U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)
[x]ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   For the fiscal year ended December 31, 2000

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

                         Commission file number 0-19721
                            THE CLASSICA GROUP, INC.
                 (Name of small business issuer in its charter)

                New York                                13-3413467
   (State or other  jurisdiction             (IRS Employer identification no.)
of incorporation  or  organization)

     1835 Swarthmore Avenue, Lakewood, New Jersey        08701
       (Address of principal executive offices)       (Zip Code)

                                 (732) 363-3800
                           (Issuer's telephone number)
                        ---------------------------------
     Securities registered under section 12(b) of the Exchange Act:
    Title of each class             Name of each exchange on which registered
  ___________________________      __________________________________________

     Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 par value
                                (Title of class)

     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.....

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is met contained in this form,  and no disclosure  will be
contained,  to  the  best  of  registrant's   knowledge,   definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. ( )

State issuer's  revenues for its most recent fiscal year:

     Revenues for the fiscal year ended December 31, 2000 were $8,305,879.

     State the aggregate market value of the voting stock held by non-affiliates
computed  by  reference  to the  price at which  the  stock  was  sold,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act).
     Note;  if  determining  whether  a  person  is an  affiliate  will  involve
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the common  equity held by  non-affiliates  on the basis of  reasonable
assumptions, if the assumptions are stated.
     The aggregate market value of the voting stock held by non-affiliates as of
December 31, 2000 was $ 4,921,698

                         (ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS)

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d)of the  Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes .......No ....... N/A

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
     State the number of shares  outstanding of each of the issuer's  classes of
common equity as of the latest practicable date.


         Title of Each Class                      Number of Shares Outstanding
Common Stock, $.001 par value per share        1,812,127 as of December 31, 2000

                       DOCUMENTS INCORPORATED BY REFERENCE
     If the following documents are incorporated by reference,  briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated:  (1) any annual report to security  holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification  purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

    Transitional Small Business Disclosure Format (Check one): Yes.....No..x..
<PAGE>
PART 1

Item 1.  Business

         General development of business

         The Classica  Group,  Inc. (the  "Company") is a New York  corporation,
headquartered in Lakewood,  New Jersey.  The Company has currently two principal
business lines: (i) producing and importing  specialty cheeses and Italian foods
(the  "cheese  business")  and (ii)  providing  solutions  to serious  bacterial
problems  facing the food  industry  in  addition  to  providing  an  innovative
microwave  based  processing  system  designed  to maximize  productivity  while
reducing   operating  costs  in  food  processing  (the  "microwave   processing
business").

         Acquired Assets

         Effective  October 2, 2000 the  Company  acquired  a fully  operational
microwave-testing laboratory, and five patents registered with the United States
Patent office.  These five patents  together with the  proprietary  knowledge OF
Engineer Ruozi ACQUIRED  through over 25 years  experience in the application of
microwave  technology for use in the food industry hold the key to the Company's
success in the  microwave-processing  arena.  Additionally,  the Company has the
rights to several  additional  European patents,  pending  verification of their
viability.  Classica  Microwave  Technologies,  Inc.  ("CMT")  will  utilize the
laboratory under the direction of its chief engineer Giuseppe Ruozi.

         Discontinued business

         From  February  1996 through  March 2001,  the  Company's  wholly owned
subsidiary,  Deli King, Inc. sold products, some of which it prepared, to mobile
catering  truck  customers  as  well  as  provided  support  services  to  these
customers.  Deli King has incurred  substantial losses since its acquisition and
despite  recent  attempts  to curb such  losses  continued  to be  unprofitable.
Therefore,  at the end of 2000 the  Company  decided to  discontinue  its mobile
catering business.

         Description of business

         The Company's cheese business,  Cucina Classica Italiana, Inc. ("CCI"),
is engaged in the production,  importation  and  distribution of premium cheeses
and Italian foods, and is located at the Company's headquarters in Lakewood, New
Jersey.


                                       2
<PAGE>


         Classica Microwave  Technologies,  Inc. ("CMT") is the Company's newest
business. CMT will provide safe foods solutions, through its automated microwave
processing  systems  for  bulk &  processed  foods as well as  liquid  products.
Additionally,  CMT's systems extend the fresh refrigerated and non- refrigerated
shelf  life of food  products  without  the use of  chemical  assistance,  while
reducing  overall  operating,  inventory  storage  and  delivery  costs  without
sacrificing productivity.  CMT employs the engineer who has been a key developer
of this process and who is also one of the leading European experts in the field
of microwave technology as it applies to the food industry.  The unique marriage
of  microwave  technology  and  proprietary  knowledge  over years of research &
development and practical  application  allows CMT to enter the growing field of
food safety  processing  systems without the many costs specific to research and
development  the extensive time usually  necessary for system  design.  CMT will
utilize existing patents recently acquired by The Classica Group and will pursue
new patent filings for specific  additional  applications for the food industry.
This  technology  will provide  various  sources of revenues  including its core
business of food safety through the sales of microwave systems, the assisting of
manufacturers in product  development while cultivating  possible joint ventures
as well as potential acquisitions.
         Microwave  technology has long been used in the food industry as a form
of energy for various applications such as cooking and defrosting.  However, due
to the inability to control the  uniformity  of heating,  its use as a method to
insure  bacterial  safety  could not be trusted.  CMT's  system was  designed to
insure bacterial integrity through the use of microwave energy as a catalyst for
quick  heat  and  hot  air  as  a  guarantee  of  temperature  uniformity.  This
combination of microwave energy and hot air in a controlled  environment  allows
foods in an  atmospherically  controlled package to be pasteurized or sterilized
for consumer protection against bacterial intrusion. The system is controlled by
a PLC that eliminates the possibility of human error and allows each product its
own  pre-tested  program in the system.  The system also has its own  monitoring
program  that will alert an operator  to any  potential  malfunction  that could
jeopardize the pasteurization or sterilization process.

         Products

         The Cheese  Business.  CCI is a  producer  of  specialty  Italian-style
cheeses and Greek-style Feta and a major importer of Italian specialty  cheeses,
and Prosciutto di Parma (Italian ham). CCI distributes  its products  nationally
with its heaviest areas of  distribution  located on the East and West Coasts of
the United States.  Its customers are other importers and large distributors who
sell to smaller  distributors and retail  accounts.  Sixty five percent of sales
are food  service;  i.e.,  sales  to  restaurants,  catering  houses  and  other
businesses in the leisure industry.

                                       3
<PAGE>
         CCI  markets  Italian  specialty  and  Greek-style  Feta  cheeses.  Bel
Paese(R) is a semi-soft natural cheese,  manufactured in 5 lb. bulk wheels and 6
oz. mini wheels. In reply to customer demand,  several flavors such as Basil and
Sun-dried  Tomatoes,  Roasted Garlic, and Hot Red Pepper flavored Bel Paese have
been added to the line.  Greek-style  Feta cheese and Feta  flavored  with dill,
oregano,  sun-dried  tomatoes  and basil,  and with  peppercorn  are produced in
random and in exact weight  portions.  Freshly  grated and  shredded  Romano and
Parmesan  cheeses  are  also  produced  by CCI and  are  sold  both in bulk  for
institutional use and in consumer-sized cups. Dry grated Parmesan and Romano are
available in canisters under the Cucina Classica Italiana(R) brand. CCI annually
produces  approximately  300,000  pounds of Bel Paese(R)  and 150,000  pounds of
Feta.
         Galbani(R)   Mascarpone,   Gorgonzola   Dolcelatte   and  Bel  Paese(R)
Medallions are CCI's imported products.  750,000 pounds of Galbani Mascarpone, a
specialty  dessert cheese was imported in 2000. CCI imports more than 50% of the
nation's  imported  Mascarpone.  In 2000, the Company imported 250,000 pounds or
approximately  four and one half  million  individual  medallions  of Bel  Paese
Process Medallions, a soft, spreadable cheese.
         Procuitto di Parma and Gorgonzola Dolcelatte(R),  the Italian blue-mold
cheese, round out the line with 2000 imports of 35,000 pounds and 55,000 pounds,
respectively.
         CCI also  imports  Parmigiano  Reggiano,  Grana  Padano,  and  Pecorino
Romano,  which are sold in whole wheels,  pre-cut  portions or freshly grated in
deli cups.

         New Products and Expansion

         CCI is  continually  seeking  to  expand  its  product  line by  either
producing or  importing  new  products.  In 2000 CCI is assisted  S.p.A.  Egidio
Galbani ("Galbani") in a marketing project to determine if there is a market for
Galbani's  short shelf life products,  such as fresh  mozzarella,  in the United
States.  In addition,  with a view toward  decreasing its dependence on the food
service  industry,  CCI is currently  studying the  packaging of its products to
make them consumer friendly for the retail market.
         CMT's post packaging  microwave systems offer food safety advantages to
frozen,  fresh  refrigerated  and shelf stable food processors.  However,  fresh
refrigerated  and  shelf  stable  food  processors  will  benefit  from  all the
advantages of our technology.  Presently,  our pasteurization  applications have
been used for prepared foods,  fresh pastas,  breads,  juices and other liquids.
The  sterilization  applications  are presently  used for prepared meals and the
drying applications are being used for bakery and bread items.
         CMT is in the latter stages of designing  technically  advanced  drying
systems that will offer the meat  industry the ability to process cured meats at
a rate up to 10 times faster than the methods  being used today.  These  systems
will also have  applications  to both the  produce  and  vegetable  markets  for
sanification and drying.
         Additionally, other applications are being studied.


                                       4
<PAGE>

         Competitive Position

         CCI maintains a strong  presence in the Italian  specialty food market.
CCI offers  trade  promotions  to its major  customers,  provides  point-of-sale
materials to help product  sell-through  at the retail level,  offers  consumers
various  incentives  to buy its  products  and uses  consumer and trade media to
increase product awareness nationwide.
         We presently are not aware of any microwave-based  system that provides
pasteurization   or  sterilization   without  any  affect  on  the  organoleptic
properties of the finished product.  There are other forms of pasteurization and
sterilization  presently  being  used  and  accepted  by the  consumer.  Hot air
systems,  steam systems,  water systems and retort chambers offer pasteurization
and  sterilization  capabilities,  however,  CMT's microwave  system offers more
advantages  in one system than any other  individual  system.  These  advantages
include better organoleptic  characteristics on the product,  reduced processing
time, and reduced space  requirements,  higher  automation  level, less manpower
requirements and the use of cleaner energy.

         Product Line Exclusivity License & Trademark Agreements

         CCI is the  exclusive  U.S.  importer  of the  Galbani  line of Italian
specialty cheeses and meat products.  Egidio Galbani, S.p.A. of Milan, Italy, is
a major force in the European  Dairy Market with an annual sales volume of about
US$1.4  billion  dollars and is a subsidiary  of GROUPE  DANONE,  with an annual
sales volume of approximately US$15 billion dollars.
         CCI has the exclusive  right to import Galbani  products into the U.S.,
and is the only  company  worldwide  with the  license  to  manufacture  cheeses
bearing  the  Galbani  trademarks.   The  Product  Exclusivity  and  License  to
Manufacture  Agreements  are granted in a contract,  which runs through the year
2003 when it will be subject to renewal.
         CCI's  trademarks  are Cucina  Classica  Italiana(R),  Classika(R)  and
Tal-Fino(R).  CCI is currently  applying for the trademark Classica and uses the
(TM) symbol to denote its application.
         CMT will utilize five US patents purchased by the Company in October of
2000,  these patents have effective lives of at least 10 years,  and provide CMT
with exclusivity in marketing our technology.

         Government Regulations

         All of the Company's subsidiaries are  subject  to  regulations  of the
U.S. Department of Agriculture (USDA) and The U.S. Food and Drug  Administration
(FDA).
         The USDA establishes  regulations for cheese identity and also oversees
the importation of meat products into the U.S. The FDA regulates cheese labeling
and has  established  strict  guidelines  regarding  ingredients and nutritional
information.
         CMT's Pasteurization systems technology is presently being used in USDA
plants in the United  States.  CMT will proceed to work with  potential  clients
interested in  sterilization,  which will require  individual  product  approval
rather blanket approval of the equipment.

                                       5
<PAGE>

         Research & Development

         Research costs for CCI are minimal.  In recent years,  CCI has expended
research and development  costs related to developing new cheeses  (reduced fat,
spreadable  versions of current  semi-soft  cheeses,  new flavor  extensions  to
existing lines).
         CMT plans on allocating  substantial  resources to product  testing and
development.  It is estimated that several million dollars has been spent toward
the development and design of present systems.

         Cost and Effects of Compliance with Environmental Laws

         The costs and effects of  compliance  with  environmental  laws are not
material to our operations.

         Current Employees

         The Company and its subsidiaries currently employ 35 people of which 32
are full time.


Item 2.  Description of Property

         CCI leases a 20,000  square foot  facility at 1835  Swarthmore  Avenue,
Lakewood,  New Jersey 08701, of which  approximately 3,000 square feet serves as
office space. This facility serves as the Company CCI's  headquarters as well as
a cheese drying,  shredding and grating operation and warehouse. The facility is
a  fireproof  high bay  warehouse  located  on 3.5 acres  with  ample  expansion
potential.  The  warehouse  contains  13,000  cubic feet of cooler  space.  This
facility is leased at a basic rent of $7,665 per month or $91,980 annually.  The
lease was renewed in August 1999 for a five-year term with no rent escalation.

         CMT occupies a 2,000 square foot  product-testing  center  within CCI's
facility in  Lakewood,  New Jersey.  This center  houses CMT's  laboratory  size
microwave  pasteurization  and  sterilization  system and a kitchen equipped for
food  preparation.  This  product-testing  center will be used for food  product
development  under  pasteurization  or sterilization  for clients  interested in
purchasing  a  system,   joint  venture   interests  or  potential   acquisition
candidates.
         Deli King owns a 28,000  square  foot  building  on 3.88  acres in West
Warwick, Rhode Island. The facility is currently listed for sale.

                                       6
<PAGE>

Item 3.  Legal Proceedings

         There  currently are no material  legal  proceedings  by or against the
Company, or any of its subsidiaries.

Item 4.  Submission of Matters to a Vote of Security Holders

                  None

Part II

Item 5.  Market for Common Equity and Related Stockholder Matters

         The Company's common shares are traded on the  over-the-counter  market
through the NASDAQ Small Cap Market  Trading  System under the symbol TCGI.  The
following  table  sets  forth the range of high and low bid  quotations  for the
common  stock for the period  indicated,  as  reported by NASDAQ,  after  giving
effect to a retroactive  reverse  stock split of 1:5 effective  October 7, 1999.
The quotations are inter-dealer  prices in the  over-the-counter  market without
retail  mark-ups,  markdowns  or  commissions,  and  may  not  represent  actual
transactions.

                                      2000                           1999
                                  Common Shares                 Common Shares
        Period                 High            Low           High           Low
                        --------------------------------------------------------

January 1 - March 31        $9.2800          $1.5900       $9.0630       $4.2190

April 1 - June 30            8.2500           2.8800        5.0000        2.1880

July 1 - September 30        8.5000           4.2500        1.2500        1.0940

October 1 - December 31      7.9400           2.0000        1.9380        1.0000


         As of March 31, 2001 there were  approximately 240 holders of record of
the Company's common stock.  The Company has not  paid a  cash dividend  on  its
common stock since its inception.  The Company expects that  for the foreseeable
future, any earnings will be retained for use in the business or other corporate
purposes,  and it is not  expected  that cash or share  dividends  will be paid.
However,  there are no  restrictions  on the  payment  of  dividends,  either by
contract or regulation.

                                       7
<PAGE>

Item 6.  Management's Discussion and Analysis of Financial Condition and
                   Results of Operation

         The  following   discussion  and  analysis   contains   forward-looking
statements,  which involve risk and  uncertainties.  When used herein, the words
"anticipated,"  "believe,"  "estimate," and "expect" and similar  expressions as
they  relate to the Company or its  management  are  intended  to identify  such
forward-looking   statements  which  the  meaning  of  the  Private   Securities
Litigation  Reform Act of 1995.  The Company's  actual  results,  performance or
achievements  could differ  materially from the results  expressed or implied by
these forward-looking statements.
         Management's Discussion and Analysis of Financial Condition and Results
of  Operations  should  be read in  conjunction  with the  Audited  Consolidated
Financial Statements and related notes, which are contained in Item 7 herein.

         Results of Operations for the Years Ended December 31, 2000 and 1999

         Net sales for the year ended December 31, 2000 were $8,305,879 compared
with  $8,538,712 in 1999, a decrease of $232,833,  or 2.8%. This decrease is the
result of the loss of a  significant  group of  customers  of CCI in the leisure
services market (airlines and steamship  companies) for most of the year 2000. A
portion of those  customers have been reclaimed in the first quarter of 2001 and
management  feels  prospects  are good for the  recovery of that  segment of the
market.
         The Company  generated gross profit of $2,182,947 or 26.3% of net sales
in 2000 verses  $2,183,587 or 25.6% of net sales in 1999.  The increase in gross
profit  margin  was the result of CCI  continuing  to shift its  product  mix to
maximize profitability.
         Selling,  general  and  administrative  expenses  were  $1,929,240  and
$1,753,308  in 2000 and 1999,  respectively.  This  represents  an  increase  of
$175,932 or 2.1% of net sales. This increase is the result of increased costs at
the CCI  subsidiary  resulting  from the  expenditures  for  brand  design,  new
packaging,  sales  literature,  and  an  aggressive  incentive program for major
customers  undertaken  in the fourth  quarter of 2000 to generate  new sales for
2001.  Also  included  in SG&A are $68,400 of  start-up  costs of the  microwave
processing business.
         Income from continuing  operations for the year ended December 31, 2000
was $52,925 versus $201,002 in 1999. This represents a reduction of $148,077 due
to the factors discussed above.
         Interest expense was $200,782 and $229,277 for the years ended December
31, 2000 and 1999  respectively.  The decrease is the result of orderly pay-down
of the Company's term obligations.
         The Company  reported no  provision  for Federal  income  taxes for the
years ended  December 31, 2000 and 1999,  as the Company had net losses for both
years.

                                       8
<PAGE>

Liquidity and Capital Resources

         The Company's  sources of capital include,  but are not limited to, the
issuance of public or private  debt,  bank  borrowings,  capital  leases and the
issuance of equity securities.
         At  December 31, 2000,  the  Company  had  a  net  worth  of $2,790,126
compared to  $2,603,743  at December 31, 1999.
         The Company has limited  requirements  for capital  expenditures in the
immediate  future,  except for the start-up of the new CMT  subsidiary for which
the Company is planning a private placement.
         CCI's  factoring  arrangement  with  GMAC  Commercial  Credit,  LLC has
adequate availability to provide working capital to support sales growth in that
division.
          The Company  utilizes  capital leases for the acquisition of operating
assets at its subsidiaries when  appropriate.  At December 31, 2000, the Company
had capital leases with an unamortized balance of $250,703.
         Management  believes that the Company has sufficient working capital to
meet the needs of its current  level of  operations,  with the  exception of the
requirements of CMT.

Anticipated Future Growth

         New Business  - Classica Microware Technologies, Inc.

         Classica  Microwave  Technologies,  Inc.  ("CMT") is currently  testing
microwave-processing systems for use in food processing. CMT is anticipating the
delivery of its first  laboratory  system in early May of 2001. This system will
have the  ability to develop and test food  products  for  companies  looking to
ensure the bacterial  integrity of their products.  In addition,  CMT's engineer
has been  successful in designing a microwave  system  capable of drying various
food products.  We anticipate  installing a second  laboratory  system utilizing
this drying process.
         The  above  system  will  provide   longer   fresh   refrigerated   and
non-refrigerated  shelf life without dependency on additives or preservatives of
any  kind.  We will  also have the  ability  to  develop  new  products  for the
expansion of the product lines of our other companies.
         CMT expects to have several revenue sources including;  the development
of food  products  having  bacterial  integrity  and extended  refrigerated  and
non-refrigerated  shelf life, the sale of systems to food  processors  concerned
about the bacterial  integrity of their  products,  and strategic joint ventures
for product development and sales with existing food processors.
         Management  believes  that the future growth of the Company will be the
result  of five  efforts;  (1) the  operations  of the  Company's  new  Classica
Microwave  Technologies,  Inc.  subsidiary (2) acquisition of other companies in
the food and food related industries, (3) increasing sales to existing customers
by offering new products and product  lines,  (4) obtaining new customers in the
existing markets  developing new markets via current marketing  channels and the
internet,  and  (5)  controlling  and  containing   production,   operating  and
administrative costs.

                                       9
<PAGE>

Item 7.  Financial Statements

         Response  submitted as a separate section of this report  commencing on
page F-1.

Item 8.  Changes in and Disagreement With Accountants on Accounting and
               Financial Disclosure

         Effective  November 9, 2000, The Classica  Group, Inc.  (the "Company")
dismissed its prior  certifying  accountants, Deloitte & Touche LLP ("Deloitte")
and  retained  as  its  new  certifying  accountants,  Ehrenkrantz Sterling  and
Co., LLC  ("Ehrenkrantz").   Deloitte's  report   on  the   Company's  financial
statements  for the fiscal years ended December 31, 1998 and December 31,  1999,
which were the only  fiscal  years  during  which  Deloitte  was the  certifying
accountant  for  the  Company,  contained  no  adverse opinions or disclaimer of
opinions,  and   was   not   qualified  as  to  uncertainties,   audit  scopE or
accounting principles. The decision to change accountants was  approved  by  the
Audit  Committee  and the Board of  Directors  of the  Company.  As  required by
applicable rules of the Securities and Exchange Commission, the Company notified
Deloitte  that during the two most recent  fiscal  years and the interim  period
from  December 31, 1999 through  November 9, 2000 the Company was unaware of any
disputes between the Company and Deloitte as to matters of accounting principles
or practices, financial statement disclosure, or audit scope of procedure, which
disagreements,  if not  resolved to the  satisfaction  of  Deloitte,  would have
caused it to make a reference  to the  subject  matter of the  disagreements  in
connection  with its reports and  requested  Deloitte to confirm this, a copy of
which was filed with the Form 8-K.

         Effective  November 9, 2000,  the Company  engaged  Ehrenkrantz  as its
principle accountants. During the most recent fiscal year end and the subsequent
interim  periods to the date  hereof,  the Company  did not consult  Ehrenkrantz
regarding any of the matters or events set forth in item 304 (a) (2) and (i) and
(ii) of Regulation S-B.


                                       10
<PAGE>

 Part III.

Item 9.  Directors, Executive Officers, Promoters and Control Persons

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

Item 10. Executive Compensation

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

Item 11. Security Ownership of Certain Beneficial Owners and Management

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

Item 12. Certain Relationships and Related Transactions

     Incorporated  by reference  from the proxy  statement,  which will be filed
within 30 days of the filing of this report.

Item 13. Exhibits and Reports on Form 8-K


Exhibit No.          Description of Exhibit                                 Note

3. (a) - -  Certificate of Incorporation                                      1
   (b) - -  By-Laws, as amended                                               1
4. (a) - -  Form of Warrant Agency Agreement between Registrant Thomas        1
            James Associates, Inc. and American Stock Transfer & Trust
            Company with
            attached form of Warrant
   (b) - -  Form of Private Placement I Warrant                               1
   (c) - -  Form of Private Placement II Warrant                              1
   (d) - -  Form of Private Placement Warrant                                 1
10.(a) - -  Lease agreement between Saratoga Brands and Hoffman Investors     1
            Corp. dated August 18, 1992

                                       11
<PAGE>

   (b) - -  Amended Employment Agreement between Registrant and Daniel J.     1
            Feld dated January 26, 1994
   (c) - -  Option Agreement, as amended between Registrant and Daniel J.     1
            Feld respecting 77,949 (as adjusted) Common Shares
   (d) - -  Incentive Option Plan dated June 12, 1991                         1
   (e) - -  Form of Incentive Stock Option contract                           1
   (f) - -  Restricted Stock Purchase Agreement                               1
   (g) - -  Factoring Agreement dated October 23, 1992 between Saratoga       1
            Brands Inc. and Platinum Funding Corp.
   (h) - -  Form of Owner Operator distributor Agreement                      1
   (i) - -  Form of Agreement between the Company and holder of the 11%       1
            subordinated Notes and Warrants to purchase common shares
   (j) - -  Asset Purchase Agreement, dated as of January 5, 1994,            1
            between Saratoga Brands Inc. and Mellons Limited
   (k) - -  Voting and Limitation of Transfer Agreement between Daniel J.     2
            Feld, Registrant and Mellons, Limited.
   (l) - -  Amended and Restated Employment Agreement between Registrant      2
            and Daniel J. Feld
   (m) - -  Non-Compete Agreement between the Registrant and Agama, Inc.      2
   (n) - -  Non-Compete Agreement between Mellons Limited and the             2
            Registrant.
   (o) - -  Lease Agreement between Cucina Classica Italiana, Inc. and        3
            Arthur Sommers
   (p) - -  Lease Agreement between Cucina Classica Italiana, Inc. and        3
            Angelo Dominioni.
   (q) - -  Lease Agreement between JR's Delis, Inc. and Chicken by           3
            Chickadee Farms, Inc.
   (r) - -  Employment Agreement between the Registrant and Scott G.          3
            Halperin, dated August 16, 1995
   (s) - -  Acquisition Agreement between the Registrant and Cucina           4
            Classica Italiana, S.p.A.
   (t) - -  Acquisition Agreement between the Registrant and Goldberg,        5
            Feinstein and Sons Company
   (u) - -  Amendment to the Acquisition Agreement between the Registrant     6
            and Goldberg, Feinstein and Sons Company
   (v) - -  Credit Agreement between Cucina Classica Italiana, Inc. and       7
            Banca Nazionale del Lavoro S.p.A. - New York Branch, Istituto
            Bancario San Paolo di Torino - New York Branch, Banco di
            Sicilia S.p.A. -  New York Branch, Banca Populare di Milano -
            New York Branch, and  Banca Commerciale Italiana - New
            York Branch

                                       12
<PAGE>

   (w) - -  Termination  Agreement between the Registrant and Daniel J.       8
            Feld
   (x) - -  Merger and Real Estate Purchase Agreement Between the Company     9
            and Roy LaCroix for the purchase of Deli King, Inc.
   (y) - -  Credit Agreement between Cucina Classica Italiana, Inc.          10
            and Banca Nazionale del Lavoro S.p.A. - New York Branch,
            dated December 15, 1997
   (z) - -  Credit Agreement between Cucina Classica Italiana, Inc.          10
            and BancaCommerciale Italiana - New York Branch, dated
            December 15, 1997
  (aa) - -  Forgiveness Agreement between Cucina Classica Italiana,          10
            Inc. and Istituto Bancario San Paolo di Torino - New York
            Branch, dated December 29, 1997
  (ab) - -  Forgiveness Agreement between Cucina Classica Italiana, Inc.     10
            and Banca Populare di Milano - New York Branch, dated
            December 29, 1997
  (ac) - -  Forgiveness Agreement between Cucina Classica Italiana, Inc.     10
            and Banco di Sicilia S.p.A. - New York Branch, dated
            December 31, 1997
  (ad) - -  Settlement Agreement between Saratoga Brands, Inc., Angelo M.    10
            Dominioni, Valerie A. Dominioni, Silvana L. Dominioni,
            Robert J. Castellano, and Cucina Classica Italiana, SpA,
            dated December 31, 1997
  (ae) - -  Employment Agreement between the Registrant and Scott G.         10
            Halperin, dated August 1, 1997
  (af) - -  Employment Agreement between the Registrant and Bernard F.       10
            Lillis, Jr., dated August 1, 1997
  (ag) - -  Lease Agreement between Deli King, Inc. and Giovanni and Lina    10
            Conti, dated September 1, 1997.
  (ah) - -  Investment Banking Agreement between the Company and M.H.        10
            Meyerson and Co., Inc.
  (ai) - -  Agreement between the Company and OMAC Research, Ltd.            11

                                       13
<PAGE>

NOTES

     1. Filed with the  Company's  registration  statement on form S-1 (File No.
        33-36937), and incorporated herein.
     2. Filed with the  Company's  Form 8-K filed on  February  14,  1995,  and
        incorporated herein.
     3. Filed with the Company's 1994 Form 10-KSB, and incorporated herein.
     4. Filed with the Company's Form 8-K filed on November 4, 1994, and
        incorporated herein.
     5. Filed with the Company's Form 8-K filed on November 10, 1994, and
        incorporated herein.
     6. Filed with the Company's Form 8-K filed on March 28, 1995, and
        incorporated herein.
     7. Filed with the Company's Form 8-K filed on March 14, 1995, and
        incorporated herein.
     8. Filed with the Company's Form 8-K filed on August 18, 1994, and
        incorporated herein.
     9. Filed with the  Company's  Form 8-K dated April 29,  1996,  and
        incorporated herein.
    10. Filed with the Company's 1998 Form 10-KSB, and incorporated herein.
    11. Filed with the Company's Form 8-K filed on April 17, 2001, and
        incorporated herein.


         (b)      Reports on Form 8-K.

         Form 8-K filed on November 13, 2000
              Item 4.  Changes in Registrant's Certifying Accountant

                                       14
<PAGE>

                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

THE CLASSICA GROUP, INC.



By: /s/ Scott G. Halperin                             Date:   April 16, 2001
-----------------------------------
        Scott G. Halperin
        Chairman of the Board
        Chief Executive Officer


         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.



By:  /s/ Scott G. Halperin                            Date:   April 16, 2001
-----------------------------------
         Scott G. Halperin
         Chairman of the Board
         Chief Executive Officer
         Audit Committee Member

By:  /s/ Bernard F. Lillis, Jr.                       Date:    April 16, 2001
-----------------------------------
         Bernard F. Lillis, Jr.
         Chief Financial Officer
         Principal Accounting Officer
         Director

By:  /s/ Joseph M. Greene                             Date:   April 16, 2001
-----------------------------------
         Joseph M. Greene
         Director
         Audit Committee Member

By:  /s/ Harry J. Friedberg                           Date:   April 16, 2001
-----------------------------------
         Harry J. Friedberg
         Director
         Audit Committee Member

By:  /s/ Alan Rubin                                   Date:   April 16, 2001
-----------------------------------
         Alan Rubin
         Director


                                       15
<PAGE>

                    THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                                      INDEX



                              FINANCIAL STATEMENTS


Included in Part II


Reports of Independent Certified Public Accountants


Consolidated Balance Sheet at December 31, 2000


Consolidated Statements of Operations for the Years Ended December 31, 2000
     and 1999


Consolidated Statements of Cash Flows for the Years Ended December 31, 2000
     and 1999


Consolidated Statements of Changes in Stockholders' Equity for the Years Ended
     December 31, 2000 and 1999


Notes to Consolidated Financial Statements
<PAGE>

                          INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders of
The Classica Group, Inc.
Lakewood, New Jersey


We have  audited  the  accompanying  consolidated  balance sheet of The Classica
Group,  Inc. and Subsidiary  Companies (the  "Company") as of December 31, 2000,
and the related consolidated statements of operations,  changes in stockholders'
equity,  and cash flows for the year ended  December 31, 2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.  The financial  statements of the Company for the year ended December
31, 1999 before the restatement described in Note 3 to the financial statements,
were audited by other  auditors  whose report dated April 10, 2000  expressed an
unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial position of the Company at December 31, 2000,
and the results of its operations and its cash flows for the year ended December
31, 2000 in conformity with generally accepted accounting principles.

We also audited the adjustments described in Note 3 that were applied to restate
the  1999  financial  statements  to give retroactive effect to the discontinued
business segment. In our opinion, such adjustments are appropriate and have been
properly applied.


EHRENKRANTZ STERLING & CO., LLC

Livingston, New Jersey
April 16, 2001


                                      F-2
<PAGE>


                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders of
The Classica Group, Inc. and Subsidiaries
(formerly Saratoga Brands Inc. and Subsidiaries)
Lakewood, New Jersey


We  have  audited  the   accompaning   consolidated  statements  of  operations,
changes in stockholders'  equity, and cash flows of The Classica Group, Inc. and
Subsidiaries (formerly Saratoga Brands Inc. and Subsidiaries)(the "Company") for
the year ended  December  31, 1999 (none of which are  presented  herein.) These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our  opinion,  such consolidated   financial  statements  present  fairly, in
all material  respects,  the results of operations and cash flows of the Company
for the year ended  December  31, 1999 in  conformity  with  generally  accepted
accounting principles.


DELOITTE & TOUCHE LLP

Parsippany, New Jersey
April 10, 2000



                                      F-3
<PAGE>

                    THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                December 31, 2000


                                     ASSETS

Current Assets:
          Cash and cash equivalents                                     $31,104

          Accounts receivable                                           493,216

          Inventories                                                   435,398


          Prepaid expenses and other current assets                     152,415
                                                               -----------------

          Total current assets                                        1,112,133


Property and equipment, net                                             947,403

Intangible assets, net                                                1,739,828

Other assets                                                            392,489


Net assets from  discontinued operations                                637,610
                                                               -----------------

          TOTAL   ASSETS                                             $4,829,463
                                                               =================


               See notes to the consolidated financial statements.


                                      F-4
<PAGE>

                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                December 31, 2000


                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:

         Current portion of long-term debt                               81,720

         Accounts payable                                            $1,688,089

         Accrued expenses                                              $100,545
                                                                 ---------------

           Total current liabilities                                  1,870,354

Long-term debt, less current portion                                    168,983
                                                                 ---------------

         Total liabilities                                            2,039,337
                                                                 ---------------

         COMMITMENTS                                                         -

                              STOCKHOLDERS' EQUITY

         Preferred stock
         Class A participating convertible preferred shares, $1
         par value, stated at liquidation value, authorized 200
         shares of which 16.5 shares are issued and outstanding.        397,898

         Common stock
         $.001 par value, 25,000,000 shares authorized, 1,812,127
         issued and outstanding                                           1,812

         Additional paid-in-capital                                   3,114,104

         Accumulated deficit                                           (723,688)
                                                                 ---------------

         Total stockholders'equity                                    2,790,126
                                                                 ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $4,829,463
                                                                 ===============



               See notes to the consolidated financial statements.

                                      F-5
<PAGE>

                    THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations


                                                    Years Ended December 31,
                                        ----------------------------------------
                                                     2000                1999

Net sales                                       $ 8,305,879         $ 8,538,712

Cost of sales                                     6,122,932           6,355,125
                                        ----------------------------------------

Gross profit                                      2,182,947           2,183,587

Selling, general and administrative expenses      1,929,240           1,753,308
                                        ----------------------------------------

Income from operations                              253,707             430,279

Interest expense - net                              200,782             229,277
                                        ----------------------------------------

Income from continuing operations                    52,925             201,002

Discontinued operations
    Loss from operation of business segment      (1,439,147)         (1,324,725)

    Loss from disposal of business segment       (1,017,188)                 -
                                        ----------------------------------------

Net Loss                                       $ (2,403,410)       $ (1,123,723)
                                        ========================================


INCOME (LOSS) PER COMMON SHARE

BASIC & DILUTED

Income from continuing operations                    $ 0.04              $ 0.20

Discontinued operations                               (1.76)              (1.31)
                                        ----------------------------------------


Net Loss                                            $ (1.72)            $ (1.11)
                                        ========================================

Weighted average shares outstanding,
   basic and diluted                              1,396,284           1,009,333


               See notes to the consolidated financial statements.


                                      F-6
<PAGE>

                    THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows


                                                        Years Ended December 31,
                                                            2000         1999
                                                       -------------------------
Cash Flows from operating activities:
              Net loss                                 $(2,403,410) $(1,123,723)

Adjustments to reconcile net loss to net cash
         provided by operating activities:
              Loss from discontinued operations          1,439,147    1,324,725
              Loss on disposal of business segent        1,017,188           -
              Investment in discontinued operations       (888,455)    (330,862)
              Depreciation and amortization                213,143      250,741

Changes in operating assets and liabilities
              Accounts receivable                           10,484       30,860
              Inventories                                  (16,181)    (166,386)
              Prepaid expenses and other current assets    (27,929)     (55,077)
              Other assets                                  79,898     (115,001)
              Accounts payable and accrued expenses        (46,738)     826,923
                                                       -------------------------
              Net cash (used in) provided by operating
                 activities of continuing operations      (540,485)     642,200
                                                       -------------------------
Cash flows from investing activities:
              Additions to operating equipment            (107,424)    (405,914)
                                                       -------------------------

              Net cash used in investing activities       (107,424)    (405,914)

Cash flows from financing activities:
              Proceeds of Long term debt                        -       150,250
              Repayment of long term debt                 (110,076)    (615,742)
              Proceeds from capital leases                      -       228,125
              Repayment of capital leases                       -       (80,726)
              Proceeds from issuance of capital stock      617,878           -
                                                       -------------------------
              Net cash provided by (used in)
                 financing activities                      686,699     (318,093)

Decrease in cash and cash equivalents                      (43,576)     (81,807)

Cash discontinued operations                                48,130      (14,567)

Cash and cash equivalents, beginning of
   year-continuing operations                               26,550      122,924
                                                       -------------------------

Cash and cash equivalents, end of year                    $ 31,104     $ 26,550
                                                       =========================
Supplemental disclosure of cash flow information:

              Interest paid                               $199,910     $229,920
              Income taxes paid                                750        1,344

              Non-cash financing activities
                 The Company issued 301,094 shares of its common stock
                 for the acquisition of certain patents and testing
                 equipment during 2000.


               See notes to the consolidated financial statements.



                                      F-7
<PAGE>

                    THE CLASSICA GROUP, INC. AND SUBSIDIARIES
            Consolidated Statement of Changes in Stockholders' Equity
                     Years Ended December 31, 2000 and 1999
<TABLE>
<CAPTION>

                                 CLASS "A" PARTICIPATING
                                  CONVERTIBLE PREFERRED
                                --------------------------
                                                 AMOUNT
                                               STATED AT          COMMON SHARES           ADDITIONAL      RETAINED
                                              LIQUIDATION   ------------------------       PAID-IN        EARNINGS
                                SHARES           VALUE         SHARES        AMOUNT        CAPITAL        (DEFICIT)         TOTAL
                                ----------------------------------------------------------------------------------------------------
<S>                            <C>          <C>            <C>            <C>           <C>           <C>              <C>
Balance at December 31, 1998     16.5         $ 397,898      1,009,333      $ 1,009       $ 525,114     $ 2,803,445      $3,727,466

Net Loss                          -                  -              -            -               -       (1,123,723)     (1,123,723)
                                ----------------------------------------------------------------------------------------------------

Balance at December 31, 1999     16.5           397,898      1,009,333        1,009         525,114       1,679,722       2,603,743

Private Placement                 -                  -         200,000          200         299,800              -          300,000

Options exercised                 -                  -         301,786          302         496,473              -          496,775

Acquisition of Assets             -                  -         301,094          301       1,792,717              -        1,793,018

Net loss                          -                  -              -            -               -       (2,403,410)     (2,403,410)
                              ------------------------------------------------------------------------------------------------------

Balance at December 31, 2000     16.5         $ 397,898      1,812,213      $ 1,812     $ 3,114,104      $ (723,688)     $2,790,126
                              ======================================================================================================
<CAPTION>
</TABLE>
               See notes to the consolidated financial statements.

                                      F-8
<PAGE>

                    THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         NATURE OF BUSINESS
         The Classica  Group,  Inc.  (the  "Company")  is a holding  company and
through its subsidiary  companies is a national distributor of specialty cheeses
and Italian meat products,  and provides solutions to serious bacterial problems
facing the food industry in addition to providing an innovative  microwave based
processing  system designed to maximize  productivity  while reducing  operating
costs  in  food  processing.  A  majority  of  the  Company's customers are food
retailers and distributors

         FINANCIAL STATEMENT PRESENTATION
         The accompanying consolidated financial statements include the accounts
of  the  Company  and  its  wholly  owned  subsidiary  companies.  All  material
intercompany and transactions have been eliminated.

         USE OF ESTIMATES
         The  preparation of financial  statements in conformity  with generally
accepted  accounting   principles  require  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

         Revenue recognition AND FINANCIAL STATEMENTS
         Net sales are recognized at the time products are shipped to customers.

         In December 1999, the Securities and Exchange  Commission  (SEC) issued
SEC Staff  Accounting  Bulletin  (SAB) No. 101 Revenue  Recognition in Financial
Statements, SAB 101 summarizing certain of the SEC's views in applying generally
accepted  accounting  principles to revenue  recognition in financials.  SAB 101
will be effective  for the Company in the first  quarter of fiscal year 2001.The
Company is reviewing the requirements of SAB 101 and currently believes that its
revenue recognition polity is consistent with the guidance of SAB 101.

         COST OF SALES
         Cost of sales  consists of direct  costs to  purchase,  process and /or
produce and distribute product.  Direct costs relate primarily to purchasing and
importing  Italian cheese and meat products.  Also, to process (drying,  grating
or  shredding) and package various cheese products.

         CASH EQUIVALENTS AND MARKETABLE SECURITIES
         The Company  considers all highly liquid  investments  with an original
maturity of three months or less when purchased to be cash equivalents.

         ADVERTISING COSTS
         The Company  expenses all  advertising  costs as incurred.  The Company
incurred  approximately  $7,462  and $6,769 in  advertising  costs for the years
ended December 31, 2000 and 1999, respectively.

         DEFERRED FINANCING COSTS
         Deferred  financing  costs are amortized  utilizing the interest method
over the life of the related indebtedness.

                                      F-9
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         INVENTORIES
         Inventories  consist of raw materials  used in production  and finished
goods and are carried at the lower of cost or market.  Cost is  determined  on a
first-in, first-out method.

         Inventories at December 31, 2000 consist of:

              Raw materials                             $173,071
              Finished goods                             262,327
                                                       ---------
              Total inventory                           $435,398
                                                       =========


         PROPERTY, PLANT AND EQUIPMENT
         Property,  plant and  equipment are carried at cost,  less  accumulated
depreciation and amortization  computed on a straight-line basis over the lesser
of the estimated  useful lives of the assets  (generally  three to ten years for
equipment,  furniture, and leasehold improvements; and thirty-seven and one-half
years for buildings) or the lease term.

         GOODWILL AND INTANGIBLE ASSETS
         Patents are amortized over their estimated  useful lives,  which ranges
from 1 to 20 years.  Intangible  assets are  reviewed  for  impairment  whenever
events or circumstances  indicate  impairment might exist, or at lease annually.
Goodwill  represents the excess of the fair value of the net assets  acquired in
acquisitions by the Company,  and is being amortized on the straight-line method
over 10  years.  The  Company  assesses  the  recoverability  of its  assets  by
comparing projected undiscounted cash flows associated with those assets against
their respective carrying amounts. Impairment, if any, is based on the excess of
the carrying amount over the fair value of those assets.

Intangible   assets  consists  of  the  following  at December 31, 2000:

                   Goodwill                       $  300,000
                   Patents                         1,552,328
                                                  ----------
                                                   1,852,328
                   Accumulated Amortization         (112,500)
                                                  ----------

                   Intangible assets, net         $1,739,828
                                                  ==========

         Amortization of intangibles was $87,267 and $87,267 for 2000  and  1999
respectively.

                                      F-10
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         CONCENTRATION OF RISK
         Approximately  50%  of  the  Company's  purchases  originate  from  one
supplier under an exclusive contract, which expires in 2003.
         The Company maintains its cash with various financial institutions. The
Company performs  periodic  evaluations of the relative credit standing of these
institutions.

         LONG-LIVED ASSETS
         In  accordance  with SFAS No.  121  Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-  Lived  Assets to be  disposed  of,  long-lived
assets to be held and used by the Company are reviewed to  determine  whether an
event of change in circumstances indicated that the carrying amount of the asset
may not be recoverable.  For long-lived  assets to be held and used, the Company
bases its evaluation on such  impairment  indicators as the nature of the asset,
the  future   economic   benefit  of  the  assets,   any  historical  or  future
profitability  measurements,  as well as other  external  market  conditions  or
factors that may be present. If such impairment  indicators are present or other
factors exist that  indicate  that the carrying  amount of the assets may not be
recoverable,  the Company determines whether impairment has occurred through the
use of undiscounted  cash flows analysis of assets at the lowest level for which
identifiable  cash  flows  exist.  If  impairment  has  occurred,   the  Company
recognizes  a loss  for the  difference  between  the  carrying  amount  and the
estimated  value of the  asset.  The fair value of the asset is  measured  using
discounted  cash flow analysis or other  valuation  techniques.  Management  has
determined  that there is no impairment of assets in the continuing  segments of
the business.  No impairment  expense was  recognized in the year ended December
31, 2000.

         CERTAIN TRANSACTIONS INVOLVING STOCK COMPENSATION
         In  March  2000,  FASB  issued  FASB  Interpretation  NO.44  (FIN  44).
Accounting   for   Certain   Transactions   Involving   Stock   Compensation--An
Interpretation  of APB  Opinion  No. 25. FIN 44  clarifies  the  following:  the
definition  of an employee  for  purposes  of  applying  APB opinion No. 25; the
criteria for determining whether a plan qualifies as a noncompensatory plan; the
accounting consequence of various modifications to the terms of previously fixed
stock  options  or  awards;   and  the  accounting  for  an  exchange  of  stock
compensations  awards in a business  combination.  FIN 44 is  effective  July 1,
2000,  but certain  conclusions in FIN 44 covers  specific  events that occurred
after either  December 15, 1998 or January 12, 2000.  Management does not expect
the application of FIN 44 to have a material  impact on the Company's  financial
position or results of operations.

         INCOME TAXES
         The Company  accounts for income taxes in accordance  with Statement of
Financial  Accounting  Financial  Standards No. 109  Accounting for Income Taxes
(SFAS  109).  Under the asset and  liability  method of SFAS 109,  deferred  tax
assets and liabilities are recognized for future tax  consequences  attributable
to differences  between the financial  statements  carrying  amounts of existing
assets and liabilities and their respective tax bases and operating loss and tax
credit  carry-forwards.  Deferred tax assets and  liabilities are measured using
enacted  tax rates  expected  to apply to  taxable  income in the years in which
those temporary differences are expected to apply to taxable income in the years
in which those  temporary  differences are expected to be recovered and settled.
Under SFAS 109,  the effect of a change in tax rates on deferred  tax assets and
liabilities  is  recognized  in income in the period that includes the enactment
date.


                                      F-11
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         BUSINESS SEGMENTS
         The Company has  adopted  FASB  Statement  No.  131,  Disclosure  About
Segments of an Enterprise and Related Information,  which establishes  standards
for disclosure  about products,  geographic and major  customers.  The Company's
implementation  of this  standard  does  not have any  effect  on its  financial
statements.


         EARNINGS PER COMMON SHARE
         The Company adopted Statement of Financial Accounting Standards No. 128
Earnings  Per Share  (SFAS 128).  Under SFAS 128  earnings  per common  share is
computed by dividing net income (loss)  available to common  shareholders by the
weighted-average  number of common shares outstanding during the period. Diluted
earnings  per share do not reflect the  potential  dilution  that could occur if
securities or other contracts to issue common shares were exercised or converted
into common shares or resulted in the issuance of common shares as the impact of
such would be antidilutive given the net losses incurred.


NOTE 2 - Property and equipment

          Property and equipment consists of the following at December 31, 2000:


         Furniture & equipment                             $1,445,715

         Leasehold Improvements                                69,197
                                                            ---------
              Total cost                                    1,514,912

         Less accumulated depreciation and amortization      (567,509)
                                                            ---------
                                                             $947,403
                                                            =========

NOTE  3 - DISCONTINUED OPERATIONS AND RESTATEMENT OF FINANCIAL STATEMENTS

     On December 28, 2000 the company  adopted a formal plan to discontinue  the
operations of its Deli King, Inc.  ("Deli King") mobile catering  subsidiary and
to dispose of the assets of the business segment.  The anticipated disposal date
is approximately  May 1, 2001. The assets of the Deli King subsidiary to be sold
consist  primarily  of  inventories,   catering  routes,   property,  plant  and
equipment.

     The  estimated  loss of the  disposal  of the  discontinued  operations  of
$1,017,188  represents  the estimated loss on the disposal of the assets of Deli
King,  and a provision  of $100,000  for expected  operating  losses  during the
phase-out period from January 1, 2001 through May 1, 2001.

     Operating  results of Deli King  subsidiary for the year ended December 31,
2000 are shown  separately  in the  accompanying  income  statement.  The income
statement for 1999 has been restated and operating  results of the Deli King are
also shown separately.

     Net  sales of Deli King for 2000 and 1999 were  $2,426,028  and  $3,204,414
respectively.  These  amounts are not included in net sales in the  accompanying
financial statements.

     Net Assets to be disposed of, at their expected net realizable values, have
been  separately  classified in the  accompanying  balance sheet at December 31,
2000.

                                      F-12
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

NOTE 4 - OTHER ASSETS

         Other assets consist of the following at December 31, 2000:

Restricted cash relating to amounts                        $341,382
    owed to a major supplier
Accounts and notes receivable                                 5,000
Deposits                                                     45,012
Other                                                         1,095
                                                 -------------------

Total                                                      $392,489
                                                 ===================


NOTE 5 - LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL LEASES

         The  Company  has  seven  capital  leases  requiring  monthly  payments
totaling $8,652  including  interest  between 9.0% and 13% and maturing  through
February 2004.

         The  machinery and  equipment  under capital  leases have a capitalized
cost of $636,816 less accumulated depreciation of $176,084.

The  following is the schedule of future  minimum  payments  required  under the
leases together with the Present value as of December 31, 2000:


                        Years Ending
                        December 31,                          Amount

                            2001                            $ 106,442
                            2002                              100,079
                            2003                               76,599
                            2004                               12,478
                                                       ----------------
Total minimum lease payments                                  295,598
Less: amount representing interest                            (44,895)
                                                       ----------------
Present value of net minimum lease
     payments including current
     maturities of $81,720                                  $ 250,703
                                                       ================

                                      F-13
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


NOTE 6 - FEDERAL AND STATE INCOME TAXES

         The  Company  has  available  net  operating  loss   carryforwards   of
approximately  $6,805,000  for federal and state income taxes  expiring  between
2008 and 2020 to offset future taxable income.
         A  deferred  tax  asset  results  from the  benefit  of  utilizing  net
operating loss  carryforwards  in future years.  A valuation  allowance has been
provided for the entire benefit.
         During the years ended  December 31, 2000 and 1999, the increase in the
valuation  allowance  was  $510,740  and $94,152,  respectively.  These  charges
reflect increases in the valuation allowance related to the deferred tax asset.
         The Company will continue to assess the  recoverability of its deferred
income  tax  asset  and  adjustments  may be  necessary  based  on the  evidence
available at that time.



NOTE 7-- COMMITMENTS

         Factoring Agreement

         The Company is a party to a factoring  agreement  with  GMAC Commercial
Credit,  LLC (GMAC)  through  June 15,  2001.  The Company is required to factor
substantially all of its trade receivables on a non-recourse basis in return for
immediate cash credit for a major portion of these factored  receivables as well
as a portion of the finished  goods  inventory.  The  factoring fee is 1% of the
invoice  amount  and 1% over prime on the amount  advanced  under the  factoring
agreement. The prime rate was 9.5% at December 31, 2000. The factoring agreement
provides  The  Company  with an ability to receive  advances  collateralized  by
invoices  and  inventory  of $2.0  million  and  letters  of  credit in favor of
suppliers  of an  additional  $1.0  million.  The Company has pledged all of its
accounts  receivable,  inventories,  real estate and equipment as collateral for
this credit agreement.

          Investment Banking Agreement

         The  Company  operates  under and  investment-banking  agreement  which
provides  investment-banking  services to the  Company  and expires in 2002.  In
connection with the agreement,  the Company granted warrants to purchase  16,667
shares of the  Company's  common  stock at a price of $7.50 per share and 16,667
shares at a price of $9.00 per share, a total of 33,334 shares. The warrants are
fully vested.


          Operating Leases

         The Company leases a distribution and office facility in Lakewood,  New
Jersey under a lease expiring in August 2004 and requiring an annual  commitment
of  approximately  $92,000.  The lease  provides  that the Company  pays certain
operating  expenditures of the facility.  A renewal option exists. Rent expenses
totaled $118,679 and $114,168 in 2000 and 1999 respectively.

<PAGE>

Minimum future commitments under all operating leases are as follows:


                      Year Ended
                      December 31,                         Amount
                     -------------                     ------------

                         2001                             $ 91,975
                         2002                               91,975
                         2003                               91,975
                         2004                               61,317
                                                        ===========
                                                         $ 337,242
                                                        ===========


         Litigation

         There  currently are no material  legal  proceedings  by or against the
Company, or any of its subsidiaries.



                                      F-14
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

NOTE 8 - STOCK PLANS

         The Company's  1998  Incentive and  Nonqualified  Stock Option Plan was
amended in 1999 to provide  for the  granting  of  options to  purchase  600,000
shares of common stock to certain employees of the Company. Exercise and vesting
terms for options granted under this plan are determined at each grant date. All
options were  granted at not less than fair market  value at dates of grant.  At
the end of 2000,  457,540  options were  available  for grant under the plan and
reserved for issuance  under the 1998  Incentive and  Nonqualified  Stock Option
Plan.

         The Company's 1998 Director Stock Option Plan provides for the granting
of options to purchase 40,000 shares of common stock to certain directors of the
Company.  Exercise  and vesting  terms for options  granted  under this plan are
determined  at each grant date.  All options  were granted at not less than fair
market  value  at dates  of  grant.  At the end of  2000,  13,000  options  were
available  for grant  under the plan and  40,000  shares  of common  stock  were
reserved for issuance under the 1998 Director Stock Option Plan.

         SFAS No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123")
was effective for the Company for fiscal 1998. SFAS No. 123 encourages (but does
not  require)  compensation  expense to be  measured  based on fair value of the
equity instrument  awarded.  In accordance with APB No. 25 "Accounting for Stock
Issued  to  Employees"  no   compensation   cost  has  been  recognized  in  the
Consolidated  Statements of Operations for the Company's  stock option plans, as
all options have been  granted to  employees  and  non-employee  directors  with
exercise prices equal to or greater than the fair market value of the underlying
stock on the date of grant. If compensation  cost for the Company's stock option
plans had been determined in accordance with the fair value method prescribed by
SFAS No.  123,  the  Company's  net  (loss)  would  have been  $(2,904,466)  and
$(1,581,174) for 2000 and 1999, respectively. Diluted loss per share, would have
been  $(2.08)  and  $(1.57)  for 2000 and  1999,  respectively.  This pro  forma
information  may not be  representative  of the amounts to be expected in future
years as the fair value method of accounting  prescribed by SFAS No. 123 has not
been applied to options granted prior to 1996.



                                      F-15
<PAGE>

                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Stock options transactions are summarized as follows:
<TABLE>
<CAPTION>


                                       2000 Options             2000 Warrants            1999 Options            1999 Warrants
                                                Weighted                  Weighted                Weighted                Weighted
                                                 Average                   Average                 Average                 Average
                                                Exercise                  Exercise                Exercise                Exercise
                                     Shares        Price        Shares       Price        Shares     Price     Shares        Price
-----------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>            <C>         <C>          <C>          <C>         <C>      <C>            <C>
Outstanding, beginning of year      606,349        $4.44       107,967      $10.43       100,889     $4.44    107,967        10.43

Granted                             222,017         1.25            -           -        505,460      1.25

Exercised                          (247,500)        3.75

Forfeited                            (8,017)          -             -           -                             (16,667)        3.75
-----------------------------------------------------------------------------------------------------------------------------------


Outstanding, end of year            572,849        $1.83       107,967      $10.43       606,349     $1.83     91,300       $11.65
                               ====================================================================================================

Options and warrants
   exercisable at year-end          572,849        $1.83       107,967      $10.43       601,016     $1.83     92,967       $11.65
                               ====================================================================================================

Weighted-average fair value of       $ 1.81                                               $ 0.88
   options granted during the year
<CAPTION>
</TABLE>

The  following  table  summarizes  stock  options and warrants  outstanding  and
exercisable at December 31, 2000:


                              Weighted      Outstanding         Exercisable
                              Average               Average              Average
   Exercise       Options &  Remaining  Options &  Exercise Options &   Exercise
  Price Range     Warrants     Life     Warrants    Price   Warrants       Price
--------------------------------------------------------------------------------
$ 1.25   $ 5.00    602,350     7.42      602,349   $ 1.75    597,016      $ 1.75
  6.25     8.75     49,733     3.18       49,734      7.45    49,734        7.45
  9.00    12.50     43,066     2.30       43,066      9.88    43,066        9.88
 16.80    20.00      2,500     2.00        2,500     16.80     2,500       16.80
--------------------------------------------------------------------------------
                   697,649     6.78      697,649    $ 2.71   692,316      $ 2.71
                  =========             =========           =========

         The fair value of each option  granted is estimated on the date of each
grant using the Black-Scholes  option-pricing  model with the following weighted
average  assumptions used for grants in 2000 and 1999,  respectively:  risk free
interest  rate 5.5% and  5.5%;  expected  life 3 years  and 10  years;  expected
volatility  of 62% and  180.3%;  dividend  yield  0% and  0%.  The  fair  values
generated  by the  Black-Scholes  model  may  not be  indicative  of the  future
benefit, if any, which may be received by the option holder.

                                      F-16
<PAGE>
                   THE CLASSICA GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


Note 9 -- SEGMENT REPORTING

         The Company adopted  Statement  Financial  Accounting  Standard No.131,
"Disclosures about Segments of an Enterprise and Related Information (SFAS 131),
in 1998.

         The accounting policies of the operating segments are the same as those
described  in the  summary  of  significant  accounting  policies.  There are no
material inter-segment sales or transfers. All revenues are generated within the
United States and all revenue-producing assets are located therein.

Management  evaluates  a  segment's  performance  based upon profit or loss from
operations before income taxes.

Industry segment information is summarized as follows:

                                   Total Revenues           Operating Profits
                                  2000        1999         2000          1999
--------------------------------------------------------------------------------
CCI                          $ 8,295,163  $ 8,557,437   $ 741,037   $ 1,079,757
CMT                                   -            -      (68,408)           -
--------------------------------------------------------------------------------
   Total Segment               8,295,163    8,557,437     672,629     1,079,757

Eliminations and other
corporate income(expenses)        10,716      (18,725)   (418,922)     (649,478)
--------------------------------------------------------------------------------
Consolidated                 $ 8,305,879  $ 8,538,712     253,707       430,279
                            ===========================
Interest expense                                          200,782       229,277
                                                       -------------------------
Consolidated (loss) income from continuing
   operations before income taxes                        $ 52,925     $ 201,002
                                                       =========================

                                       Depreciation and        Identifiable
                Capital Expenditures Amortization Expense         Assets
                    2000      1999      2000      1999       2000         1999
CCI              $ 78,447  $405,915  $249,166  $180,063  $1,756,890  $ 2,178,099
CMT                34,000        -         -         -       34,000           -
Corporate         245,667        -     31,244    30,000   2,400,963      570,101
Discontinued Op.       -         -         -         -      637,610      637,610
               -----------------------------------------------------------------
Consolidated     $358,114  $405,915  $280,410  $210,063  $4,829,463  $ 3,385,810
               =================================================================


NOTE 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS

         The fair value of a financial instrument represents the amount at which
the  instrument  could be exchanged  in a current  transaction  between  willing
parties,  other than a forced sale or liquidation.  Significant  differences can
arise between the fair value and carrying amount of financial  instruments  that
are recognized at historical cost amounts.  The Company in estimating fair value
disclosures   for  financial   instruments   used  the  following   methods  and
assumptions:

o    Cash and cash equivalents,  trade  receivables,  short-term  borrowings and
     current   maturities  of  long-term  debt:  the  amounts  reported  in  the
     consolidated balance sheet approximate fair value.

o    Long-term  debt:  The amount  reported in the  consolidated  balance  sheet
     approximates fair market value, since such debt was primarily variable rate
     debt.

                                      F-17