FORM 11-K

[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 1999

OR

[ ] TRANSITION REPORT PURSANT TO SECTION 13 OR (15d) OF THE

SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from _____ to _____

Commission File No.: 0-11927

(Full title of the plan)

(Name of issuer)

(Address and principal executive office)

Page(s)

Report of Independent Auditors 1

Statements of Net Assets Available for Benefits

as of December 31, 1999 and 1998 2

Statement of Changes in Net Assets Available for Benefits

for the Year Ended December 31, 1999 3

Notes to Financial Statements 4-6

Schedule 4(i) - Schedule of Assets Held for Investment Purposes

as of December 31, 1999 7

Signature 8

Consent of Arthur Andersen LLP, Independent Auditors Exhibit 23.1

Consent of Ernst & Young LLP, Independent Auditors Exhibit 23.2

Statements of Net Assets Available for Benefits

As of December 31, 1999 and 1998

Statement of Changes in Net Assets Available for Benefits

For the Year Ended December 31, 1999

1. General--The Plan is a defined contribution plan covering substantially all employees of Moto Photo, Inc. (the Company) who have attained age 20 1/2 and have completed six months of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
2. Contributions--Participants may elect to contribute from 1% to 20 % of their compensation to the Plan. In addition, the Company, at its discretion, may make matching and/or profit sharing contributions to the Plan. Participants may direct their contribution among various investment alternatives, including 23 different pooled separate accounts and Moto Photo, Inc. common stock, that provide varying investment strategies.
3. Participant Accounts--Each participant's account is credited with the participant's elective deferrals and an allocation of (a) the Company's discretionary matching contributions, (b) the Company's discretionary profit sharing contributions and (c) Plan earnings. Allocations of matching contributions are based on a discretionary percentage of the Participant's salary deferrals. Employer profit sharing contributions are allocated to the accounts of eligible participants in proportion to each such p ompensation. Age-adjusted compensation is determined by multiplying each participant's compensation earned during the plan year as a participant by the interest factor specified in the plan document.
4. Vesting--Participants are immediately vested in their voluntary contributions. Employer contributions become vested to the participant at a rate of 20 percent per year beginning with the second year, and are fully vested after six full years of continuous service. Forfeitures are used to reduce future employer contributions. At December 31, 1998 and 1999, forfeited nonvested accounts totaled approximately $20,000 and $48,000, respectively.
5. Participant Loans--Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of the lesser of $50,000 or 50 percent of their vested balance. Such loans bear interest at the prime rate at the date of the loan plus 1.5 percent. Principal and interest is paid ratably through monthly payroll deductions.
6. Payment of Benefits--Upon termination of service due to death, disability or retirement, a participant may elect to receive an amount equal to the vested value of his or her account in either a lump sum payout, or in the form of an annuity. Benefit payments to participants are recorded when paid.
7. Expenses of the Plan--The Company has elected to pay certain administrative expenses of the Plan. The amount of administrative fees paid by the Company during 1999 was minimal.

1. Basis of Accounting and Presentation--The accompanying financial statements have been prepared on the modified cash basis of accounting. The modified cash basis reflects the accounting records on a cash basis, with an adjustment of investments to fair value. Such accounting practices are permitted by the Department of Labor; however, this practice differs from accounting principles generally accepted in the United States. Accordingly, the accompanying financial statements and supplemental sche

   The Accounting Standards Executive Committee issued Statement of Position 99-3 "Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters" (SOP 99-3), which eliminates the requirement for a defined contribution plan to disclose participant-directed investment programs. As required by SOP 99-3, the Plan adopted SOP 99-3 for the 1999 financial statements and reclassified certain amounts in the 1998 financial statements to eliminate the participant-direc

   2. Investment Valuation--The Plan's investments in pooled separate accounts are reported at the redemption value of units of participation owned. The Company's common stock is valued at the last sales price reported on the NASDAQ Small Cap Market on the last day of the Plan year. Pooled separate accounts representing shares in mutual funds are stated at the net asset value as reported by the fund. Participant loans are valued at cost which approximates fair value.

   Purchases and sales of investments are recorded on a trade date basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on a cash basis.

    

   (3) Investments-

   The following table presents individual investments that represented 5 percent or more of the fair value of assets available for benefits for the years ended December 31:

   	1999	1998
   TA Stable Value Fund	$ 423,578	<5%
   TA Fidelity Equity Income II Fund	219,701	$207,998
   TA Janus Fund	314,319	176,550
   TA Janus Worldwide Fund	553,425	293,659
   TA Putnam Asset Allocation: Balance	367,559	340,425
   TA Balanced Fund	387,740	424,445
   TA Equity Fund	590,893	427,669
   TA Equity Index Fund	238,548	163,318

    

    

    

    

    

   Notes to Financial Statements (continued)

   (4) Tax Status-

   The Internal Revenue Service has determined and informed the Company by a letter dated December 19, 1996, that the Plan and related trust, as amended effective December 15, 1994, are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has subsequently been amended, however the Plan's administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

    

   (5) Related Party Transactions-

   The Plan invests in pooled separate accounts (mutual funds) which are sponsored by or managed by the Plan's asset custodian, Transamerica (TA) Insurance and Investments. The Plan also invests in the common stock of the Plan sponsor. These transactions qualify as party-in-interest transactions.

    

   (6) Plan Termination-

   Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA, as amended. In the event of Plan termination, participants will become 100% vested in their accounts.

    

   (7) Subsequent Event-

   Subsequent to year end, the Company announced its intentions to merge with PhotoChannel. As of the date of these financial statements, the merger had not been completed.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

   MOTO PHOTO, INC.

   SALARY SAVINGS PLAN

   Schedule 4i - Schedule of Assets Held for Investment Purposes as of December 31, 1999

   Identity of Issuer/ Description of Investment	Units/Shares	Fair Value
   Pooled separate accounts:
   * TA Stable Value Fund	423,578	$ 423,578
   * TA Aim Constellation Fund	342	21,531
   * TA Brandywine Fund	1,206	69,511
   * TA Fidelity ContraFund	1,947	133,367
   * TA Fidelity Equity Income II Fund	4,358	219,701
   * TA Fidelity Low Price Stock Fund	1,108	50,742
   * TA Janus Fund	5,217	314,319
   * TA Janus WorldwideFund	8,349	553,425
   * TA Loomis Sayles Bond Fund	1,389	34,265
   * TA Putnam Asset Allocation Balanced	17,224	367,559
   * TA Putnam Asset Allocation Conservative	648	11,041
   * TA Putnam Asset Allocation Growth	2,167	52,199
   * TA PBHG Emerging Growth Fund	1,501	61,118
   * TA PBHG Growth Fund	977	78,814
   * TA Putnam Diversified Income Fund	415	8,656
   * TA Strong Government Securities Fund	72	1,402
   * TA Stein Roe Capital Opportunities Fund	158	8,705
   * TA Balanced Fund	12,210	387,740
   * TA Bond Fund	1,051	17,119
   * TA Equity Fund	7,786	590,893
   * TA Equity Index Fund	6,113	238,548
   * TA Templeton Foreign Fund	934	25,418
   * TA T Rowe Price International Bond Fund	377	7,385
   Common stock:
   * Moto Photo, Inc. common stock	57,436 shares	47,516
   *Participant loans with interest rates from 8.75% to 10.50%		68,680
   		$3,793,232

   * Denotes party-in-interest transaction.

    

    

    

    

    

    

    

    

    

    

    

   SIGNATURE

   Pursuant to the requirements of the Securities Exchange Act of 1934, the Moto Photo, Inc. Salary Savings Plan Committee has duly caused this annual report to be signed by the undersigned thereunto duly authorized.

   Moto Photo, Inc. Salary Savings Plan

    

    

   By: /s/ David A. Mason

   David A. Mason

   Trustee

    

   Date: October 30, 2000

    

    

   EXHIBIT INDEX

   No. Description

   23.1 Consent of Arthur Andersen LLP, Independent Auditors

   23.2 Consent of Ernst & Young LLP, Independent Auditors