors of the Company passed a resolution instructing
          the Company's transfer agent to issue restricted shares of the
          Company's common stock to the named individuals, in an amount of
          shares and in exchange for release of an amount of the Company's
          obligation as follows: Jim Sink--2,400,000 shares--$120,000; George
          Pursglove--1,200,000 shares--$60,000; Thomas Renna--1,200,000
          shares--$60,000; and Tracy Shier--1,200,000 shares--$60,000. At or
          about the time of the adoption of the December 29th resolution, the
          price of the stock was approximately $.05 per share.

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 the our liquidity and capital resources at March 31, 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.

               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 10KSB, the Company
           had completed its obligations under the subscription agreement and
           has converted the Debentures to common stock. All of the securities
           acquired in this transaction as well as the securities into which the
           securities acquired are convertible or exercisable against are
           restricted securities ad must be held for the applicable holding
           period from the date of conversion or exercise, as the case may be.
           The applicable holding period in most cases will be 1 year.

                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 shares of common stock acquired represents approximately 5%
           of all


                               -6-
<PAGE>

           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.

               The Company generated no revenues during the three-months ended
           March 31, 2000. The primary source of funds for the quarter 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 borrowed $297,000 at an
          interest rate of 12%.

               We anticipate that the Company will not generate any significant
          revenues until the 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 March 31, 2000 the Company incurred
          a net loss on continuing operations of $(230,634) resulting in a net
          working capital deficiency of approximately $400,452 as of March 31,
          2000.

               The Company's viability for the foreseeable future is and will
          continue to be dependent upon its ability to find other business
          opportunity and to secure needed capital existing disputes. 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 outstanding liabilities of the Company are
          approximately $138,000 and cash in the bank is approximately $17,218.

               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
          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


                                    -7-
<PAGE>

          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.

               The Company is aware of the issues associated with Year 2000
          ("Y2K") software compliance and the need to upgrade existing
          programming code in any computer system that it may use or purchase as
          the year 2000 approaches. The year 2000 issue relates to whether a
          computer system will properly recognize dates after 1999. If it cannot
          adequately process beyond the year 1999 and is not corrected,
          significant difficulties may be encountered in using the computer
          system. The Company currently uses computer time on a system that is
          available on an as needed basis provided for by an affiliate of the
          Company. It is not anticipated that the Company will incur any
          negative impact as a result of this potential problem. However, it is
          possible that this issue may have an impact on the Company if the
          Company successfully consummates a merger or acquisition. Management
          intends to address this potential problem with any prospective merger
          or acquisition candidate. There can be no assurances that new
          management of the Company will be able to avoid a problem in this
          regard after a merger or acquisition is so consummated.


                            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.


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                  Choices Entertainment Corporation
                                            (Registrant)

Date:   May 15, 2000               By:

                                       /s/ Tracy M. Shier
                                       -------------------------------------
                                       Tracy M. Shier, Director, President and
                                       Interim Chief Financial Officer


                               -8-

<PAGE>

                                 INDEX TO EXHIBITS

Exhibit
  No.             Description of Exhibit
-------  ----------------------
 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   Consulting Agreement between Registrant and Thomas Renna (7)
 27      Financial Data Schedule (8)

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

(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.

(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.

(8) Filed herewith.

(9) To be filed by amendment.


                                       -9-