UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

Annual report pursuant to Section 13 or 15(d) of the Securities  Exchange Act of
1934, as amended For the fiscal year ended September 30, 2000

                         Commission File Number 0-27842

                                  Colmena Corp.
               (Name of Small Business Registrant in its charter)

    Delaware: (State or other jurisdiction of incorporation or organization)

               54-1778587: (I.R.S. Employer Identification Number)

               2500 North Military Trail, Suite 225-D; Boca Raton,
                  Florida 33431 (Address of principal executive
                           offices including zip code)

                 (561) 998-2031 (Registrant's telephone number)

                Not Applicable (Former address of the Registrant)

           Securities registered under Section 12(b) of the Act: None

                            Title of each class: None
                Name of each exchange on which registered: None

              Securities Registered under Section 12(g) of the Act:
                 Common Stock, $0.01 par value (Title of Class)

     Check whether the Registrant (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934, as amended,  during
the past  twelve  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: (All reports prior to report date (September
30, 2000) have been filed,  but not reports due  subsequennt  to the report date
but prior to the date of actual filing.Yes [_] No [x]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the best of the  Registrant's  knowledge,  in 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  Registrant's  revenues  for its most recent  fiscal year: $ 0 (for
year ended September 30, 2000)

     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,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days:  $1,122,671  based on a last  transaction  price of $0.10 as of August 31,
2001, there being  11,226,711  shares of common stock held by persons other than
officers, directors or control persons of the Registrant on such date.

     State the number of shares outstanding of each of the Registrant's  classes
of equity, as of the latest practicable date: 19,975,212 shares of common stock,
as of August 31, 2001.




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                             Available Information.

     The public may read and copy any materials filed by the Registrant with the
Commission  at the  Commission's  Public  Reference  Room at 450  Fifth  Street,
Northwest,  Washington,  D.C.  20549.  The public may obtain  information on the
operation  of  the  Public   Reference   Room  by  calling  the   Commission  at
1-800-SEC-0330. The Commission maintains an Internet site that contains reports,
proxy and information statements, and other information regarding the Registrant
and other  issuers  that file reports  electronically  with the  Commission,  at
http://www.sec.gov.

                       Documents Incorporated by Reference

     Portions of the following documents previously filed by the Registrant with
the Commission are incorporated by reference in this report, all as permitted by
Rule 12b-23 promulgated under authority of the Securities  Exchange Act of 1934,
as amended ("Commission Rule 12b-23").

1.   Forms 10-KSB for the years ended  September  30, 1998,  and  September  30,
     1999, Items 1 and 2.

2.   Form 8-K for report date of June 25, 2001 [Items 4, 5 and 7(c)].

3.   Forms 10-QSB for the calendar  quarters  ended December 31, 1998, and March
     31, 1999 [Item 5]

4.   Registration  statement on Form S-8 filed with the  Commission on March 16,
     1998.

                 Caveat Pertaining to Forward Looking Statements

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor" for  forward-looking  statements.  Certain of the  statements  contained
herein,  which are not historical  facts,  are  forward-looking  statements with
respect to events,  the  occurrence of which  involve  risks and  uncertainties.
These  forward-looking   statements  may  be  impacted,   either  positively  or
negatively,  by various factors.  Information  concerning potential factors that
could affect the  Registrant is detailed  from time to time in the  Registrant's
reports  filed  with the  Commission.  This  report  contains  "forward  looking
statements" relating to the Registrant's current expectations and beliefs. These
include statements concerning operations,  performance,  financial condition and
anticipated  growth. For this purpose,  any statements  contained in this Annual
Report  and  Form  10-KSB  that  are  not  statements  of  historical  fact  are
forward-looking  statements.  Without  limiting the generality of the foregoing,
words  such as  "may",  "will",  "expect",  "believe",  "anticipate",  "intend",
"could",  "estimate",  or "continue", or the negative or other variation thereof
or comparable terminology are intended to identify  forward-looking  statements.
These  statements by their nature involve  substantial  risks and  uncertainties
which are beyond the Registrant's control.  Should one or more of these risks or
uncertainties  materialize  or should the  Registrant's  underlying  assumptions
prove incorrect,  actual outcomes and results could differ materially from those
indicated in the forward looking statements.

                                     Context

     The information in this report is qualified in its entirety by reference to
the entire report; consequently,  this report must be read in its entirety. This
is  especially  important  in light of  material  subsequent  events  disclosed.
Information  may  not  be  considered  or  quoted  out  of  context  or  without
referencing  other  information  contained in this report  necessary to make the
information considered, not misleading.

                                     Page 2


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                                Table of Contents

Part      Item     Page
Number  Number  Number  Caption

I        1       3    Description of Business
         2       3    Description of Property
         3       3    Legal Proceedings
         4       3    Submission of Matters to Security Holders

II       5       4    Market for Common Equity and Related Stockholder Matters
         6      10    Management's Discussion and Analysis and Plan of Operation
         7    F1-F16  Financial Statements
         8      13    Changes   In   and  Disagreements  With   Accountants   on
                        Accounting and Financial Disclosure

III      9      13    Directors,  Executive  Officers,   Promoters  and  Control
                        Persons
         9      15    Compliance With Section 16(a) of the Exchange Act
         10     16    Executive Compensation
         11     19    Security  Ownership  of  Certain  Beneficial  Owners   and
                        Management
         12     23    Certain Relationships and Related Transactions
         13     25    Exhibits and Reports on Form 8-K

Signatures

Additional Information

Exhibits


                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

     In  response  to this item,  our  Company  incorporates  by  reference  its
response  to Item 1 of its  report on Form  10-KSB  for the  fiscal  year  ended
September 30, 1998, and further  supplements  this response by  incorporating by
reference  its  response  to Item 1 of its report on Form  10-KSB for the fiscal
year ended September 30, 1999, as permitted by Commission Rule 12b-23.

ITEM 2.   DESCRIPTION OF PROPERTY.

     In  response  to this item,  our  Company  incorporates  by  reference  its
response  to Item 2 of its  report on Form  10-KSB  for the  fiscal  year  ended
September 30, 1998, as permitted by Commission Rule 12b-23.

ITEM 3.   LEGAL PROCEEDINGS.

     In  response  to this item,  our  Company  incorporates  by  reference  its
response to Item 1 of its report on Form 10-QSB for the quarter  ended  December
31, 1998, and further  supplements  this response by  incorporating by reference
its  response  to Item 3 of its report on Form  10-KSB for the fiscal year ended
September 30, 1999, as permitted by Commission Rule 12b-23.

ITEM 4.   SUBMISSION OF MATTERS TO SECURITY HOLDERS.

     Our Company did not submit any matter to a vote of security  holders during
its fiscal year ended September 30, 2000, and does not anticipate submitting any
matters to a vote of securities holders until it becomes current in  filing  its

                                     Page 3


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periodic reports with the Commission  (currently  expected to be completed on or
about September 30, 2001). Our Company understands that certain stockholders may
seek to take action  increasing its authorized  capital stock by written consent
in lieu of a meeting, if such stockholders can meet the requirements of Delaware
law  as  well  as the  exemptive  provisions  of  Commission  Rule  14a-2(b)(2),
pertaining  to exempt  proxy  solicitations, without  triggering  Schedule  14-C
information schedule dissemination requirements.


                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information.

     During the report  period,  our  Company's  common  stock was traded in the
over-the-counter  market and quoted in what are commonly referred to as on the "
Electronic  Pink  Sheets,"  which  report  quotations  by  brokers or dealers in
particular  securities,  and on the  over-the-counter  electronic bulletin board
operated by NASD (the "OTC Bulletin Board").  Bid, offer and transaction  report
prices for our Company's  common stock were  available  through the OTC Bulletin
Board under the symbol CLME until the fiscal  calendar  quarter  that started on
October 1, 1999. On October 29, 1999,  due to the failure of our Company to file
periodic  reports with the  Commission  on a timely  basis,  the NASD  precluded
brokers or dealers in  securities  from using the OTC Bulletin  Board to publish
quotes for our Company's securities.

     Because of the lack of readily available quotations and the limited trading
volume  frequently  associated  with  over-the-counter  securities,  there  is a
greater risk of market  volatility of such securities than for securities traded
on  national  exchanges.  The  following  over-the-counter   quotations  reflect
inter-dealer prices, without retail mark-up, mark- down, or commissions, and may
not necessarily  represent actual  transactions.  The range of the reported high
and low bid quotations have been derived  primarily from  information  quoted on
the OTC Bulletin Board and the Electronic Pink Sheets.  The following table sets
forth the  quarterly  high and low bid  prices  (to the  nearest  $0.125) of our
Company's  common stock for the years ended September 30, 1999 and September 30,
2000, and as a material subsequent event, through June 30, 2001.

Year Ended September 30, 1999
-----------------------------                           High             Low
                                                     Transaction     Transaction
                                 High       Low        Price            Price
                                 ----       ----       ----              ----
First Quarter                    $1.38     $1.00      $1.375          $0.125
Second Quarter                   $0.25     $0.09      $0.25           $0.937
Third Quarter                    $0.14     $0.09      $0.14           $0.07
Fourth Quarter                   $0.13     $0.08      $0.13           $0.08

Year Ended September 30, 2000
-----------------------------                           High             Low
                                                     Transaction     Transaction
                                 High       Low        Price            Price
                                 ----       ----       ----            -----
First Quarter                    $0.09     $0.01      $0.09           $0.01
Second Quarter                   $0.09     $0.02      $0.09           $0.015
Third Quarter                    $0.08     $0.03      $0.08           $0.03
Fourth Quarter                   $0.31     $0.02      $0.31           $0.02

First Three Fiscal Quarters of
Year Ended September 30, 2001
-----------------------------                           High             Low
                                                     Transaction     Transaction
                                  High       Low        Price           Price
                                  ----       ----       ----           -----
First Quarter                    $0.24     $0.03      $0.24           $0.03
Second Quarter                   $0.10     $0.03      $0.10           $0.05
Third Quarter                    $0.12     $0.03      $0.12           $0.35

                                     Page 4


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     As of June 30, 2001,  eight NASD member firms were listed as market  makers
in our Company's common stock:  Knight Securities,  Inc.; Schwab Capital Markets
L.P.; Hill,  Thompson Magid,  L.P; Wien,  Securities Corp.; M.H. Meyerson & Co.;
Herzog,  Heine,  Geduld, Inc.; Fleet Trading; WM. V. Frankel & Co. Incorporated.
The Transfer  Agent for our Company's  common stock is American Stock Transfer &
Trust Company, 59 Maiden Lane; New York, New York 10007.

Penny Stock Rules

     In  response  to this item,  our  Company  incorporates  by  reference  its
corresponding response to Item 5 of the its report on Form 10-KSB for the fiscal
year ended September 30, 1998, as permitted by Commission Rule 12b-23.

Our Company's Common Stock

     The authorized  capital stock of our Company consists of 20,000,000  shares
of common  stock,  $.01 par value.  As of the close of business on September 30,
2000, our Company had 15,772,265  shares of common stock outstanding and held of
record by  approximately  500 persons.  Since December 31, 1998, our Company has
funded  all  of its  operations  and  paid  all of  its  debts  through  private
placements of its securities;  consequently,  as of August 31, 2001,  19,975,212
shares of our  Company's  common  stock were  outstanding.  The number of record
holders of our Company's  common stock as of the close of business on August 31,
2001,  was  approximately  989. Of those,  approximately  41 were  holding  such
securities pursuant to depository arrangements with the actual beneficial owners
(e.g.,  securities  held in street name for their clients by securities  brokers
and dealers), and our Company has been advised that approximately 338 additional
persons were beneficial owners under such arrangements.  Consequently, the total
number  of  beneficial  owners  is of  more  than 5 per  cent  of the  Company's
outstanding securities.

     Each holder of shares of our Company's common stock is entitled to one vote
for  each  share  held on all  matters  to be  voted  upon  by the  stockholders
generally.  The shares do not have  cumulative  voting rights,  which means that
holders of more than 50% of the shares of our Company's  common stock voting for
the election of directors can elect all the directors, and that in such an event
the  holders  of the  remaining  shares  would  not be  able to  elect a  single
director.  The approval of  proposals  submitted  to  stockholders  at a meeting
requires the favorable  vote of a majority of the shares  voting,  except in the
case of certain  fundamental  matters where  Delaware law requires the favorable
vote of at least a majority of all outstanding  shares. Our Company  understands
that certain  stockholders  may seek to take action  increasing  its  authorized
capital stock by written consent in lieu of a meeting,  if such stockholders can
meet the  exemptive  provisions of commission  Rule  14a-2(b)(2),  pertaining to
exempt  proxy  solicitations,   without  triggering  Schedule  14-C  information
schedule dissemination requirements.

     Shareholders are entitled to receive such dividends as may be declared from
time to time by the board of directors out of funds legally available  therefor,
and in the event of  liquidation,  dissolution  or winding up of our  Company to
share ratably in all assets remaining after payment of liabilities.  The holders
of shares of our  Company's  common  stock  have no  preemptive,  conversion  or
subscription rights.

     Our Company has not declared any dividends on its common stock and does not
expect to do so at any time in the  foreseeable  future.  There are currently no
restrictions on our Company's ability to declare dividends in the future,  other
than restrictions  applicable to all Delaware corporations  involving the source
of funds for payment of dividends and their  effects on our Company's  solvency.
In the  future,  our  Company  expects  that a  portion  of  its  expansion  and
development capital may be in the form of loans from financial institutions,  in
which case it is likely that such institutions would require restrictions on the
payment of dividends based on traditional  financial  ratios designed to predict
our Company's ability to repay such loans.  However, no specific  predictions as
to any such restrictions can be made at this time.

     Pursuant to  anticipated  consulting  services  that may be rendered by our
Company to third  parties  (see "Item 6"),  it is  possible  that  shares of the
capital stock of our Company's  clients will be registered  with the  Commission
and issued  directly to our Company's  stockholders,  as a "defacto  third party
stock  dividend";   however,  no  assurances  can  be  provided  that  any  such
distribution  will ever take place, or as to the actual economic benefits of any
such distribution.

     Amounts of Common  Equity  Subject to  Outstanding  Options or  Warrants to
Purchase, or Securities Convertible Into Common Equity of our Company

Common Stock Purchase Warrants

     Since  January 1,  1999,  our  Company  has issued  common  stock  purchase
warrants to Yankees and to our Company's officers and directors, in lieu of cash
compensation for their services. Current details concerning  such  warrants  are

                                     Page 5


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provided below. As of August 31, 2001,  3,902,000 shares of our Company's common
stock were  reserved for issuance  pursuant to existing  obligations,  including
common stock  purchase  warrants  held by its officers and  directors in lieu of
cash  compensation for their services,  but excluding shares issuable to Yankees
pursuant to its current  warrant.  Yankees  recognizes  that the total number of
authorized  shares is not  sufficient  to allow for  reservation  of the  shares
subject to its warrant or issuable  persuant to anti-dilutive  rights associated
with  prior  warrant  exercise;  however  Yankees  believes  that it can  obtain
sufficient  director and  stockholder  votes to increase the authorized  capital
stock of our Company, as required to permit exercise of its warrant and issuance
of  additional  shares  to  which  it is  entitled  pursuant  to  the  warrants'
anti-dilutive  provisions,  at such time as  stockholder  action can be taken in
compliance with applicable securities laws. Consequently,  Yankees has consented
to the issuance and reservation of our Company's  common stock in favor of other
persons, which would otherwise have been subject to Yankees' warrant.

Stock Options

     In  response  to this item,  our  Company  incorporates  by  reference  its
corresponding  response  to Item 5 of its  report on Form  10-KSB for the fiscal
year ended September 30, 1998, as permitted by Commission Rule 12b-23.

Tabular Information

     As of August 31, 2001,  our Company had 3,902,000  shares of its authorized
common  stock  reserved  for  issuance  (excluding  the  number  of shares to be
reserved for Yankees  warrants and  anti-dilutive  rights) in  conjunction  with
current  obligations to issue  additional  shares or in the event that currently
outstanding  options or warrants are  exercised.  The following  table  provides
summary data concerning such options and warrants:

Designation         Nature of         Exercise or            Number of Shares
or Holder           The Security      Conversion Price       Currently Reserved
---------           ------------      ----------------       ------------------
Yankees             Option            $80,000 in total       (1)
(2)                 Warrant           $45,140 in total       1,102,000
(3)                (3)                (3)                    1,000,000
(4)                (4)                (4)                    1,600,000
Anthony Q. Joffe   (5)                (5)                    200,000

------

(1)  The number of shares cannot be determined with certainty;  rather,  Yankees
     has the right, for an aggregate price of $80,000, to purchase shares of our
     Company's  common  stock  equal  to 75% of our  Company's  outstanding  and
     reserved  shares of common stock,  measured  immediately  after exercise is
     completed.  See Notes to Financial  Statements.  For purposes of the Table,
     the  computation   was  made  assuming  that  only  the  shares   currently
     outstanding  or reserved  would be  outstanding  or reserved at the time of
     exercise (an improbable  scenario).  The actual formula for determining the
     total  number of Yankees'  option  shares  issuable  is: [the total  shares
     outstanding at the time the final option exercise  payment is made less the
     number of shares issued under the option + the shares then  reserved  other
     than for the Yankees' option]  multiplied by 3 and rounded up or down based
     on proximity to the next whole number.

(2)  Represents  the  shares  issuable  to  members  of our  Company's  board of
     directors, as disclosed below in Part III, Item 10, Executive Compensation;
     such  disclosure  is  incorporated  by  reference  herein,  as permitted by
     Commission Rule 12b-23.

(3)  Represents  shares  reserved for issuance in the event offers of settlement
     by our Company are accepted by certain current  creditors,  as disclosed at
     Part I, Item 1,  Description of Business - New Strategic  Plans & Change in
     Control, Form 10-KSB for year ended September 30, 1988 , such disclosure is
     incorporated by reference herein, as permitted by Commission Rule 12b-23.

(4)  Represents  the shares  issuable  pursuant to our  Company's  1998 and 2000
     stock option  plans,  as disclosed  below at Part III,  Item 10,  Executive
     Compensation; such disclosure is being incorporated by reference herein, as
     permitted by Commission Rule 12b-23. Because the plans were not ratified by
     the stockholders  within one year after their adoption,  no incentive stock
     options may be issued  thereunder  and  the plans are currently  limited to
     issuance of non-qualified  stock options,  as determined under the Internal
     Revenue Code.

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(5)  Represents  the  shares  issuable  to Mr.  Joffe  as  compensation  for his
     services as our Company's  President,  as disclosed below in Part III, Item
     10,  Executive  Compensation;  such disclosure is incorporated by reference
     herein, as permitted by Commission Rule 12b-23.

Amounts of Common Equity That  Could  Be  Sold  Pursuant  to  Rule 144 under the
Securities Act

Reporting Period

     As of September 30, 2000,  15,772,265  shares of our Company's common stock
were outstanding, of which:

     *    1,904,868 are recognized as free trading by our Company;

     *    13,867,397 have been issued over the years pursuant to exemptions from
          registration  and are thus  restricted  securities,  some of which are
          eligible for resale under Commission Rule 144 ("Rule 144").

     Of the shares that our Company has  instructed  its transfer agent to treat
as restricted:

     *    11,834,329 were issued prior to September 30, 1999, and  consequently,
          could  have been sold under  Rule 144,  subject  to Rule 144's  volume
          limitations, notice, public information and manner of sale conditions.
          The volume limitations  restricted quantities sold over 90 day periods
          to the greater of 1% of the total  outstanding  common  stock,  or the
          average weekly trading  volume during the four-week  period  preceding
          the sale;

     *    5,869,329  were issued to persons that do not appear to be  affiliates
          of our Company prior to September 30, 1998,  and  consequently  may be
          sold by holders  that have not been  affiliates  of our  Company for a
          period of at least 90 days, under the more liberal  provisions of Rule
          144(k), which dispense with the volume,  public information and manner
          of sale conditions.

Material Subsequent Events

     As of August 31, 2001, 19,975,212 shares of our Company's common stock were
outstanding, of which:

     *    5,792,257 are recognized as free trading by our Company;

     *    14,182,955 have been issued over the years pursuant to exemptions from
          registration  and are thus  restricted  securities,  some of which are
          eligible for resale under Rule 144.

     Of the shares that our Company has  instructed  its transfer agent to treat
as restricted:

     *    13,867,397 were issued prior to August 31, 2000, and consequently, may
          currently  be sold  under  Rule  144,  subject  to Rule  144's  volume
          limitations, notice, public information and manner of sale conditions.
          The volume limitations restrict quantities sold over 90 day periods to
          the  greater  of 1% of the  total  outstanding  common  stock,  or the
          average weekly trading  volume during the four-week  period  preceding
          the sale;

     *    5,834,329  were issued to persons that do not appear to be  affiliates
          of our Company prior to August 31, 1999, and  consequently may be sold
          by holders that have not been  affiliates  of our Company for a period
          of at least 90 days, under the more liberal provisions of Rule 144(k),
          which dispense with the volume,  public information and manner of sale
          conditions.

Rule 144

     In  response  to this item,  our  Company  incorporates  by  reference  its
corresponding  response  to Item 5 of its  report on Form  10-KSB for the fiscal
year ended September 30, 1998, as permitted by Commission Rule 12b-23.

                                     Page 7

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Amount of Common  Equity  That our  Company  Has Agreed  to  Register  under the
Securities Act for Sale by

Security Holders

     Our Company has not agreed to register any of its common  stock,  except in
conjunction with an obligation to include the common stock purchase warrants for
its officers and directors and the Yankees'  warrant in registration  statements
that it may otherwise file (commonly referred to as "piggyback" rights).

     Amounts of Common Equity That our Company Is Considering  Publicly Offering
or  Privately  Placing  Other than Shares to Be Issued  (Pursuant to an Employee
Benefit Plan or Dividend  Reinvestment Plan), the Offering of Which Could Have a
Material Effect on the Market Price of our Company's Common Equity.

During the Year Following the Reporting Period

     Information  concerning our Company's  actual shares issued during the year
ending  September 30, 2001, is contained  below at "Recent Sales of Unregistered
Securities - Material Subsequent Events."

Recent Sales of Unregistered Securities

     During The Three Year Period Preceding Reporting Date

     During the three year period ended  September 30, 2000,  our Company issued
the  securities  listed  in the  tables  below  without  registration  under the
Securities  Act in  reliance on the  exemption  from  registration  requirements
cited. Footnotes for all tables follow the last table after "Material Subsequent
Events."

Common Stock:

     In  response  to this item,  our  Company  incorporates  by  reference  its
corresponding  response to Item 5 or our Company's report on form 10-KSB for the
year ended  September  30, 1999,  as permitted by  Commission  Rule 12b-23,  and
supplements this response as follows:

                Amount of                                   Total   Registration
                Securities                    Offering      Total      Exemption
Date            Sold         Subscriber       Consideration Discounts  Relied on
----            -----        ----------       ------------- ---------  ---------
2000:
March 17         34,000  Jack Levine                  (12)     None       (1)
March 17        677,087  Oppenheimer Wolff & Donnelly (12)     None       (1)
May 11          136,147  Larry Van Etten              (12)     None       (1)
May 4           200,000  Anthony Q. Joffe             (13)     None       (2)
May 31          533,333  Troy D. Wiseman              (12)     None       (1)
September 19  2,000,000  The Yankee Companies, Inc.   (10)     (11)       (2)


Convertible Securities:

     In  response  to this item,  our  Company  incorporates  by  reference  its
corresponding  response to Item 5 of our Company's report on Form 10-KSB for the
year ended September 30, 1999, as permitted by Commission
Rule 12b-23.

Material Subsequent Events

     Since the end of the three  year  period  ended  September  30,  2000,  our
Company  issued the securities  listed in the tables below without  registration
under  the  Securities  Act in  reliance  on  the  exemption  from  registration
requirements cited.

Common Stock:

              Amount of                   Total                     Registration
              Securities                  Offering       Total         Exemption
Date          Sold       Subscriber       Consideration  Discounts     Relied on
----          ---------  ----------       -------------  ---------     ---------
2000:
October 19    200,000    Bell Entertainment   (14)         None             (1)

2001:
February 19   100,000    Patrick V. Graham    (15)         None             (1)
July 2      1,844,444    SBV Holdings, Inc.   (16)         None             (2)

Convertible Securities:

              Amount of                   Total          Terms of   Registration
              Securities                  Offering       Conversion    Exemption
Date          Sold       Subscriber       Consideration  or Exercise   Relied on
----          ---------  ----------       -------------  -----------   ---------
(17)          1,000,000  Stock Option Plan    (17)         (17)             (1)
(18)            732,000  Directors/Officers   (18)         (18)             (2)
(19)          1,000,000  (19)                 (19)         (19)             (1)

                                     Page 8

<PAGE>



(1)  Section  4(2) of the  Securities  Act.  In each case,  the  subscriber  was
     required  to  represent  that the  shares  were  purchased  for  investment
     purposes,  the  certificates  were legended to prevent  transfer  except in
     compliance with applicable  laws, and the transfer agent was instructed not
     to permit transfers unless directed to do so by our Company, after approval
     by its legal counsel.  In addition,  each subscriber was directed to review
     our Company's  filings with the  Commission  under the Exchange Act and was
     provided  with  access  to our  Company's  officers,  directors,  books and
     records, in order to obtain required information.

(2)  Section  4(6) of the  Securities  Act.  In each case,  the  subscriber  was
     required  to  represent  that the  shares  were  purchased  for  investment
     purposes,  the  certificates  were legended to prevent  transfer  except in
     compliance  with  applicable laws and the transfer agent was instructed not
     to permit transfers unless directed to do so by our Company, after approval
     by its legal counsel.  Each subscriber was directed to review our Company's
     filings with the  Commission  under the Exchange Act and was provided  with
     access to our Company's officers, directors, books and records, in order to
     obtain  required  information;  and, a Form D reporting the transaction was
     filed with the Commission.

(3)  Current management has no knowledge pertaining to this transaction.

(4)  Compensation  for  unspecified  services  rendered  for the  benefit of our
     Company,  with neither the offering price nor the consideration clearly set
     forth.

(5)  For services as a director.

(6)  Shares of Tio stock were  converted  into  shares of our  Company's  common
     stock.

(7)  Compensation for consulting  services for the benefit of our Company,  with
     neither the offering price nor the consideration clearly set forth.

(8)  Asset purchase  agreement  dated May 19, 1998,  entered into by and between
     our Company and Arnold A. Semler,  Inc. doing business under the fictitious
     name "Associated Industries."

(9)  Consideration for the purchase of Business Technology Systems,  Inc. by our
     Company.

(10) Option to purchase 75% of our  Company's  outstanding  and reserved  common
     stock  measured   immediately   following   exercise  of  the  option,   in
     consideration  for an  aggregate  price of  $80,000,  such  option  being a
     portion of consideration  granted to Yankees under its consulting agreement
     with our Company in exchange  for Yankees'  agreement to forego  hourly and
     document  licensing fees for a period of approximately two years, see below
     "Part III: Item 11,  Security  Ownership of Certain  Beneficial  Owners and
     Management;"  and,  "Part III, Item 12, Certain  Relationships  and Related
     Transactions."

(11) No commissions  or discounts  were paid to anyone in  conjunction  with the
     sale of the foregoing securities.

(12) Terms of settlement for various services provided to our Company.

(13) Compensation  to Anthony Q. Joffe for his services as president from May 4,
     1999 to May 3, 2000.

(14) Compensation  to Bell  Entertainment  for its  services  in  assisting  our
     Company to prepare its report on Form 10- KSB for year ended  September 30,
     1998.

(15) Issued  pursuant to the settlement  agreement  approved by the court in the
     case of Patrick  Graham vs. Five Star  Cigar,  Inc.  and others,  including
     Colmena  Corp.,  case no.  99-121194,  Circuit  Court for  Broward  County,
     Florida.

(16) On May 31, 2001, our Company entered into a settlement  agreement with SBV.
     Our Company issued 1,844,444 shares of its common stock to SBV.

                                     Page 9


<PAGE>



(17) Represents  the shares  issuable  pursuant to our  Company's  1998 and 2000
     stock option plans,  as disclosed  below at "Part III,  Item 10,  Executive
     Compensation".

(18) Represents  the shares  issuable to directors and officers upon exercise of
     their  warrants,  as  disclosed  below at  "Part  III,  Item 10,  Executive
     Compensation."  Because  the plans were not  ratified  by the  stockholders
     within one year after  their  adoption,  no  incentive  stock  options  may
     currently be issued  thereunder,  and the plans are now limited to issuance
     of  non-qualified  stock options,  as determined under the Internal Revenue
     Code.

(19) Represents  shares  reserved for issuance in the event offers of settlement
     by our Company are accepted by certain current  creditors,  as disclosed at
     Form 10-KSB  September 30, 1998 "Part I, Item 1,  Description of Business -
     New Strategic Plans & Change in Control."


ITEM 6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL   CONDITION  AND
         RESULTS OF OPERATIONS.

Overview

     The following  discussion  should be read in conjunction with our Company's
audited financial statements and the more detailed information contained in this
report.  During  November of 1997, our Company became engaged in the business of
marketing and distributing  long-distance telephone service calling cards and in
the manufacture and distribution of premium  hand-rolled  cigars,  in each case,
through wholly owned subsidiaries.  During March of 1999, our Company's board of
directors  concluded  negotiations  to divest  our  Company of all of its wholly
owned  subsidiaries  positioning our Company to undertake new business endeavors
or to become a more attractive acquisition candidate.

Plan of Operations

     During  January  of  1999,  our  Company's  board  of  directors  signed  a
consulting  agreement  with Yankees,  calling for Yankees to provide our Company
with working  capital and assistance in development  and  implementation  of new
strategic  plans.  Yankees  has been  concentrating  on  meeting  our  Company's
obligation to file periodic reports under the Exchange Act, including completing
the audit of our financial  statements  for the fiscal year ended  September 30,
2000.  Additionally,  Yankees  assisted our Company in identifying  persons with
claims and potential  claims  against our Company and to negotiate  with them to
amicably resolve such claims.

     Our Company has  completed the audit of its  financial  statements  for the
fiscal year ended  September 30, 2000 and is currently  completing the quarterly
unaudited  financial  statements  required  in  order to  complete  and file its
delinquent  reports on Commission  Form 10-QSB for the calendar  quarters  ended
December 31, 2000, March 31, 2001 and June 30, 2001. Our Company expects to have
all such financial  statements  and reports filed with the  Commission  prior to
September 30, 2001.

     Almost all claims and potential  claims  against our Company  identified by
Yankees  have been  amicably  resolved  through the  issuance  of  approximately
3,325,011 shares of common stock through August 2001, with the notable exception
of the arbitral award in Deutsche  Financial  Services  Corporation vs. Business
Technology  Systems,  Inc., Ila Sethi, Madhu Sethi,  Richard C. Peplin, Jr., and
Colmena  Corp,  which our  Company  will  contest  (see "Part II,  Item 1, Legal
Proceedings").  Yankees,  on  behalf of our  Company,  is  currently  conducting
negotiations with certain remaining  claimants and has made offers of settlement
for claims. While management believes that there is a reasonable likelihood that
such offers will be accepted, no assurances to that effect can be provided.

     Except for recently initiated consulting activities,  our Company currently
has  no  business   operations   other  than  those   pertaining  to  correcting
deficiencies in filing  obligations  under the Exchange Act,  maintenance of our
corporate  existence,   and  potential  operations  under  a  negotiated  resale
agreement  involving the purchase of  telecommunication  services from BellSouth
Telecommunications, Inc. for resale to end users.

                                     Page 10
<Page>

ITEM 6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION   AND
         RESULTS OF OPERATIONS (Continued)

Plan of Operations (Continued)

     The  agreement  pertains to Sections 251 and 252 of the  Telecommunications
Act of 1996, and allows our Company to operate as an alternative  local exchange
telecommunications company in the States of Alabama, Florida, Georgia, Kentucky,
Louisiana,  Mississippi,  North  Carolina,  South  Carolina and  Tennessee.  The
agreement permits our Company to provide competing  telephone  exchange services
to residential and business subscribers in territories where BellSouth operates.
Our Company  currently has no customers and is not conducting any business under
our agreement with  BellSouth.  As soon as our Company has become current in its
filing  obligations  under the Exchange Act, it plans to either  obtain  capital
required to resume business operations pursuant to the BellSouth  agreement,  or
to acquire  complementary  businesses  in exchange  for shares of our  Company's
common  stock and a  commitment  by our  Company to provide  required  expansion
capital.  However,  no assurances can be provided that such business plan can be
attained.

Consulting Activities

     As a material subsequent event, during August 2001, in response to Yankees'
suggestions,  our Company's board of directors authorized our Company's officers
to  negotiate  consulting  agreements  with third  parties  that desire to avail
themselves of our Company's experience as a reporting company under the Exchange
Act. Such  assistance is expected to involve the  recruitment and supervision of
professional advisors such as attorneys,  auditors, investment bankers, transfer
agents,  officers and  directors  who have the desired  experience  in operating
public  companies,  and access to procedures  and policies that Yankees has made
available for use by our Company in complying with federal and state  securities
and corporate laws.

     Our Company  expects,  in exchange for such  services,  that the consulting
client  will  register a  percentage  of its common  stock for  issuance  to our
Company's stockholders, as of an agreed-upon date following the execution of the
consulting  agreement.  The amount of such common stock will vary depending upon
the circumstances of each  transaction.  The issuance of shares to our Company's
stockholders will be conditioned on prior registration with the Commission,  and
the failure to conclude such registration would void the agreement.

     Registration of shares directly to our Company's  stockholders is necessary
in order for our Company to avoid inadvertently  becoming an investment company,
and provides a major benefit to  consulting  clients in that they obtain a large
base of stockholders,  including all of our Company's  market makers.  The major
benefit of the consulting services to our Company is that it will be continually
exposed to  emerging  companies,  some of which  should  prove to be  attractive
acquisition   candidates  or  candidates  for  strategic   operating   alliances
(cooperative  business activities not involving shares of equity ownership) that
fit our Company's strategic objectives.

     Our  Company  does not yet  have any  consulting  clients,  although  it is
discussing  such  possibility  with one company in the  wireless  communications
industry.


ITEM 6.  MANAGEMENT'S   DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS (Continued)

Plan of Operations (Continued)

     The foregoing plan of operation  contains  forward-looking  statements that
are subject to risks and  uncertainties,  which could  cause  actual  results to
differ  materially  from those discussed in the  forward-looking  statements and
from historical results of operations. Among the risks and uncertainties,  which
could cause such a difference,  are those  relating to our Company's  dependence
upon  certain key  personnel,  our ability to manage our growth,  our  Company's
success  in  implementing  our  business  strategy,  our  success  in  arranging
financing where required,  and the risk of economic and market factors affecting
our Company or our  customers.  Many of such risk factors are beyond the control
of our Company and its management.


                                    Page 11
<Page>
Year ended September 30, 2000 compared to year ended September 30, 1999

     Prior  to  the  discontinuation  of  past  operations,   substantially  all
financial  activity during fiscal 1998 was a result of business conducted in the
marketing and distributing of long-distance  telephone service calling cards. We
reported net losses from  operations  for the year ended  September  30, 2000 of
($601,695) and net losses income from  operations  for the year ended  September
30, 1999 of  $(1,765,748).  This translates to a per-share (loss) of $(0.03) for
the year ended  September 30, 2000 and per-share  (loss) of $(0.17) for the year
ended September 30, 1999. Additionally, we reported a net gain from discontinued
operations for the year ended September 30, 1999 of $1,475,452 or $.14 per share
as  compared  to a net loss  from  discontinued  operations  for the year  ended
September  30, 2000 of $-0-.  The gain from  discontinued  operation in 1999 was
related to the sale of our subsidiaries.

     Our Company had no revenues for the year ended September 30, 2000 and 1999,
respectively.  Operating  expenses  decreased  to  $480,019  for the year  ended
September  30, 2000 as compared to $1,678,763  for the year ended  September 30,
1999. The decrease was due to the decreased  consulting  fees resulting from the
issuance of common stock warrants, which amounted to $436,125 and $1,522,978 for
the year ended September 30, 2000 and 1999, respectively.

     Net cash used in investing activities for the year ended September 30, 2000
was $0 compared to net cash used in investing  activities of $$2,480 in the 1999
period.  This  difference  was related to the reduction of cash of  subsidiaries
sold.

     Net cash provided by financing activities in the 2000 period was $36,620 as
compared to net cash  provided by  financing  activities  of $47,500 in the 1999
period.  The difference was  attributable  to decreased  proceeds  received from
loans and the sale of common stock.

     No  additional  meaningful  comparisons  can be  made  for the  year  ended
September 30, 2000 as compared to the year ended September 30, 1999.

Year 2000 Compliance

     As of the date this  report  was to have been  filed  with the  Commission,
there were serious  concerns about the effects the transition  from the 1900s to
the 2000s  would  have on  computer  programs  designed  to ignore the first two
digits of each year in determining operating periods.

     No material Year 2000 problems  occurred as a result of the transition from
the 1900s to the 2000s on  computer  programs  designed  to ignore the first two
digits of each year in determining operating periods.

     At  September  30,  2000,  our Company had a  stockholders'  deficiency  of
$722,021.  Our  Company's  future  operations  and  growth is  dependent  on its
ability,  with the assistance of Yankees,  to raise capital for expansion and to
implement  our  strategic  plan.  If our  Company is not  successful  in raising
capital and in resolving the remaining  claims of certain  claimants,  or if the
arbitral  award  in  Deutsche  Financial   Services   Corporation  vs.  Business
Technology  Systems,  Inc., Ila Sethi, Madhu Sethi,  Richard C. Peplin, Jr., and
Colmena Corp., were successfully reduced to a judgment, our Company may file for
reorganization  pursuant to Chapter 11 of the United States Bankruptcy Code. Our
Company has no other material commitments for capital expenditures.

ITEM 7.  FINANCIAL STATEMENTS.

Index to Financial Statements and Financial Statement Schedules.

     The auditor's report and audited balance sheet of our Company for its years
ended  September  30,  2000 and  1999  and  related  statements  of  operations,
stockholder's  equity,  cash flows and notes to  financial  statements  for such
years,  including  indexes  therefore,  follow  in  sequentially  numbered pages
numbered F1 through F16.

                                    Page 12

<Page>


                                  COLMENA CORP.

                              FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2000 AND 1999



                                    Contents


                                                                       Page(s)
                                                                     ----------

Independent Auditors' Report                                               F2

Balance Sheet                                                              F3

Statements of Operations                                                   F4

Statements of Changes in Stockholders' Deficiency                          F5

Statements of Cash Flows                                                   F6

Notes to Financial Statements                                           F8-16


                                       F 1
<Page>





                          Independent Auditors' Report


To the Board of Directors of:
Colmena Corp.

We have audited the accompanying  balance sheet of Colmena Corp. as of September
30, 2000 and the related  statements  of  operations,  changes in  stockholders'
deficiency and cash flows for the years ended September 30, 2000 and 1999. 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  These  standards  require  that we plan and
perform the audits 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  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Colmena Corp. as of September
30,  2000 and the  results  of its  operations  and its cash flows for the years
ended  September  30, 2000 and 1999 in  conformity  with  accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 11 to the
financial statements,  except for recently initiated consulting activities,  the
Company has no active business operations and has a stockholders' deficiency and
working capital  deficiency that raises  substantial  doubt about its ability to
continue as a going concern.  Management's plans in regards to these matters are
also  described  in  Note  11.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.



/s/SALBERG & COMPANY, P.A.
Boca Raton, FL
August 20, 2001

                                       F2
<Page>
                                 Colmena Corp.
                                 Balance Sheet
                               September 30, 2000

                                     Assets
                                                                    2000
                                                             ------------------
Assets
Cash                                                            $      2,078
                                                             ------------------
Total Current Assets                                            $      2,078
                                                             ==================



                    Liabilities and Stockholders' Deficiency

Liabilities
Accounts payable and accrued expenses                           $    266,479
Notes payable                                                        100,000
Guaranteed loan                                                      331,000
Due to related party                                                  26,620
                                                             ------------------
Total Current Liabilities                                            724,099
                                                             ------------------
Stockholders' Deficiency
Common stock, $0.01 par value; 20,000,000 shares authorized,
 15,772,259 shares issued and outstanding                            157,723
Common stock issuable, $0.01 par value (8,670,552 shares)             86,705
Additional Paid-In Capital                                        16,538,612
Accumulated deficit                                              (17,505,061)
                                                             ------------------
Total Stockholders' Deficiency                                      (722,021)
                                                             ------------------
Total Liabilities & Stockholder's Deficiency                           2,078
                                                             ==================

                See accompanying notes to financial statements.

                                       F3
<Page>


                                 Colmena Corp.
                            Statements of Operations
                    Years Ended September 30, 2000 and 1999


                                               2000                 1999
                                         ---------------       ----------------
Operating Expenses
Compensation expense                      $      7,323          $      4,167
Consulting                                     436,125             1,522,978
Professional and legal fees                     28,689                19,819
Selling, general and administrative              7,882               131,799
                                         ----------------      ----------------
Total Operating Expenses                       480,019             1,678,763
                                         ----------------      ----------------
Loss from Operations                          (480,019)           (1,678,763)
                                         ----------------      ----------------

Other Expenses
Settlement expense                             (55,678)                    -
Loss on impairment of assets                         -                (2,900)
Interest expense, net                          (65,998)              (84,085)
                                         ----------------      ----------------
Total Other Expenses                          (121,676)              (86,985)
                                         ----------------      ----------------
Loss Before Discontinued Operations           (601,695)           (1,765,748)
                                         ----------------      ----------------

Loss From Discontinued Operations
Loss from operations                                 -              (108,665)
Gain (loss) on disposal                              -             1,584,117
                                        ----------------       ----------------
Total Loss from Discontinued Operations              -             1,475,452

Net Loss                                 $    (601,695)        $    (290,296)
                                        ================       ================
Net Loss Per Common Share - Basic and Diluted
Loss from continuing operations             $    (0.03)        $       (0.17)
Income from discontinued operations                  -                  0.14
                                        ----------------       ----------------

                                         $       (0.03)        $       (0.03)
                                        ================       ================
Weighted Common Shares Outstanding -
 Basic and Diluted                           20,480,684           10,502,651
                                        ================       ================

                 See accompanying notes to financial statements

                                       F4
<Page>



                                 Colmena Corp.
                Statements of Changes in Stockholder's Deficiency
                    Years Ended September 30, 2000 and 1999


<Table>

<S>                                <C>          <C>        <C>        <C>         <C>              <C>                  <C>

                                                                                Additional      Accumulated
                                        Common Stock      Common Stock Issuable Paid-In         Earnings
                                   Shares      Amount     Shares    Amount      Capital        (Deficit)               Total
                                ------------  ----------  --------  -------    ------------    ----------------     --------------

Balance, September 30, 1998        7,741,692  $ 77,417         -    $    -     $14,614,351     $(16,613,070)     $   (1,921,302)

Common stock warrants issued
 to consultants, officers and
 directors                                 -         -         -         -       1,522,978                -           1,522,978


Common stock issued for
 settlement                           250,00     2,500         -         -          22,500                -              25,000

Exercise of warrants               6,000,000    60,000         -         -         (31,200)               -              28,800

Net loss, 1999                             -         -         -         -               -         (290,296)           (290,296)
                               -------------  ---------  --------  ---------   ----------     ----------------     --------------

Balance, September 30, 1999       13,991,692   139,917          -        -      16,128,629      (16,903,366)           (634,820)

Common stock issued as
 settlement                        1,380,567    13,806          -        -          41,873                -              55,679

Common stock issued as
 consulting fee                      200,000     2,000          -        -           2,000                -               4,000

Common stock issued to
 employee                            200,000     2,000          -        -           4,000                -               6,000

Common stock options issued
 to directors                              -         -          -        -           5,490                -               5,490

Common stock warrants issued
 under consulting agreement                -         -          -        -         432,125                -             432,125


Common stock issuable pursuant
 to anti-dilutive rights of                -         -  8,670,552   86,705         (75,505)              -               11,200
 consultant warrants

Net loss, 2000                             -         -          -         -             -         (601,695)            (601,695)
                             ---------------  --------  ---------  --------   ------------     ----------------     --------------

Balance, September 30, 2000       15,772,259 $ 157,723  8,670,552  $ 86,705   $ 16,538,612    $(17,505,061)        $   (722,021)
                             ===============  ========  =========  ========   ============     ================     ==============

</Table>

                     See accompanying notes to financial statements.

                                       F5
<Page>

                                 Colmena Corp.
                            Statements of Cash Flow
                    Years Ended September 30, 2000 and 1999


                                                      2000               1999
                                                   ------------       ---------

Cash Flows From Operating Activities:
Net loss                                           $  (601,695)    $   (290,296)
Adjustments to reconcile net loss to net
 cash used in operating activities:
Depreciation                                                 -            4,500
Impairment loss on marketable securities                     -            2,900
Gain on disposal of subsidiaries                             -       (1,584,117)
Stock and options issued to consultants
 and employees                                         443,448        1,547,978
Stock based settlement expense                          55,679                -
Changes in operating assets and liabilities:
Increase (decrease) in:
Accounts payable and accrued expenses                   66,000          269,754
                                                    -----------       ---------
Total Adjustments                                      565,127          241,015
                                                    -----------       ---------
Net Cash Provided By Financing Activities              (36,568)         (49,281)
                                                    -----------       ---------
Cash Flow from Investing Activities
Cash of subsidiaries sold                                    -           (2,480)
                                                    -----------       ---------
Net Cash Used in Investing Activities                        -           (2,480)
                                                    -----------       ---------

Cash Flows from Financing Activities
Borrowings from related party                           25,420            1,200
Proceeds from borrowings - non-related parties               -           17,500
Proceeds from issuance of common stock
 from warrant exercise                                  11,200           28,800
                                                    -----------       ---------
Net Cash Used in Operating Activities                   36,620           47,500
                                                    -----------       ---------
Net Increase (Decrease) in Cash                             52           (4,261)

Cash - Beginning of Year                                 2,026            6,287

Cash - End of Year                                       2,078            2,026
                                                    ==========        =========
Non-Cash Investing and Financing Activities:
Issued common stock for compensation liability        $  4,167        $       -
                                                    -----------       ---------


                   See accompanying notes to financial statements.

                                       F6

<Page>

                                  Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999




Note 1    Nature of Operations and Summary of Significant Accounting Policies

    (A)   Nature of Operations

          Colmena Corp. (the  "Company"),  a Delaware  corporation,  through its
          former  subsidiaries  was engaged in various  industries.  Through its
          former  subsidiary,  T2U Co. (formerly known as RCP Enterprises Group,
          Inc.), which did business as RCP  Communications  Group, Inc. ("RCP"),
          and  through  its  former  subsidiary,  TechTel  Communications,  Inc.
          ("TechTel"),  the Company was engaged in the business of marketing and
          distributing   telecommunications   services.   Through   its   former
          subsidiary,   Business   Technology   Systems,   Inc.,  ("BTS")  whose
          operations were  discontinued in 1998 (See Note 2), the Company was in
          the business of selling computer equipment.  In addition,  the Company
          was  in  the  business  of  manufacturing  and  distributing   premium
          hand-rolled  cigars through its former  subsidiary,  Tio Mariano Cigar
          Corp.  ("Tio"),  whose operations were  discontinued in 1998 (See Note
          2). In March 1999, the Company  transferred one hundred percent of its
          subsidiaries,  RCP,  BTS,  and  Tio to  its  president  and  principal
          stockholder in a transaction  accounted for as a sale. In addition, in
          March 1999,  90% of TechTel was sold to various  parties.  In November
          1999, the Company sold its 10% holdings in TechTel (See Note 2).

    (B)   Principles of Consolidation

          The 1999 financial  statements  include the operating  activity of the
          subsidiaries RCP, BTS, Tio, and Techtel through the sale date of March
          16, 1999.  The  investment  in TechTel was recorded at a zero cost and
          accounted  for using the cost basis from March 1999.  All  significant
          intercompany transactions have been eliminated in consolidation.

    (C)   Use of Estimates

          In preparing the financial  statements in conformity  with  accounting
          principles  generally  accepted in the United  States,  management  is
          required to make  estimates and  assumptions  that affect the reported
          amounts of assets and  liabilities  and the  disclosure  of contingent
          assets and  liabilities  at the date of the financial  statements  and
          revenues and expenses during the reported period. Actual results could
          differ from those estimates.

     (D)  Cash and Cash Equivalents

          For purpose of the cash flow  statements,  the Company  considers  all
          highly liquid investments with original  maturities of three months or
          less at time of purchase to be cash equivalents.

     (E)  Investments

          The Company accounts for investments in marketable  equity  securities
          in accordance with Statement of Financial  Accounting Standards Number
          115,   "Accounting   for  Certain   Investments  in  Debt  and  Equity
          Securities."  Management determines the appropriate  classification of
          its  investments  at the  time of  acquisition  and  reevaluates  such
          determination  at each  balance  sheet date.  Trading  securities  are
          characterized  by the Company's  intent to sell them in the near term,
          while  available-for-sale  securities are those securities that do not
          qualify as trading securities.  Trading securities are carried at fair
          value, with unrealized  trading gains and losses included in earnings.
          Available-for-sale   securities  are  carried  at  fair  value,   with
          unrealized  gains  and  losses,  net of tax,  reported  as a  separate
          component of stockholders'  equity. In determining  realized gains and
          losses,  the cost of the  securities  sold is  based  on the  specific
          identification method (see Note 2).

                                       F7
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999


     (F)  Stock Options

          In accordance with Statement of Financial  Accounting Standards Number
          123, the Company has elected to account for stock options and warrants
          issued to employees under  Accounting  Principles Board Opinion Number
          25 and related interpretations. The Company accounts for stock options
          and warrants issued to consultants and other  non-employees  under the
          fair value method of Statement of Financial Accounting Standards 123.

     (G)  Income Taxes

          The Company  accounts for income taxes under the Financial  Accounting
          Standards Board  Statement of Financial  Accounting  Standards  Number
          109,  "Accounting  for  Income  Taxes"  ("Statement  No.109").   Under
          Statement No. 109,  deferred tax assets and liabilities are recognized
          for the future tax  consequences  attributable to differences  between
          the  financial  statement  carrying  amounts  of  existing  assets and
          liabilities  and their  respective tax basis.  Deferred tax assets and
          liabilities  are measured using enacted tax rates expected to apply to
          taxable income in the years in which those assets or  liabilities  are
          expected to be recovered or settled.  Under  Statement 109, the effect
          on  deferred  tax assets and  liabilities  of a change in tax rates is
          recognized in income in the period that includes the enactment date.

     (H)  Loss Per Share

          Net income  (loss) per common share for the years ended  September 30,
          2000 and 1999 is based upon the  weighted  average  common  shares and
          dilutive  common  stock  equivalents  outstanding  during  the year as
          defined by  Statement of Financial  Accounting  Standards,  Number 128
          "Earnings Per Share." The assumed exercise of common stock equivalents
          was not utilized in 2000 and 1999 since the effect was  anti-dilutive.
          At  September  30,  2000,  there were  666,000  shares of common stock
          underlying  outstanding  options and 14,670,552 shares of common stock
          underlying warrants outstanding, which could potentially dilute future
          earnings per share.

     (I)  Reclassifications

          Certain   amounts  in  the  1999   financial   statements   have  been
          reclassified to conform with the 2000 presentation.

Note 2   Reorganization Agreement and Sale of Subsidiaries

On  March  16,  1999  (the  "Sale  Date"),  a   Reorganization   Agreement  (the
"Agreement") was entered into between the Company and Mr. Peplin,  the principal
stockholder  and  former  president  of the  Company.  Under  the  terms  of the
Agreement,  as amended, the Company conveyed to the order of Mr. Peplin, and Mr.
Peplin accepted,  all of the Company's right,  title, and interest in and to all
of the capital  stock of T2U Co., BTS, and Tio (the  "Subsidiaries"),  expecting
that  Mr.  Peplin  would  designate  a newly  organized  corporation  to  assume
ownership of the  Subsidiaries.  The transaction was accounted for as a sale, at
fair market value, the  consideration  being an assumption of net liabilities by
Mr. Peplin.  The Company agreed to pay all reasonable costs required to effect a
liquidation of the Subsidiaries by Mr. Peplin's  designee  pursuant to Chapter 7
of the United States  Bankruptcy Code and to defend any resulting  litigation or
regulatory  actions  provided  that all work  required is  effected  through the
Company's  attorneys.  Furthermore,  the  Company  agreed to spin out 20% of the
capital stock of TechTel to the Company's  stockholders and to use the remaining
80% of the capital stock of TechTel to settle outstanding liabilities of TechTel
to Mr.  Peplin,  to a  principal  of  Yankees  and to  other  persons,  based on
negotiations to be conducted by Yankees.  Mr. Peplin irrevocably agreed that any
net assets remaining after liquidation of the Subsidiaries  would be used to pay
taxes and liabilities of TechTel  guaranteed by Mr. Peplin or the Company,  with
the net  balance  returned  to the  Company,  such net  balance  interest  to be
represented by a security interest memorialized in one or more Forms UCC-1 to be
filed in each state in which the Subsidiaries have any assets.  Ultimately,  90%
of  TechTel  common  stock  was  transferred  to  Mr.  Peplin  and  others  in a
transaction  accounted for as a sale, the consideration  being the assumption by
the  transferees of all liabilities of TechTel.  The TechTel  spinout  discussed
above never  occurred.  In November  1999, the interest of all  stockholders  in
TechTel,  including  the  Company,  was  acquired by FON Digital  Network,  Inc.
("FON"),  an OTC Bulletin  Board  company.  FON issued  50,000 shares to various
parties  including  5,000 to the Company in exchange  for  TechTel  shares.  The
shares were recorded at zero cost due to the de minimis value.


                                       F8
<Page>

                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999



At the Sale Date, the Company recognized a gain on sale of $1,584,117 net of the
retention of a BTS loan and related  accrued  interest  liability of $343,000 at
the Sale Date, which the Company had guaranteed.

The reorganizations  discussed above do not qualify as tax-free reorganizations.
However,  no taxes will be payable,  as the income generated by the Company as a
result of its  reorganizations  is from the relief of liabilities which is fully
excludable under the insolvency/bankruptcy  exception. Under such exception, the
net  operating  loss and other tax  attributes  are reduced in lieu of reporting
income.

On May 4, 1999, Mr. Peplin resigned from all offices and  directorships  held in
the Company.

Note 3   Property and Equipment

On  October  1,  1999,  the  Company  received  a notice of  proposal  to retain
collateral  pursuant  to a security  agreement  dated  August  14,  1998 in full
satisfaction  of the  obligation  secured  by the  security  agreement  totaling
$275,000 at September  30, 1999.  Equipment,  which had been  recorded at a book
value of $275,000, was repossessed.

Depreciation  of $4,500 on the equipment of a subsidiary is included in 1999 for
the period up to the subsidiary sale date of March 16, 1999. (See Note 2)

Note 4   Loss on Impairment of Stock

Impairment of $2,900 on the stock held for  investment  was  recognized in 1999.
The stock was owned by a subsidiary, which was sold in March 1999.

Note 5   Notes Payable

The following schedule reflects loans payable at September 30, 2000:

Note payable,  interest at 10% per annum, due and payable on July 30,
1999.Holder may convert any portion of the  principal  balance into
shares of the  Company's common stock at a conversion  price of $0.40
per share.  In default as of August 1, 1999.                          100,000
                                                                     ----------
                                                                     $ 100,000
                                                                     ==========

On May 30, 2001, the $100,000 note and related accrued  interest was settled for
1,844,444 shares of the Company's common stock. (See Note 12)

Note 6   Guaranteed Loans

On or about February 26, 1997 (the "Effective Date"), an agreement,  as amended,
for wholesale financing (the "Loan Agreement") was entered into between Deutsche
Financial  Services   Corporation,   Business  Technology  Systems,   Inc.  (the
"Borrower"),  and Colmena Corp. and certain individuals (the "Guarantors").  The
Loan Agreement provided for inventory financing for the Borrower. The loans made
under the Loan  Agreement  were secured by a first  priority  perfected lien and
security  interest in all of Borrower's  assets,  rights,  and proceeds thereof,
owned at the Effective Date or thereafter acquired by the Borrower.

On August 19, 1998,  an extension  agreement  (the  "Extension  Agreement")  was
entered into between the Borrower and the Guarantors.

In 1999,  Deutsche  Financial Services  Corporation filed a consent  arbitration
award  based upon  alleged  breach of the  extension  agreement.  Due to matters
relating  to the  execution  of  the  consent  arbitration  award,  the  Company
repudiated  its signing of the  extension  agreement  and has taken the position
that the consent  arbitration award entered pursuant to the extension  agreement
is not legally binding (see Note 10).

Based on the contingency to Colmena Corp. relating to the initial guarantee, the
Company has recorded the liability of $331,000 plus accrued interest of $108,000
on its records as of September 30, 2000.

                                      F9
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999


Note 7   Income Taxes

There was no current income tax provision for the years ended September 30, 2000
and 1999 due to the Company's net loss.

The Company's tax expense  differs from the "expected" tax expense for the years
ended  September 30, 2000 and 1999  (computed by applying the Federal  Corporate
tax rate of 34 percent to loss before taxes), as follows:

                                                     2000               1999
                                               --------------     --------------

Computed "expected" tax expense (benefit)       $   (204,576)    $      (64,258)
Non-deductible stock based compensation              150,772            517,812
Effect of net operating loss carry forwards           53,804           (453,554)
                                               --------------    ---------------
                                                $          -      $           -
                                               --------------     --------------

The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and liabilities at September 31, 2000 and 1999 are as
follows:

                                                     2000               1999
                                                --------------     -------------
Deferred tax assets:
Net operating loss carryforward                $   1,076,879      $   1,023,075
Stock based compensation                           4,912,192          4,761,420
                                                --------------     -------------
Total gross deferred tax assets                    5,989,089          5,784,495
Less valuation allowance                          (5,989,089)        (5,784,495)
                                                --------------     -------------
Net deferred tax assets                        $           -      $           -
                                                --------------     -------------

At September  30, 2000,  the Company had net  operating  loss carry  forwards of
approximately  $3,167,291  for income tax  purposes,  available to offset future
taxable income expiring on various dates through 2020.

In assessing the realizability of the deferred tax assets,  management considers
whether it is more likely than not that some portions or all of the deferred tax
assets will not be realized.  The ultimate realization of deferred tax assets is
dependent  upon the  generation of future taxable income or changes in ownership
or  business  during  the  periods  in which the  temporary  differences  become
deductible.  Due to the Company's reorganization (See Note 2) and the ceasing of
all  operations,  it is more likely than not that,  the deferred tax assets will
not be realized.

The valuation allowance at September 30, 1999 was $5,784,495.  The net change in
the valuation allowance was an increase of $204,594.

Note 8   Stockholders' Equity (Deficiency)

     (A)  Stock Issuances

          In  June  1999,   the  Company  issued  250,000  common  shares  as  a
          settlement.  The shares  were  valued at $25,000  based on the trading
          price  of the  shares  at the  settlement  date  and  an  expense  was
          recorded.

          During 1999, the Company issued  6,000,000 common shares upon exercise
          of warrants.

          On January  14, 2000 (the  "Settlement  Date"),  the  Company  settled
          various  disputes with an individual  who was owed legal fees from one
          of the Company's divested subsidiaries by issuing 34,000 shares of its
          common stock. A $510 expense was recorded on the Settlement Date based
          on the trading price of the common stock.  The expense  represents the
          write-off  of the  amount  due from  that  subsidiary  to  settle  its
          obligation.

                                      F10
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999

          On March 17, 2000 (the "Settlement Date"), a vendor who provided legal
          services to a subsidiary of the Company was issued 677,087  restricted
          shares of common  stock of the  Company.  The  Company  recognized  an
          expense of $27,083  based on the trading  price of the common stock on
          the Settlement Date. The expense  represents a write-off of the amount
          due from the subsidiary to settle its obligation.

          On May 4, 2000,  200,000 common shares were issued under an employment
          agreement and on May 4, 2001,  another 200,000 were issuable (see Note
          9(B)).

          On May 11, 2000 (the "Settlement  Date"),  the Company settled various
          disputes with an individual by issuing  136,147 of its common  shares.
          The Company  recorded an expense of $4,086 based on the trading  price
          of the common shares on the Settlement Date.

          On May 31, 2000 (the  "Settlement  Date"),  the Company entered into a
          settlement  with a creditor of one of its divested  subsidiaries.  The
          Company  issued  533,333  shares of its  common  stock.  An expense of
          $24,000 was recognized based on the trading price of the common shares
          on the Settlement  Date.  The expense  represents the write-off of the
          amount due from that subsidiary to settle its obligation.

          In  September  2000,   200,000  common  shares  were  issued  under  a
          consulting  agreement.  An expense of $4,000  was  recognized  in 2000
          based on the trading price on the vesting date.

          During  1999  and  2000,   8,826,566  and  21,014,538  common  shares,
          respectively,  became subject to the consultant warrants. Of the total
          29,341,104  shares of common stock  underlying  the  warrants  with an
          aggregate  exercise  price of $80,000,  14,670,552  are  considered as
          having been  issuable  based on a $40,000  payment for  exercise  made
          through  September  30,  2000,  6,000,000  of which have been  issued,
          leaving  8,670,552  issuable as of  September  30,  2000.  The Company
          cannot  issue such  shares  until its  articles of  incorporation  are
          amended to increase the  authorized  common shares (see Notes 8(C) and
          9). The Company understands that certain stockholders may seek to take
          action  increasing its authorized  capital stock by written consent in
          lieu of a meeting,  if such  stockholders can meet the requirements of
          Delaware law as well as the exemptive  provisions  of Commission  Rule
          14a-2(b)(2),   pertaining  to  exempt  proxy  solicitations,   without
          triggering   Schedule   14-C   information   schedule    dissemination
          requirements.

     (B)  Stock Option Plan

          On February  27, 1998,  the Board of Directors of the Company  adopted
          the 1998 Stock Option Plan (the "Plan") to provide added incentive for
          high  levels  of  performance  to  officers,   directors,   employees,
          consultants,  and  independent  contractors  of the  Company.  Options
          granted under the plan are designed  either as incentive stock options
          or as non-qualified stock options. The plan will terminate on February
          27, 2008, unless earlier terminated.

          The Stock Option Plan authorizes  options for the purchase of up to an
          aggregate of 600,000 shares of the Company's common stock. The Company
          grants  non-qualified  and  incentive  stock  options.   Non-qualified
          options may be granted to officers, employees, directors, consultants,
          independent contractors,  or other service providers of the Company at
          an exercise price determined by the Stock Option Plan Committee of the
          Company's Board of Directors (the "Committee") which shall be at least
          equal to 85% of the fair market  value of the common stock at the date
          of the grant. Incentive stock options may only be granted to officers,
          employees,  and directors, who are also employees of the Company at an
          exercise price  determined by the  Committee,  which shall not be less
          than 100% of the fair market  value of the common stock at the date of
          grant and may not be less than  110% of the fair  market  value of the
          common stock at the date of grant if granted to an  individual  owning
          more than ten percent of the total combined voting power.

                                      F11
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999

          Options are  exercisable  at dates and  conditions  determined  by the
          Committee  at the  time  of  grant.  However,  an  option  may  not be
          exercised  after  the  expiration  of 10  years  from  the  date it is
          granted.  In the  case of  incentive  stock  options  the term may not
          exceed five years if granted to an option  holder owning more than ten
          percent of the total combined  voting power.  Through the date of this
          report, no stock options have been granted under the plan.

     (C)  Warrants and Options

          The Company granted options to purchase 300,000 shares of common stock
          in January 1999 at an exercise price of $0.05  expiring  January 2002.
          Pursuant to APB25,  an expense of $21,600 was  recognized  in 1999 pro
          rata  over  the  service  period  based  on the  trading  price of the
          underlying common stock on the grant date.

          The Company granted options to purchase 296,000 shares of common stock
          to  directors  and  officers in January  2000 at an exercise  price of
          $0.02 expiring  December  2002. A  compensation  expense of $4,440 was
          recognized in 2000 under the intrinsic value method of APB 25.

          The Company  granted options to purchase 70,000 shares of common stock
          in March 2000 to a director  at an  exercise  price of $0.05  expiring
          January 2002. A compensation  expense of $1,050 was recognized in 2000
          under APB 25.

          The Company issued warrants for the purchase of 8,326,530, 21,014,574,
          and  5,833,332  shares of common stock to a consultant in fiscal years
          1999, 2000, and 2001,  respectively (see Note 9). A consulting expense
          of $1,501,378,  $432,125,  and $460,000 was recognized in 1999,  2000,
          and 2001, respectively, based on the fair value options pricing method
          of SFAS 123. As of September 30, 2000,  14,670,552  of these  warrants
          were exercised at an effective exercise price as of September 30, 2000
          of $0.0027 per share with  8,670,552  of such common  shares  issuable
          pending  increase of the  authorized  shares of the Company (see Notes
          8(A) and 9).

     (D)  Pro Forma Disclosures

          In accordance  with Statement of Financial  Accounting  Standards 123,
          for options issued to employees,  the Company has elected to apply the
          intrinsic value method of Accounting  Principles  Board Opinion Number
          25 and related  interpretations.  Accordingly,  $7,323 and $4,167 were
          charged to compensation during 2000 and 1999, respectively,  since the
          fair market value of the common stock based upon the trading  price at
          the grant date exceeded the exercise price. Had compensation cost been
          recognized  based on the fair market value of the options on the grant
          date consistent with Statement of Financial  Accounting Standards 123,
          the Company's change in net loss for the year ended September 30, 2000
          was not  material  and the net loss for the year ended  September  30,
          1999 would have been increased to the pro forma amounts as follows:

                                                    1999
                                            ---------------
          Net loss:
          As reported                      $     (290,296)
          Pro Forma                        $     (291,196)

          Net loss per share:
          As reported                      $        (0.03)
          Pro Forma                        $        (0.03)

          The effect of applying Statement of Financial Accounting Standards 123
          is not likely to be  representative  of the  effects on  reported  net
          income for future  years due to,  among other  things,  the effects of
          vesting.

                                      F12
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999

Note 9   Commitments and Contingencies

     (A)  Consulting Agreement Between The Company and a Consultant

          As consideration for the first 200 hours of services provided (in lieu
          of  document  license  fees  and  required  cash  payments  valued  at
          $20,000), the Company agreed to issue within the first 365 days of the
          Agreement (the "Initial Term") to the Consultant options designated as
          Class A options to purchase shares of the Company's common stock at an
          aggregate exercise price of $40,000,  in an amount equal to 51% of the
          Company's common stock at the time exercise was completed.

          At the date of the Consulting  Agreement,  8,066,326  shares of common
          stock would have been issuable, had the Class A options been exercised
          in full on such date.  Any increase or decrease in the  outstanding or
          reserved  shares would  result in a  corresponding  adjustment  of the
          options'  quantity  and  exercise  price per share.  The options  were
          exercisable  from the 10th day  until  the  365th  day  following  the
          Effective  date. The term of Class A options was amended in January 2,
          2000 to extend the term for exercise to the later of December 31, 2002
          or the 100th day following the date the Company becomes current in its
          SEC filings under the Exchange Act. (See Notes 8 and 9)

          For additional services provided, during the initial term, the Company
          agreed to pay the following consideration:

          (a)  If the Consultant arranges or provides funding for the Company on
               more  beneficial  terms than  those  currently  reflected  in the
               Company's current principal financing agreements,  the Consultant
               shall be entitled, at its election, to either

              (i)   a fee of 25% of the  savings  achieved,  or
              (ii)  if equity  funding is  provided  through  Consultant  or its
                    affiliates,  a  discount  of 10% from the bid  price for the
                    subject  equity  securities,  if  issuable  as free  trading
                    securities,  or a discount of 50%, if issuable as restricted
                    securities,  or
              (iii) an introduction fee of 5% of the aggregate proceeds obtained
                    if funding is  provided  by any  persons  introduced  to the
                    Company by the Consultant;
          (b)  If  the  Consultant  generates  business  for  the  Company,  the
               Consultant  shall be entitled to a commission of 10% of the gross
               income  derived by the Company  therefrom on a continuing  basis;
          (c)  If the Consultant arranges for an acquisition by the Company, the
               Consultant shall be entitled to 10% of the compensation  paid for
               such  acquisition.  In addition,  the Company will be responsible
               for the payment of all costs and  disbursements  associated  with
               the Consultant's  services subject to certain  limitations and/or
               approvals, as stipulated in the Agreement.

               On January 4, 2000,  the  Agreement  was amended a second time to
               modify  the  required  payments  to the  Consultant  based on the
               Consultant's  standard hourly rates, by permitting the Consultant
               to accept payment in capital stock at the conversion  rate of 50%
               of the fair market value of such stock; increase the Consultant's
               ownership  after exercise of the warrants to 75% from 51% and the
               aggregate  exercise  price to $80,000 from $40,000 and to clarify
               the Consultant's  preferential rights to subscribe for additional
               securities  at a purchase  price of 50% of the fair market value.
               The term of the  warrants  was  extended to the later of December
               31, 2002 or the 100th day after the Company  registers  the stock
               underlying any unexercised warrants.

               On January 4, 2001, a third amendment  changed the consulting fee
               to $10,000 per month,  eliminating  hourly and document licensing
               fees and changed the  discounts as noted in item (a)(ii) above to
               a discount  of 10% from the lowest  price at which such  services
               are  offered  to  any  other  person,   and   eliminated  the  5%
               introduction fee. All provisions from prior agreements  regarding
               issuance of warrants remain intact.

               See  Note  8  for  warrant   grants  and  exercise   under  these
               agreements.

                                      F13
<Page>


                                 Colmena Corp.
                            Statements of Operations
                    Years Ended September 30, 2000 and 1999


     (B)  Employment Agreements

          The  Company  entered  into an  employment  agreement  on May 4,  1999
          expiring May 3, 2000 and automatically renewing unless terminated,  to
          employ its  President.  Compensation  is 200,000  common shares of the
          Company  each year  payable  only upon the 365th day of  service  (the
          "vesting date"),  and certain  commissions or fees based on stipulated
          criteria.  Based on this contingency the Company recorded compensation
          expense over the one-year  service  period based on the estimated fair
          market value on the vesting date resulting in the expense of $4,167 in
          1999 and $1,833 in 2000.  An  additional  200,000  shares are issuable
          based  on the  service  period  ending  in  May  2001.  The  agreement
          terminated in May 2001.

          The Company  entered into an employment  agreement on January 12, 2000
          with a term  through the later of December 31, 2000 or the election of
          a new Secretary,  to employ its corporate secretary (the "Secretary").
          Compensation  is  24,000  common  stock  options  pro rata  each  year
          exercisable  at $0.02 per share,  beginning  January  1, 2001  through
          December 31, 2001. In addition,  the Secretary  shall receive  certain
          commissions or fees based on stipulated criteria. On January 29, 1999,
          the  Secretary was granted  20,000 shares and on January 3, 2000,  the
          Secretary  was  granted   24,000   shares.   The  stock  options  vest
          immediately and are recorded as compensation  expense over the service
          period  under the  intrinsic  value  method of APB 25, at the  trading
          price of the underlying common stock on the vesting date, resulting in
          an expense in 1999 of $75 and in 2000 of $655.

          Effective  June 14,  2001,  the  Company  entered  into an  employment
          agreement with an individual (the "President") pursuant to which he is
          engaged as the Company's  president and chief executive  officer.  The
          agreement is for a term of one year, with renewal thereafter from year
          to year unless either the Company or the  President  gives at least 60
          days notice  prior to the end of the then current term of an intention
          not  to  renew,  and  contains   confidentiality  and  non-competition
          clauses.  As consideration for the President's  services,  the Company
          has  agreed  to  compensate  him at the  rate of  $50.00  per  hour of
          services  to  the  Company,  plus  reimbursement  for  all  reasonable
          expenses related thereto. This compensation is paid at the end of each
          month in shares of the Company's  common stock calculated by using the
          average  closing  transaction  price of the stock  for the month  then
          ended.

          Effective  June 14,  2001,  the  Company  entered  into an  employment
          agreement with an individual (the  "Secretary")  pursuant to which she
          is  engaged  as  the  Company's  vice  president  and  secretary.  The
          agreement is for a term of one year, with renewal thereafter from year
          to year unless either the Company or the  Secretary  gives at least 60
          days notice  prior to the end of the then current term of an intention
          not  to  renew,  and  contains   confidentiality  and  non-competition
          clauses.  As consideration for the Secretary's  services,  the Company
          has agreed to compensate her according to the Company's pro rata share
          (assuming  a 40 hour work week) of a base  salary of $5,000 per month,
          for time actually devoted to her duties on behalf of the Company. This
          compensation  is paid at the end of each month,  and is paid partly in
          cash and partly in an amount of the Company's  common stock calculated
          by using the average  closing  transaction  price of the stock for the
          month then ended.

          Effective  June 18, 2001,  the Company  engaged an  individual  as its
          general counsel.  As consideration  for his services,  the Company has
          agreed to  compensate  him  according to the  Company's pro rata share
          (based on the  number of  Yankees'  clients  for whom he is  providing
          legal services) of (1) his current base salary of $40,000 per year and
          (2) $2,500 per month in common stock. The stock portion is paid at the
          end of  each  month,  and  is  paid  by an  equivalent  amount  of the
          Company's  common  stock  calculated  by  using  the  average  closing
          transaction price of the stock for the month then ended.

     (C)  Bell South Agreement

          In November 1999, the Company  entered into a two-year  agreement with
          Bell South  Telecommunications,  Inc. to become an  alternative  local
          exchange telecommunications company ("CLEC") in stipulated states. The
          Company has not activated its service and has no obligation  under the
          agreement until usage begins.

                                      F14
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999

Note 10   Legal Matters

     (A)  The Company Versus ITA

          In September  1998,  ITA  defaulted in its payments to T2U Co.,  doing
          business as RCP, for services  rendered to third  parties,  payment of
          which  was   collected   by  ITA.   Thereafter,   RCP  and  two  other
          corporations,  Psychic Discovery  Network,  Inc.  ("PDN"),  a Delaware
          corporation  affiliated with the Company  through common  ownership by
          the  principal  shareholder  of PDN's parent,  Viatech  Communications
          Group, Inc. and BLJ Communications,  Inc., a Florida corporation,  all
          creditors  of  ITA,  filed  a  petition   seeking  ITA'S   involuntary
          bankruptcy pursuant to Chapter 7 of the United States Bankruptcy Code.
          It is management's  assertion that a favorable outcome for the Company
          is not likely.

      (B) Filing of Litigation:  Deutsche Financial Services  Corporation versus
          BTS, Mr. Peplin, and the Company

          Subsequent  to the balance  sheet date,  on October 8, 1999,  Deutsche
          Financial Services  Corporation caused a Consent  Arbitration Award in
          the amount of  $348,858  plus  interest at the per annum rate of prime
          plus 6.5% from August 1, 1998 less any sums  received  pursuant to the
          Extension  Agreement  referred  to below,  to be entered  against  the
          Company and others based on the Company's purportedly having consented
          to such award.  The  Company  signed the  Consent  Award after  having
          signed a loan  extension  agreement  (the  "Extension  Agreement")  in
          August  of  1998,  along  with the  Company's  former  President  (Mr.
          Peplin).  Because  the  Company  agreed to the terms of the  Extension
          Agreement,  and the  accompanying  Consent  Arbitration  Award, on the
          express  condition  that two additional  parties (Mr. and Mrs.  Sethi)
          would sign them both and be similarly bound by them, and because these
          additional  parties did not sign the Extension  Agreement by September
          15,  1998,  the time that the  payment of  $348,858  was due under the
          Extension  Agreement,  the Company  repudiated its signing of both the
          Extension  Agreement and the Consent  Arbitration Award.  Accordingly,
          the Company  takes the  position  that the Consent  Arbitration  Award
          exceeded the jurisdiction of the arbitration and consequently,  is not
          binding and enforceable.  (See Note 6 for contingent liability accrued
          as of September 30, 2000.)

     (C)  Ziff Davis, Inc. vs. BTS

          On February 12, 1999,  Ziff-Davis  filed an action for damages against
          BTS. A material  judgment was entered against BTS on July 26, 1999 for
          $133,348  plus  interest at 10% through  December  31, 1999 and at the
          Florida legal rate thereafter. At the time of the judgment, BTS was no
          longer a subsidiary of the Company.  Management of the Company and its
          counsel believe that absent the ability to "pierce the corporate veil"
          no liabilities attributable to BTS should affect the Company.

      (D) Various Creditor Claims

          The Company has judgments and claims against it aggregating  $101,300.
          The $101,300  was expensed in 1999 and remains  accrued by the Company
          as of September 30, 2000.

Note 11  Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  Except  for  recently  initiated
consulting activities,  the Company has no other active business operations, has
recurring  losses,  had cash used in  operations  of  $36,568  in 2000 and had a
working capital deficiency of $722,021 and an accumulated deficit of $17,505,061
at September  30,  2000.  These  conditions  raise  substantial  doubt about the
Company's ability to continue as a going concern.

The Company  maintains a license as a telephone service reseller with Bell South
and   management   looks   to   expand   on  such   operations,   or   locate  a
merger/acquisition candidate.

                                      F15
<Page>


                                 Colmena Corp.
                          Notes to Financial Statements
                    Years Ended September 30, 2000 and 1999


Note 12  Subsequent Events

     (A)  Stock Issuances

          On  November  8, 2000 (the  "Settlement  Date"),  the  Company  became
          obligated to issue  100,000 of its common shares under a court ordered
          settlement stipulation.  The shares were physically issued in February
          2001 to settle an obligation  of Tio Mariano  Cigar Corp.,  a divested
          subsidiary of the Company,  and any other unknown  obligations  of the
          Company.  The Company  recorded a $15,000 expense based on the trading
          price  of  the  common  stock  at the  Settlement  Date.  The  expense
          represents  the  write-off of the amount due from that  subsidiary  to
          settle its obligation.

          On May 30, 2001 (the  "Settlement  Date"),  the Company settled a note
          payable  of  $100,000  plus  accrued  interest  of  $38,333 by issuing
          1,844,444 of the Company's common stock to the creditor who was also a
          consultant.  Based on the $0.075  trading price of the common stock on
          the  Settlement  Date,  the Company had no gain or loss on settlement.
          The settlement  also  terminated all potential  obligations  under the
          consulting agreement. (See Note 5)

          In July 2001,  2,000,000 of the 8,670,552 common shares issuable under
          the consultant warrants were issued.

          As of May 2001,  the  Company is  obligated  to issue  200,000  common
          shares to a former  president and current  Chairman of the Board under
          his employment agreement, which has terminated (see Note 9).

     (B)  Warrants and Options

          The Company granted options to purchase 400,000 shares of common stock
          to directors  and officers in January  2001,  at an exercise  price of
          $0.05 per share,  for services.  These warrants expire on December 31,
          2002. Compensation expense will be recognized immediately based on the
          intrinsic value method under APB 25.

          The Company  granted options to purchase 36,000 shares of common stock
          to two  directors  in July  2001 at an  exercise  price of  $0.02  for
          services  performed in year 2000.  These options  expire  December 31,
          2002.  An expense of $2,880 was  recognized  immediately  based in the
          intrinsic value method under APB 25.



                                    Page F16
<Page>



ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

     In response to this item, our Company incorporate by reference its response
to Item 4 of our  Company's  report on Form 8-KSB filed with the  Commission  on
June 25, 2001, as permitted by Commission Rule 12b-23.

                                    PART III

ITEM 9.   DIRECTORS,   EXECUTIVE  OFFICERS,  PROMOTERS   AND  CONTROL   PERSONS;
            COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Directors and Executive Officers

     As of September  30, 2000,  the following  persons  served as our Company's
directors and executive officers:

Name                     Age (1)  Term (2)  Positions
----                     -----    --------  ---------
Anthony Q. Joffe         58       (3)(4)    President, director, chairman of the
                                               board of directors
Charles J. Champion, Jr. 34       (3)(5)    Director  and  member  of  the audit
                                              committee
Vanessa H. Lindsey       30       (3)(6)    Secretary and director
Lawrence R. Van Etten    64       (7)       Director
Robert S. Gigliotti      52       (8)       Director


Material Subsequent Event

     As of August  31,  2001,  the  following  persons  served as our  Company's
directors and executive officers:

Name                     Age (1) Term (2)  Positions
----                     ------  --------  ---------
Anthony Q. Joffe         58      (3)(4)   Director , chairman  of the board of
                                            directors.
Charles J. Champion, Jr. 34      (3)(5)   Director  and  chairperson   of  the
                                            audit committee
Vanessa H. Lindsey       30      (3)(6)   Vice-President, Secretary and Director
Lawrence R. Van Etten    64      (7)      Director
Kevin W. Dornan          49      (9)      General counsel
Robert S. Gigliotti      52      (8)      Director  and  member  of   the  audit
                                            committee
Edward C. Dmytryk        55      (10)     President, Chief Executive Officer and
                                            Director

                                    Page 13
<Page>



(1)  As of August 31, 2001.
(2)  All  directors  were  elected  for a term ending at such time as his or her
     successor  is  elected  at  the  next  annual   meeting  of  our  Company's
     stockholders  and is  qualified in office,  and all  officers  serve at the
     pleasure of the board of directors,  subject to any  contractual  rights to
     compensation  that may  survive  their  termination.
(3)  Term started on January 12, 1999.
(4)  Mr.  Joffe was elected as a member of our  Company's  board of directors on
     January 12, 1999,  as the chairman of our  Company's  board of directors in
     March  1999,  as our  Company's  president  on May 4, 1999 and  resigned as
     President and Chief  Executive  Officer on May 14, 2001, but remains as its
     Chairman and a director.
(5)  Mr.  Champion  became the chairperson of the audit committee on November 4,
     1999.
(6)  Mrs. Lindsey was elected as our Company's secretary on January 12, 1999, as
     a member of our Company's  board of directors  effective  February 1, 2000,
     and as our Company's Vice-President on June 14, 2001.
(7)  Mr. Van Etten was elected as a member of our  Company's  board of directors
     on May 31, 2000.
(8)  Mr.  Gigliotti was elected as a member of our Company's  board of directors
     on December  11, 1997,  and a member of the audit  committee on October 27,
     2000.
(9)  Mr. Dornan was elected as our Company's  general counsel effective June 18,
     2001.
(10) Mr. Dmytryk was elected as a member of our Company's board of directors and
     as its president and chief executive officer on May 14, 2001.

Biographies of Directors and Executive Officers

Anthony Q. Joffe,
Director and Chairman, Former President and Chief Executive Officer.

     Mr.  Joffe's  biography is  incorporated  by reference  from our  Company's
report on Form 10-KSB for the fiscal year ended September 30, 1998, as permitted
by Commission Rule 12b-23.

Edward C. Dmytryk,
Director, President and Chief Executive Officer.

     Mr.  Dmytryk's  biography is  incorporated  by reference from our Company's
report on Form 10-QSB for the quarter  ended March 31,  1999,  as  permitted  by
Commission Rule 12b-23.

Charles J. Champion, Jr.,
Director, current audit committee chair.

     Mr.  Champion's  biography is  incorporated by reference from our Company's
report on Form 10-KSB for the fiscal year ended September 30, 1998, as permitted
by Commission Rule 12b-23.

Vanessa H. Lindsey,
Vice-President, secretary and director.

     Mrs.  Lindsey's  biography is  incorporated by reference from our Company's
report on Form 10-KSB for the fiscal year ended September 30, 1998, as permitted
by Commission Rule 12b-23.





                                    Page 14
<PAGE>



Robert S. Gigliotti,
Director, audit committee member.

     Mr.  Gigliotti's  biography is incorporated by reference from our Company's
report on Form 10-KSB for the fiscal year ended September 30, 1998, as permitted
by Commission Rule 12b-23.

Lawrence R. Van Etten,
Director.

     Mr. Van Etten's  biography is  incorporated by reference from our Company's
report on Form 10-KSB for the fiscal year ended September 30, 1999, as permitted
by Commission Rule 12b-23.

Kevin W. Dornan, Esquire,
General Counsel

     Mr.  Dornan's  biography is  incorporated  by reference  from our Company's
report on Form 10-KSB for the fiscal year ended September 30, 1999, as permitted
by Commission Rule 12b-23

Other Material Personnel

     In  addition to our  Company's  directors  and  executive  officers,  since
January 1999 William A. Calvo,  III and Leonard  Miles Tucker have also provided
material  services  to our  Company  through  Yankees,  in which  they  serve as
directors and executive  officers and which they and their families own. Because
Yankees  has the right to  acquire  up to 75% of our  Company's  securities,  it
should also be deemed a control person of our Company.

Family Relationships.

     There are no family  relationships among the current officers and directors
of our Company.

Involvement in Certain Legal Proceedings.

     Based on information  provided in response to our Company's  legal counsel,
except as otherwise disclosed in this report, during the five year period ending
on  September  30,  2000,  no current  director,  person  nominated  to become a
director or executive officer,  and no promoter or control person of our Company
has been a party to or the subject of:

(1)  Any  bankruptcy  petition  filed by or against  any  business of which such
     person was a general partner or executive officer either at the time of the
     bankruptcy or within two years prior to that time;

(2)  Any  conviction  in a criminal  proceeding or has been subject to a pending
     criminal   proceeding   (excluding   traffic  violations  and  other  minor
     offenses);

(3)  Any order,  judgment,  or decree, not subsequently  reversed,  suspended or
     vacated, of any court of competent jurisdiction, permanently or temporarily
     enjoining, barring, suspending or otherwise limiting his or her involvement
     in any type of business, securities or banking activities; and

(4)  Been found by a court of competent  jurisdiction  (in a civil action),  the
     Commission or the Commodity  Futures Trading  Commission to have violated a
     federal or state  securities or  commodities  law, and the judgment has not
     been reversed, suspended, or vacated.

Compliance with Section 16(a) of the Exchange Act

     To the best of our Company's knowledge,  no one subject to Section 16(a) of
the Exchange Act engaged in any transactions in our Company's  securities during
fiscal  year 2000,  except  with  reference  to receipt of  securities  from our
Company as described in this report.




                                     Page 15
<PAGE>



ITEM 10.  EXECUTIVE COMPENSATION.

Summary Compensation Table
<Table>
<S>                <C>     <C>       <C>       <C>          <C>                <C>           <C>

                  Annual Compensation                Awards                          Payouts
                                                                    Securities
                                            Other                   Underlying       Long
Name and                                    Annual   Restricted     Options &        Term           All
Principal                                   Compen-  Stock          Stock Apprecia-  Incentive      Other
Position          Year     Salary   Bonus   sation   Awards         tion Rights      Payouts        Compensation
-------------     ----     ------   -----   ------   ------         -----------      -------        ------
Mr. Joffe (1)     2000     *        *       *        200,000        *                *              *
Mr. Joffe (1)     2001     *        *       *        *              200,000          *              *
Mr. Dmytryk       2001     (2)      *       *        *              *                *              *
Mrs. Lindsey      2001     (2)      *       *        *              *                *              *
Mr. Dornan        2001     (2)      *       *        *              *                *              *

</Table>

(1)  Mr.  Joffe was elected as a member of our  Company's  board of directors on
     January 12, 1999,  as the chairman of our  Company's  board of directors in
     March  1999,  as our  Company's  president  on May 4, 1999 and  resigned as
     President and Chief Executive Officer on May 14, 2001.

(2)  See Employment  Contracts,  Termination of Employment and Change in Control
     Arrangements; Material Subsequent Events section below.

*    Not Applicable

Options and Stock Appreciation Rights Grants Table

For Fiscal Year Ended September 30, 2000:

                Quantity of        Percentage of Total
                Securities         Options or Stock
                Underlying         Appreciation      Exercise
                Options & Stock    Rights Granted    or Base
                Appreciation       to Employees      Price Per  Expiration
Name            Rights Granted     In Fiscal Year    Share      Date
----            --------------     --------------    -----      -----
Mrs. Lindsey    24,000             100%             $0.02     December 31, 2002

Aggregated Option  &  Stock Appreciation  Right Exercises  and  Fiscal  Year-End
Options & Stock Appreciation
Rights Value Table

                                          Number of
                                          Securities
                                          Underlying
                                          Options &      Value of
                                          Stock          Unexercised
                                          Appreciation   In-the-Money
                 Shares                   Rights at      Options & Stock
                 Acquired      Value      Fiscal         Appreciation Rights
Name             On Exercise   Realized   Year End       at Fiscal Year End
----             -----------   --------   --------       ------------------
None


                                     Page 16


<PAGE>


Long Term Incentive Plan Awards Table

Long Term Incentive Plans - Awards in Last Fiscal Year


                                       Performance
                           Number      or Other
Name                       of Units    Period Until
of                         or Other    Maturation
Executive Officer          Rights      or Payout   Threshold   Target  Maximum
-----------------          ------      ---------   ---------   ------  -------
Not Applicable

Compensation of Directors

Standard Arrangements

     As of December 30, 2000,  the members of our  Company's  board of directors
and officers were  compensated  through the grant of warrants to purchase shares
of our Company's common stock, as disclosed in the following table:

                                  Date of    Expiration  Exercise    Underlying
Name & Category                   Option     Date        Price         Shares
---------------                   ------     ----        -----         ------
Anthony Q. Joffe (1)(4)           (5)        (8)         $0.02         72,000
Charles J. Champion, Jr. (1)(4)   (5)        (8)         $0.02         72,000
Robert S. Gigliotti (1)(4)        (5)        (8)         $0.02         60,000
Penny Fields(1)(4)                (5)        (8)         $0.02          8,000
Vanessa H. Lindsey (1)(4)         (5)        (8)         $0.02         60,000
Vanessa H. Lindsey (2)            (5)        (8)         $0.02         24,000
Robert S. Gigliotti (1)(3)        (6)        (9)         $0.05         70,000
Lawrence R. Van Etten (1)(4)      (7)        (8)         $0.02         28,000
David K. Cantley(1)(4)            (7)        (8)         $0.02          8,000
------
(1)      Director
(2)      Officer
(3)      Director compensation for the year 1999.
(4)      Director compensation for the year 2000.
(5)      January 3, 2000
(6)      Mr. Gigloitti was  omitted  from the  minutes in 1999; the minutes were
         corrected March 14, 2000.
(7)      July 27, 2001
(8)      December 31, 2002
(9)      In January of 2000 the warrants were  extended to January 12, 2001;  in
         January of 2001,the warrants were extended until January 12, 2002.

     At Yankees  recommendation,  on January 3, 2000, our Company adopted a plan
to compensate  its directors  based on set  quantities of options for service on
the board of directors and for services on committees of the board of directors,
for services chairing the board of directors and its committees; with forfeiture
provisions in the event of non- participation. Because the plan was not ratified
by the  stockholders  within one year after its  adoption,  no  incentive  stock
options  may be issued  thereunder,  and the plan is now  limited to issuance of
non-qualified stock options, as determined under the Internal Revenue Code.

Material Subsequent Event

     As of August 31, 2001, the members of our Company's board of directors were
compensated  through the grant of warrants to purchase  shares of our  Company's
common stock, as disclosed in the following table:

                             Date of   Expiration    Exercise         Underlying
Name & Category              Option    Date          Price            Shares
---------------              ------    ----          -----            ------
Anthony Q. Joffe (1)         (2)       (3)          $0.05            100,000
Charles J. Champion, Jr.(1)  (2)       (3)          $0.05            100,000
Robert S. Gigliotti (1)      (2)       (3)          $0.05            100,000
Vanessa H. Lindsey (1)       (2)       (3)          $0.05            100,000
------------
(1)      Directors  who have  served on the board  for one or more   years and
         received additional compensation
(2)      January 11, 2001
(3)      December 31, 2002


                                     Page 17


<PAGE>





Employment Contracts, Termination  of   Employment   and  Change   in    Control
  Arrangements.

     During  the  fiscal  year  that  started  on  October  1, 1999 and ended on
September 30, 2000,  our Company had no  employment  contracts,  termination  of
employment or change in control arrangements with any of its executive officers,
except as set forth below.

Employment Agreements

Mr. Joffe

     On May 4, 1999, our Company's  board of directors  elected Anthony Q. Joffe
as its  president.  The  agreement  was for a term  of one  year,  with  renewal
thereafter  from year to year unless the  Company or Mr.  Joffe gave at least 60
days notice prior to the end of the then - current  term of an intention  not to
renew, and contained confidentiality & non-competition clauses. Mr. Joffe was to
be  compensated  for his services with 200,000  shares of the  Company's  common
stock,  provided  he  remained  employed  for  365  consecutive  days,  was  not
discharged  for  cause,  and  complied  with all of his  obligations  under  the
employment  agreement.  A copy of the Joffe employment agreement was filed as an
exhibit to our Company's  report on Form 10-KSB for the year ended September 30,
1998.

     As a material  subsequent  event Mr. Joffe gave the required  notice of his
intention  not to  renew  after  the  initial  1 year  term,  and the  agreement
terminated as of May 3, 2001. A copy of the Joffe employment agreement was filed
as an  exhibit  to our  Company's  report  on Form  10-KSB  for the  year  ended
September 30, 1998.

Mrs. Lindsey

     On January 12, 1999, our Company's  board of directors  elected  Vanessa H.
Lindsey as its secretary.  Our Company has agreed to compensate Mrs. Lindsey for
her  services  as  secretary   until  December  31,  2000,  by  granting  her  a
non-qualified  stock  option  pursuant  to our  Company's  Stock  Option Plan to
purchase  24,000  shares of our  Company's  common stock at a price of $0.02 per
share,  exercisable  during the period starting on January 1, 2001 and ending on
December 31, 2002. A copy of the  agreement to serve as corporate  secretary was
filed as an exhibit to our  Company's  report on Form  10-KSB for the year ended
September 30, 1998.

Material Subsequent Events

     Effective June 14, 2001, our Company  entered into an employment  agreement
with Mr. Dmytryk pursuant to which he is engaged as our Company's  president and
chief executive  officer.  The agreement is for a term of one year, with renewal
thereafter  from year to year unless either our Company or Mr.  Dmytryk gives at
least 60 days' notice prior to the end of the then-current  term of an intention
not to renew,  and contains  confidentiality  and  non-competition  clauses.  As
consideration for Mr. Dmytryk's  services,  our Company has agreed to compensate
him  at  the  rate  of  $50.00  per  hour  of  services  to  our  Company,  plus
reimbursement for all reasonable expenses related thereto.  This compensation is
paid at the end of each month, and is currently paid by an equivalent  amount of
our Company's common stock  calculated by using the average closing  transaction
price of the stock for the month then-ended.  A copy of Mr. Dmytryk's employment
agreement was filed as an exhibit to our Company's report on Form 10-KSB for the
year ended September 30, 1999.

     Effective June 14, 2001, our Company  entered into an employment  agreement
with  Mrs.  Lindsey  pursuant  to which she is  engaged  as our  Company's  vice
president and secretary.  The agreement is for a term of one year,  with renewal
thereafter from year to year unless either our Company or Mrs.  Lindsey gives at
least 60 days' notice prior to the end of the then-current  term of an intention
not to renew,  and contains  confidentiality  and  non-competition  clauses.  As
consideration for Mrs. Lindsey's services,  our Company has agreed to compensate
her according to our Company's pro rata share  (assuming a 40 hour work week) of
a base salary of $5,000.00 per month, for time actually devoted to her duties on
behalf of our Company.  This  compensation is paid at the end of each month, and
is paid  partly in cash and partly in an amount of our  Company's  common  stock
calculated by using the average closing  transaction  price of the stock for the
month then-ended.  A copy of Mrs. Lindsey's employment agreement was filed as an
exhibit to our

                                     Page 18


<PAGE>



Company's report on Form 10-KSB for the year ended September 30, 1999.

     Effective June 18, 2001, our Company engaged Kevin W. Dornan,  Esquire,  as
its general counsel.  As consideration for his services,  our Company has agreed
to compensate him according to our Company's pro rata share (based on the number
of Yankees'  clients for whom he is providing legal services) of (1) his current
base salary of $40,000.00  per year and (2) $2,500.00 per month in common stock.
The stock portion is paid at the end of each month, and is paid by an equivalent
amount of our Company's  common stock  calculated  by using the average  closing
transaction price of the stock for the month then-ended.  A copy of Mr. Dornan's
engagement  agreement  was filed as an exhibit to our  Company's  report on Form
10-KSB for the year ended September 30, 1999.

Report of Re-Pricing of Options or Stock Appreciation Rights

     During the report period (October 1, 1999 until September 30, 2000), to the
best  knowledge  of our  Company,  the former  management  did not  re-price any
options or stock appreciation  rights previously granted to any of our Company's
executive officers, whether by amendment, cancellation or replacement grants, or
any other means.

     Except as  disclosed  below,  our Company  has not  adjusted or amended the
exercise price of stock options or stock appreciation  rights previously awarded
to any of the named directors or executive officers,  whether through amendment,
cancellation  or  replacement  grants,  or any  other  means,  nor are any  such
adjustments or amendments currently contemplated. As material subsequent events,
during the period  commencing on January 12, 1999 and ending on the date of this
report, our Company took the following actions:

1.   The consulting  agreement with Yankees was  renegotiated  during January of
     2000 at our  Company's  request,  due to its  inability to start making the
     cash  payments  called for by the  original  agreement.  As a result of the
     amendment,  Yankees  option was increased from the right to purchase 51% of
     our Company's  common stock for $40,000 to the right to purchase 75% of our
     Company's common stock for $80,000, in consideration for Yankees' agreement
     to waive its hourly and  licensing  fees for services to our Company  until
     December 31, 2000. On January 4, 2001, our Company and Yankees entered into
     a new strategic consulting  agreement,  pursuant to which Yankees will bill
     at its  standard  hourly  rates  for all work as to  which a prior  written
     arrangement  with different  terms has not been entered into;  however,  no
     hourly billable  services will be provided except at the Client's  specific
     request, and the service of Yankees' directors,  Messrs.  William A. Calvo,
     III,  and  Leonard  Miles  Tucker,  will be  provided  at the fixed rate of
     $10,000 (a  substantial  reduction in historical  fees accrued on an hourly
     basis) per month, in the aggregate,  payment for which will be deferred and
     accrued until adequate funds become  available.  The agreement also permits
     Yankees to accept payment in capital stock at the conversion rate of 50% of
     the fair market value of such stock.

2.   On or about January 3, 2000, the expiration  date of the options granted to
     the members of our Company's board of directors and its executive  officers
     who  assumed  office on and after  January 12,  1999,  was  extended  until
     January 12,  2001.  In January of 2001,  the options  were  extended  until
     January 12, 2002.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

As of the end of the Report Period

     As of September 30, 2000, our Company's only currently  outstanding  voting
securities  were  15,772,265  shares  of common  stock,  $0.01  par  value.  The
following  tables  disclose  information  concerning  ownership of our Company's
common stock by officers, directors and principal stockholders (holders of 5% or
more of our Company's  common stock) as of such date. Our Company's  outstanding
shares  of  common  stock  for  purposes  of these  calculations,  include  both
outstanding securities as of the report date and securities which a named person
had a right to acquire within 60 days  following the report date  (September 30,
2000). Consequently, the number of shares deemed outstanding for purposes of the
first table  (principal  stockholders)  will vary  materially  from those deemed
outstanding for purposes of the second table (executive officers and directors).

     Footnotes to all tables follow the second table after "Material  Subsequent
Events."

Security Ownership of Certain Beneficial Owners

     As of September 30, 2000,  the following  persons  (including  any "group")
were, based on information available  to our Company,  beneficial owners of more

                                     Page 19


<PAGE>



than  fivepercent  of our  Company's  common  stock  (its  only  class of voting
securities). Of the number of shares shown in column 2, the associated footnotes
indicate  the amount of shares with  respect to which such persons had the right
to acquire beneficial ownership as specified in Commission Rule 13(d)(1), within
60 days following the report date. For purposes of Table A,  39,113,369   shares
of our Company's common stock are assumed to be outstanding.

                                           Amount
                                           and Nature                Percent
                                           Of Beneficial             of
Name and Address of Beneficial Owner (1)   Ownership (2)             Class
----------------------------------------   -------------             -----
Richard C. Peplin, Jr.                      2,202,041 (3)             5%
25100 Detroit Road;
Westlake, Ohio 44145

The Yankee Companies, Inc.
(and its affiliates)(4)(5)                  8,000,000 (5)             20%
2500 North Military Trail, Suite 225;
Boca Raton, Florida 33431.


Security Ownership of Management

     As of September  30, 2000,  the  following  table  discloses  our Company's
common stock (the only outstanding  class of equity  securities for our Company,
its parents or  subsidiaries  held by persons other than our Company) other than
directors' qualifying shares,  beneficially owned by all directors and nominees,
naming them each; each of the named executive officers as defined in Item 402(a)
of Commission  Regulation S-B; and, all directors and executive  officers of our
Company as a group,  without  naming them. The table shows in column 2 the total
number of shares  beneficially  owned and in column 4 the percent owned.  Of the
number of shares shown in column 2, the associated footnotes indicate the amount
of shares,  if any,  with respect to which such persons had the right to acquire
beneficial  ownership as specified in Commission  Rule 13(d)(1),  within 60 days
following the report date. For purposes of this table,  16,142,265 shares of our
Company's common stock are assumed to have been outstanding based on the options
to acquire shares of our Company's common stock  exercisable  within the next 60
days held by the persons listed.

Name and Address of                       Amount         Nature of       Percent
Beneficial                                Of Equity      Beneficial      of
Owner    (1)                              Owned          Ownership       Class
-----    ---                              -------        ---------       -----
Robert S. Gigliotti                       160,000          (6)            0.01%
901 Wilshire Drive, Suite 400;
Troy, Michigan 48084

Anthony Q. Joffe                          270,000          (8)            0.02%
101 Southwest 11th Avenue;
Boca Raton, Florida 33486

Vanessa H. Lindsey                        220,000         (11)            0.01%
340 Southeast 55th Avenue;
Ocala, Florida 34471

Charles J. Champion                        70,000         (12)           0.005%
Post Office Box 952259;
Lake Mary, Florida 32795

Lawrence R. Van Etten                     136,147         (13)           0.005%
1601 North 15th Terrace;
Hollywood, Florida 33020

All officers and directors as a group     856,147          (2)              5 %

Material Subsequent Events

     Our  Company has issued a material  quantity of its common  stock (its only
class of outstanding  securities) since the report date (September 30, 2000). As
of August 31, 2001, our Company's only currently  outstanding  voting securities
are 19,975,212  shares of common stock,  $0.01 par value,  held by approximately
518 registered  holders of record and approximately 338 additional holders whose
securities are registered in "street name" (e.g., held in the names of   brokers

                                     Page 20


<PAGE>



or dealers in securities  or their  designees,  the  Depository  Trust  Company,
etc.). The following  tables disclose  information  concerning  ownership of our
Company's  common  stock  by  officers,  directors  and  principal  stockholders
(holders of 5% or more of our Company's common stock).  Our Company's  currently
outstanding  shares of common  stock,  for purposes of these  calculations,  are
calculated  based on  information  available as of August 31, 2001,  and include
both currently  outstanding  securities and securities that a named person has a
right to acquire within 60 days following the date of this report. Consequently,
the  number  of shares  deemed  outstanding  for  purposes  of the  first  table
(principal  stockholders) will vary materially from those deemed outstanding for
purposes of the second table (executive officers and directors).

Security Ownership of Certain Beneficial Owners

     As of August 31, 2001, the following  persons  (including any "group") are,
based on information  available to our Company,  beneficial  owners of more than
five  percent  of  our  Company's   common  stock  (its  only  class  of  voting
securities). Of the number of shares shown in column 2, the associated footnotes
indicate  the amount of shares with respect to which such persons have the right
to acquire beneficial ownership as specified in Commission Rule 13(d)(1), within
60 days following the date of this report.  For purposes of Table A,  58,572,844
shares of our Company's  common stock are assumed to be outstanding.

                                                Amount
                                                and Nature              Percent
                                                Of Beneficial           Of
                                                Ownership (2)           Class
Name and  Address  of  Beneficial  Owner (1)
----------------------------------------        -------------           -----
Tucker  Family  Spendthrift  Trust (4)          4,546,250               8%
2500 North  Military  Trail,
Suite 225; Boca Raton, Florida 33431.

The Yankee Companies, Inc.
(and its affiliates) (4)(5)                    38,856,133               66%
2500 North Military Trail, Suite 225;
Boca Raton, Florida 33431.

Calvo Family Spendthrift Trust (6)              3,756,250               6%
1941 Southeast 51st Terrace;
Ocala, Florida 34471

Security Ownership of Management

     As of August 31, 2001, the following Table  discloses our Company's  common
stock (the only  outstanding  class of equity  securities  for our Company,  its
parents or  subsidiaries  held by persons  other  than our  Company)  other than
directors' qualifying shares,  beneficially owned by all directors and nominees,
naming them each; each of the named executive officers as defined in Item 402(a)
of Commission  Regulation  S-B; and all directors and executive  officers of our
Company as a group,  without  naming them. The table shows in column 3 the total
number of shares  beneficially  owned and in column 4 the percent owned.  Of the
number of shares shown in column 2, the associated footnotes indicate the amount
of shares,  if any, with respect to which such persons have the right to acquire
beneficial  ownership as specified in Commission  Rule 13(d)(1),  within 60 days
following the date of this report. For purposes of this Table, 21,085,212 shares
of our Company's common stock are assumed to be outstanding based on the options
to acquire shares of our Company's common stock  exercisable  within the next 60
days held by the persons listed. Footnotes follow this table.


                                     Page 21


<PAGE>



Name and Address of                      Amount           Nature of      Percent
Beneficial                               Of Equity        Beneficial     of
Owner (1)                                Owned            Ownership      Class
---------                                -------          ----------     ------
Robert S. Gigliotti                      320,000          (7)             2%
901 Wilshire Drive, Suite 400;
Troy, Michigan 48084

Anthony Q. Joffe                         442,000          (8)             2%
101 Southwest 11th Avenue;
Boca Raton, Florida 33486

Vanessa H. Lindsey                       483,378          (11)            2%
340 Southeast 55th Avenue;
Ocala, Florida 34471

Charles J. Champion                      242,000          (12)            1%
Post Office Box 952259;Lake
Mary, Florida 32795

Lawrence R. Van Etten                    164,147          (13)            1%
1601 North 15th Terrace;
Hollywood, Florida 33020

Edward C. Dmytryk                         91,055          (9)             0.4%
315 Premier Vista Way;
St. Augustine, Florida 32080

Kevin W. Dornan, Esquire                  88,068         (10)             0.4%
5001 Southwest 20th Street;
Ocala, Florida 34474

All officers and directors as a group  1,830,648        (2)               9%

Footnotes to Tables of Principal  Stockholders and Tables of Executive  Officers
and Directors

         The following footnotes apply to the preceding four tables:

(1)  This table pertains to common stock, our Company's only outstanding  equity
     securities.
(2)  Beneficial and record.
(3)  Mr. Peplin served as our Company's president, chief executive officer, as a
     member of our  Company's  board of directors and as its chair from November
     10, 1997 until May 4, 1999 (except that he resigned as chairman on March 3,
     1999).  Lakewood  Mfg. Co. is an entity  controlled by Mr. Peplin and holds
     793,944 shares of our Company's common stock.

(4)  The Tucker  family is comprised of Michelle  Tucker,  Leonard Miles Tucker,
     her husband,  Shayna and Montana, their minor daughters and Jerrold Tucker,
     her father-in-law. Mr. Jerrold Tucker holds 440,000 shares in trust for his
     minor  granddaughters  and, in  addition,  250,000  shares are held by Mrs.
     Tucker,  100,000  shares  are held by Blue Lake  Capital  Corp.,  a Florida
     corporation  owned by Mrs.  Tucker  and  3,756,250  shares  are held by the
     Tucker Family Spendthrift Trust.

(5)  The Yankee Companies, Inc., is a Florida corporation, 50% of which is owned
     by members of the Tucker family and 50% which is owned by the Calvo family.

(6)  The Calvo family is comprised  of Cyndi Calvo,  William A. Calvo,  III, her
     husband, William, Alexander and Edward, their minor sons.
(7)  Mr.  Gigliotti has served as a member of our  Company's  board of directors
     since December 11, 1997, and a member of the audit committee since November
     4, 1999, and served as its secretary  until January 12, 1999.
(8)  Mr. Joffe has served as a member of our Company's  board of directors since
     January 12, 1999 to present,  as its president and chief executive  officer
     from May 4, 1999 to May 14, 2001.  Mr.  Joffe is entitled to an  additional
     200,000  common shares for his services  through May 2001.
(9)  Mr.  Dmytryk was elected as a member of our  Company's  board of directors,
     and as its president and chief executive  officer on May 14, 2001.
(10) Mr. Dornan was elected as our Company's  general counsel effective June 18,
     2001.
(11) Mrs. Lindsey was elected as our Company's secretary on January 12, 1999, as
     a member of our Company's  board of directors  effective  February 1, 2000,
     and as the Vice-President on June 14, 2001.
(12) Mr.  Champion  has served as a member of our  Company's  board of directors
     since January 12, 1999.
(13) Mr. Van Etten was elected as a member of our  Company's  board of directors
     on May 31, 2000.


                                     Page 22


<PAGE>





Changes in Control

     As of the end of the report period  (September 30, 2000),  material changes
in control  have  taken  place (see  "Part  III,  Item 9,  Directors,  Executive
Officers,  Promoters  and Control  Persons ...." for a discussion of how current
management  assumed  control of our Company  starting in January of 1999).  As a
result of the investments by Yankees and equity compensation to which Yankees is
entitled under its consulting  agreement with our Company,  our Company's former
principal  stockholder  (Mr.  Peplin)  can no longer  control  decisions  by our
Company's  stockholders,  although he has fully supported our Company's  current
management. Based on its current stock ownership and its option to acquire up to
75% of our Company's common stock, Yankees and its stockholders should be deemed
to currently  control our Company and to have the capacity to pass matters to be
acted  on at  stockholders  meetings.  Except  for the  foregoing,  to the  best
knowledge and belief of our Company, there are no arrangements,  understandings,
or  agreements  relative to the  disposition  of our Company's  securities,  the
operation of which would at a  subsequent  date result in a change in control of
our Company.

Parents of our Company

     As  defined  in  Rule  405 of  Commission  Regulation  C, a  "parent"  of a
specified person is an affiliate  controlling such person directly or indirectly
through one or more  intermediaries.  The same rule  defines an  affiliate  as a
person that directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, the person specified.

     The following  table  discloses all persons who were parents of our Company
(as such term is defined in Securities and Exchange Commission  Regulation C) as
of September 30, 2000,  showing the basis of control and as to each parent,  the
percentage of voting securities owned or other basis of control by its immediate
parent if any.

                                 Basis for         Percentage of Voting
Name                             Control           Securities Owned
----                             -------           ----------------
Yankees & it's shareholders         *                     80%

*    Stock  ownership,  options and  consulting  agreement.  The  discussion  of
     Yankees  association  with  our  Company  is  discussed  in  Part  I,  Item
     1,Description of Business of this report.  Leonard Miles Tucker, a resident
     of Boca Raton, Florida, serves as Yankees' president and as a member of its
     board of  directors;  William  A.  Calvo,  III,  serves  as  Yankees'  vice
     president,  treasurer and as a member of its board of directors; Vanessa H.
     Lindsey  (also an officer and director of our  Company)  serves as Yankees'
     secretary  and chief  administrative  officer.  Kevin W.  Dornan  (also our
     Company's  general counsel) serves as Yankee's general counsel.  Yankees is
     owned in equal  shares by members of Mr.  Tucker's  family and Mr.  Calvo's
     family.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The response to this Item,  as set forth  below,  is  supplemented,  to the
extent it is not inconsistent with this report, by information  contained in our
Company's  reports:  on Form  10-KSB for the year ended  September  30, 1998 and
1999;  and the current  report on Form 8-K filed with the Commission on June 25,
2001,  all hereby  incorporated  by reference,  as permitted by Commission  Rule
12b-23,

Materially Adverse Proceedings

     Our  Company  is not  aware  of any  proceedings  involving  its  executive
officers or directors adverse to our Company's interests.

Certain Business Relationships

As of the Report Date

     Except as specifically set forth below, none of our Company's  directors or
nominees for director:

                                     Page 23


<PAGE>



(1)  Was during  the fiscal  year ended  September  30,  2000 (the "2000  fiscal
     year"),  an  executive  officer of, or owned of record or  beneficially  in
     excess of ten percent  equity  interest  in, any  business or  professional
     entity that made or proposed to make during the 2000 fiscal year,  payments
     to our Company or its  subsidiaries  for  property or services in excess of
     five percent of (i) our Company's  consolidated gross revenues for the 2000
     fiscal year, or (ii) the other entity's consolidated gross revenues for its
     2000 fiscal year;

(2)  Was during the 2000  fiscal  year an  executive  officer  of, or owned,  or
     during the 2000 fiscal year owned,  of record or  beneficially in excess of
     ten percent  equity  interest  in, any business or  professional  entity to
     which our Company or its subsidiaries  made during the 2000 fiscal year, or
     proposed to make  during the 2000 fiscal  year,  payments  for  property or
     services in excess of five percent of (i) our Company's  consolidated gross
     revenues for its 2000 fiscal year, or (ii) the other entity's  consolidated
     gross revenues for its 2000 fiscal year;

(3)  Was during the 2000  fiscal  year an  executive  officer  of, or owned,  or
     during 2000 fiscal year had owned,  of record or  beneficially in excess of
     ten percent  equity  interest  in, any business or  professional  entity to
     which  our  Company  or its  subsidiaries  was  indebted  at the end of our
     Company's 2000 fiscal year in an aggregate amount in excess of five percent
     of our Company's total consolidated assets at the end of such fiscal year;

(4)  Was during the 2000  fiscal  year a member of, or of counsel to, a law firm
     that our Company retained during the 2000 fiscal year or proposed to retain
     during the 2000 fiscal year, which had or was expected to result in payment
     of fees  exceeding  five percent of the law firm's gross  revenues for that
     firm's last 2000 fiscal year;

(5)  Was  during the 2000  fiscal  year a partner  or  executive  officer of any
     investment banking firm that performed services for our Company, other than
     as a participating underwriter in a syndicate,  during the 2000 fiscal year
     or that our  Company  proposed  to have  perform  services  during the 2000
     fiscal year and the dollar amount of compensation received by an investment
     banking  firm  exceeded  or was  expected  to exceed  five  percent  of the
     investment banking firm's  consolidated gross revenues for that firm's 2000
     fiscal year; or

(6)  Was  during  the 2000 year  involved  in any other  relationships  that our
     Company is aware of between the nominee or director and our Company that is
     or was  substantially  similar in nature  and scope to those  relationships
     listed in paragraphs (1) through (5).

Material Subsequent Events

     Except as  specifically  set forth  below,  during the period  starting  on
October 1, 2000 and ending on August 31, 2001,  none of our Company's  directors
or nominees for director:

(1)  Is, or during the last fiscal year has been,  an  executive  officer of, or
     owns, or during the last fiscal year has owned,  of record or  beneficially
     in excess of ten percent equity  interest in, any business or  professional
     entity  that has made  during  our  Company's  last full  fiscal  year,  or
     proposes to make during our Company's current fiscal year,  payments to our
     Company or its  subsidiaries  for  property  or  services in excess of five
     percent of (i) our Company's  consolidated gross revenues for its last full
     fiscal year, or (ii) the other entity's consolidated gross revenues for its
     last full fiscal year;

(2)  Is, or during the last fiscal year has been,  an  executive  officer of, or
     owns, or during the last fiscal year has owned,  of record or  beneficially
     in excess of ten percent equity  interest in, any business or  professional
     entity  to which  our  Company  or its  subsidiaries  has made  during  our
     Company's  last full fiscal year,  or proposes to make during our Company's
     current  fiscal  year,  payments for property or services in excess of five
     percent of (i) our Company's  consolidated gross revenues for its last full
     fiscal year, or (ii) the other entity's consolidated gross revenues for its
     last full fiscal year;

(3)  Is, or during the last fiscal year has been,  an  executive  officer of, or
     owns, or during the last fiscal year has owned,  of record or  beneficially
     in excess of ten percent equity  interest in, any business or  professional
     entity to which our Company or its  subsidiaries was indebted at the end of
     our  Company's  last full fiscal year in an  aggregate  amount in excess of
     five percent of our Company's total consolidated  assets at the end of such
     fiscal year;


                                     Page 24


<PAGE>



(4)  Is, or during the last fiscal year has been, a member of, or of counsel to,
     a law firm that the issuer has  retained  during  the last  fiscal  year or
     proposes to retain during the current fiscal year, which has or is expected
     to result in payment of fees exceeding five percent of the law firm's gross
     revenues for that firm's last full fiscal year;

(5)  Is, or during the last fiscal year has been, a partner or executive officer
     of any investment banking firm that has performed services for our Company,
     other than as a participating  underwriter in a syndicate,  during the last
     fiscal year or that our Company  proposes to have perform  services  during
     the  current  year and the dollar  amount of  compensation  received  by an
     investment  banking firm  exceeded or is expected to exceed five percent of
     the investment  banking firm's  consolidated gross revenues for that firm's
     last full fiscal year; or

(6)  Is,  or  during  the  last  fiscal  year  has been  involved  in any  other
     relationships  that our Company is aware of between the nominee or director
     and our Company that is or was substantially similar in nature and scope to
     those relationships listed in paragraphs (1) through (5).


ITEM 13. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K.

Exhibits Required by Item 601of Regulation S-B

     The  response to this Item as  contained  in our  Company's  report on Form
10-KSB  for the year  ended  September  30,  1997,  1998  and  1999,  is  hereby
incorporated  by reference,  as permitted by Commission  Rule 12b-23,  except as
modified by the disclosure  contained in our  Company's:  reports on Form 10-QSB
for the quarters  ended  December 31, 1998 and March 31, 1999;  and, the current
reports on Form 8-K filed with the Commission on January 29, 1999,  February 12,
1999,  March 22,  1999,  May 18, 1999 and June 25, 2001,  and for the  following
additional exhibits filed herewith.  The exhibits listed below and designated as
filed herewith (rather than incorporated by reference) follow the signature page
in sequential order.

Designation      Page
of Exhibit       Number
as Set Forth     or Source of
in Item 601 of   Incorporation
Regulation S-B   By Reference   Description

(1)              *              Underwriting Agreement

(2)                             Plan of acquisition, reorganization,arrangement,
                                  liquidation or succession:

         2.1     (1)            Merger Agreement among  Sports-Guard,  Inc., RCP
                                  Enterprise, Inc. and RCP   Enterprises  Group,
                                  LLC, dated October 31, 1997
         2.2     (1)            Merger  Agreement among  Sports-Guard, Inc., Tio
                                  Mariano Cigar Corp.  and   Tio Cigars,   Inc.,
                                  dated October 31, 1997
         2.3     (8)            Agreement  for Purchase  and  Sale  of Assets By
                                  and among RCP Communications  Group, Inc.,
                                  Colmena  Corp.  and  Business   Technology
                                  Systems, Inc., dated February 19, 1998.

(3)      (i)                    Articles of incorporation:

         3.1     (2)            Certificate of  Incorporation  of  the  company,
                                  dated July 17, 1995.
         3.2     (1)            Certificate  of  Amendment  of  Certificate   of
                                  Incorporation of the Company,  dated  November
                                  10, 1997
         (ii)                   Bylaws:

         3.3     (2)            Bylaws of the company, dated July 17, 1995.
         3.4     (1)            Amended and Restated Bylaws of our Company,dated
                                  October 31, 1997.
         3.5     (8)            Amended  and  Restated  Bylaws  of  our Company,
                                  dated March 14, 2000.
         3.6     (32)           Amended and  Restated   ByLaws  of  our Company,
                                  dated September 17, 2001.


                                     Page 25


<PAGE>


Designation      Page
of Exhibit       Number
as Set Forth     or Source of
in Item 601 of   Incorporation
Regulation S-B   By Reference   Description

(4)                             Instruments  defining   the  rights of  holders,
                                  including indentures:
         4.1     (2)              Specimen Common Stock Certificate
         4.2     (2)              (Form of) Stock Purchase Warrant
         4.3     (3)              (Form of) 10% Convertible Notes
         4.4     (4)            Registrant's 1998 Stock Option  Plan and   Forms
                                  of Incentive Stock Option
                                Agreement  and    Non-Qualified   Stock   Option
                                  Agreement.
         4.5     (8)            Yankees Warrant Agreement, effective January  5,
                                  1999
         4.6     (8)            Common  Stock  Purchase  Warrants  between   the
                                  directors and officers of  our  Company, dated
                                  January 29, 1999.
         4.7     (8)            Yankees   Amended   Warrant   Agreement,   dated
                                  December 30, 1999
         4.8     (8)            Amended Common Stock Purchase  Warrants  between
                                  the  directors  and officers of  our  Company,
                                  dated January 3, 2000.
         4.9     (8)            Registrant's  2000  Non-qualified  Stock  Option
                                  & Stock Incentive Plan, dated January 3, 2000.

(5)              *              Opinion re: legality

(6)              *

(8)              *              Opinion re: tax matters

(9)                             Voting trust agreements

(10)                            Material Contracts:

         10.1    (5)            Yankee Consulting Agreement,dated January 5,1999

         10.3    (6)            Reorganization Agreement with Richard C. Peplin,
                                  Jr., dated March 25, 1999
         10.4    (8)            Financing Agreement,Amended Financing Agreement,
                                  Extension  Agreement with  Dueutsche  and BTS,
                                  dated February 26, 1997 and August 19, 1998.
         10.5    (8)            Customer  Billing  &  Collection  Contract  with
                                  International Telemedia  Associates, dated
                                  June 20, 1997.
         10.6    (8)            Loan  Agreement between  Wiseman  Family, Peplin
                                  and RCP, dated October 13, 1997.
         10.7    (8)            Consulting Agreement between  The Kaplan   Group
                                  and our Company, dated November  10,  1997
         10.8    (8)            Consulting Agreement between Robert S. Gigliotti
                                  and our Company, dated  November 10, 1997.
         10.9    (8)            Consulting   Agreement   between  Troy   Wiseman
                                  and our Company, dated November 10, 1997.
         10.10   (8)            Consulting Agreement and  Termination  Agreement
                                  between  Jeff  Outcalt and our Company,  dated
                                  November 10, 1997 and   May 1, 1998.
         10.11   (8)            Consulting  Agreement between Michael J. Feldman
                                   and our Company,dated November 10, 1997.
         10.12   (8)            Consulting  Agreement  between  Sohail  Quraushi
                                  and our Company, dated November 10, 1997.
         10.13   (8)            Purchase  Agreement  between Arnold Semler, Inc.
                                   and our Company, dated   November 10, 1997

                                     Page 26


<PAGE>


Designation      Page
of Exhibit       Number
as Set Forth     or Source of
in Item 601 of   Incorporation
Regulation S-B   By Reference   Description

         10.14   (8)            Employment Agreement  between  Madhu Sethi   and
                                  our Company, dated February 18, 1998.
         10.15   (8)            Consulting Agreement between  SBV Holdings, Inc.
                                  and our Company, dated February   25, 1998.
         10.16   (8)            Investment  Banking    and   Advisory   Services
                                  Agreement  with  Strategica  and  our  Company
                                  dated May 7, 1998.
         10.17   (8)            Employment Agreement between Richard C.  Peplin,
                                  Jr. and our Company, dated June 1, 1998.
         10.18   (8)            SBV Promissory Note, dated October 1, 1998.
         10.19   (8)            Settlement  Agreement  between  Madhu Sethi  and
                                  our Company, dated June 3, 1999.
         10.20   (8)            Supplemental Services Agreement between  Yankees
                                  and our Company, dated October 15, 1999
         10.21   (8)            Memorandum of Acquisition between  Fon   Digital
                                  Network, Inc. and TechTel Communications,Inc.,
                                  dated November 1999.
         10.22   (8)            Agreement   between  Registrant  and   BellSouth
                                  Telecommunications,dated November 22,1999.
         10.23   (8)            Yankees Second Amendment to Consulting Agreement
                                 dated January 2, 2000
         10.24   (8)            Agreement  to  Serve   as  Corporate   Secretary
                                  between Vanessa Lindsey and our Company, dated
                                  January 3, 2000.
         10.25   (8)            Employment agreement  between  Anthony  Q. Joffe
                                  and our Company, dated January 3, 2000.
         10.26   (8)            Settlement Agreement  between  Jack  Levine  and
                                  our Company, dated January 17, 2000.
         10.27   (8)            Settlement Agreement between Lawrence  Van Etten
                                  and our Company, dated May 11, 2000.
         10.28   (8)            Settlement Agreement  between  Troy  D. Wiseman,
                                  Richard C. Peplin,Jr. and our  Company,  dated
                                  May 31, 2000.
         10.29   (7)            Strategic  Consulting  Agreement  with  Yankees,
                                  dated January 4, 2001.
         10.30   (7)            Settlement  Agreement  between  Patrick   Graham
                                  and our Company, dated November 8, 2000.
         10.31   (10)           Clarification Agreement, dated July 6, 2001,  to
                                  the  Reorganization  Agreement    with
                                Richard C. Peplin, Jr., signed   on  March   25,
                                  1999
         10.32   (10)           Settlement Agreement between  SBV Holdings   and
                                  our Company, dated May 31, 2001
         10.33   (10)           Strategic Consulting Agreement between   Yankees
                                  and our Company dated,  January 4, 2001.
         10.34   (10)           Clarification Agreement,dated July 23, 2001,  to
                                  the  Employment  Agreement  with  Richard   C.
                                  Peplin, Jr., signed on June 1, 1998.
         10.35   (10)           Employment agreement between  Edward  C. Dmytryk
                                  and  our Company,  dated July 19, 2001.
         10.36   (10)           Employment agreement between Vanessa H.  Lindsey
                                  and our Company, dated July 19, 2001.
         10.37   (10)           Engagement  agreement  between  Kevin  W. Dornan
                                  and our Company, dated July 19, 2001.

(11)             F-3            Statement re computation of  per  share earnings

(13)             *              Annual or quarterly reports, Form 10-QSB

                                     Page 27


<PAGE>


                 Designation Page
of Exhibit       Number
as Set Forth     or Source of
in Item 601 of   Incorporation
Regulation S-B   By Reference   Description

(15)             *             Letter on unaudited interim financial information

(16)                            Letter on change in certifying accountant

         16.3    (9)            Letter   re Change  in   Certifying   Accountant
                                  Weinberg & Co.

(17)             **             Letter on director resignation

(18)             **             Letter re change in accounting principals

(19)             *              Reports furnished to security holders

(20)             **             Other  documents  or   statements  to   security
                                  holders  or  any  document  incorporated   by
                                  reference

(21)             **             Subsidiaries of our Company

(22)             **             Published report regarding matters submitted  to
                                  vote

(23)                            Consent of experts and counsel

(24)             **             Power of attorney

(25)             *              Statement re eligibility of trustee

(26)             *              Invitation for competitive bids

(27)             **             Financial data schedule

(99)                            Additional Exhibits:


-------
*        Not applicable

**       None

(1)  Filed as an exhibit to our  Company's  Report on Form 10-KSB for the fiscal
     year ended September 30, 1997, bearing the exhibit designation number shown
     above;  incorporated  by reference  herein as permitted by Commission  Rule
     12b-23.

(2)  Filed as an exhibit to our Company's  Registration  Statement on Form 10-SB
     filed  February  23,  1996,  bearing the exhibit  designation  number shown
     above;  incorporated  by reference  herein as permitted by Commission  Rule
     12b-23.

(3)  Filed as an exhibit to our Company's Registration Statement on Form 10-SB/A
     filed June 3, 1996,  bearing the exhibit  designation  number  shown above;
     incorporated by reference herein as permitted by Commission Rule 12b-23.

(4)  Filed  as an  exhibit to our Company's Report on Form 8-K dated January 29,
     1999, bearing the exhibit

                                     Page 28


<PAGE>



     designation  number  shown  above;  incorporated  by  reference  herein  as
     permitted by Commission Rule 12b-23.

(5)  Filed as an exhibit to our  Company's  registration  statement on Form S-8,
     registration  number  333-47999,  declared  effective by the Securities and
     Exchange  Commission on March 16, 1998, as exhibit 99.1; and,  incorporated
     by reference herein as permitted by Commission Rule 12b-23.

(6)  Filed as an exhibit  to our  Company's  Report on Form 8-K dated  March 22,
     1999, bearing the exhibit  designation number shown above;  incorporated by
     reference herein as permitted by Commission Rule 12b-23.

(7)  Filed  as an  exhibit  to our  Company's  Report  on  Form  10-QSB  for the
     quarter ended  December 31, 1998,  bearing the exhibit  designation  number
     shown above;  incorporated  by reference  herein as permitted by Commission
     Rule 12b-23.

(8)  Filed as an exhibit to our  Company's  Report on Form 10-KSB for the fiscal
     year ended September 30, 1998, bearing the exhibit designation number shown
     above;  incorporated  by reference  herein as permitted by Commission  Rule
     12b-23.

(9)  Filed as an  exhibit  to our  Company's  Report on Form 8-K dated  June 25,
     2001, bearing the exhibit  designation number shown above;  incorporated by
     reference herein as permitted by Commission Rule 12b-23.

(10) Filed as an exhibit to our  Company's  Report on Form 10-KSB for the fiscal
     year ended September 30, 1999, bearing the exhibit designation number shown
     above;  incorporated  by reference  herein as permitted by Commission  Rule
     12b-23.

Reports on Form 8-K Filed During Quarter Ended September 30, 2000

     During the calendar  quarters  ended  September 30, 2000, our Company filed
the following reports on Form 8-K with the Commission:

                            Financial
Items Reported              Statements Included                   Date Filed
--------------              -------------------                   ----------
None

     As material  subsequent  events, our Company filed the following reports on
Form 8-K with the Commission after September 30, 1999:

                            Financial
Items Reported              Statements Included                   Date Filed
--------------              -------------------                   ----------
4, 5 and 7                          No                            June 25, 2001

                                     Page 29


<PAGE>



                                   Signatures

     In accordance with Section 13 or 15(d) of the Exchange Act, as amended, our
Company  has  duly  caused  this  report  to be  signed  on  its  behalf  by the
undersigned hereunto duly authorized.

         Dated:   September 19, 2001

                                  Colmena Corp.


                           By: /s/Edward C. Dmytryk/s/
                       President & Chief Executive Officer


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed below by the  following  persons on behalf of our Company
and in the capacities and on the dates indicated:


Signature                        Date                      Title

/s/Edward C. Dmytryk/s/         September 19, 2001    President, Chief Executive
                                                        Officer, Director
/s/Vanessa H. Lindsey/s/        September 19, 2001    Vice President,  Secretary
                                                        & Director
/s/Charles J. Champion, Jr./s/  September 19, 2001    Director & Audit Committee
                                                        Member
/s/Robert S. Gigliotti/s/       September 19, 2001    Director & Audit Committee
                                                        Member
/s/Lawrence R. Van Etten/s/     September 19, 2001    Director
/s/ Anthony Q. Joffe/s/         September 19, 2001    Director, Chairman of the
                                                        Board

                                     Page 30


<PAGE>


                             Additional Information

                                  Colmena Corp.
                                   Registrant

                            Crystal Corporate Center;
                     2500 North Military Trail,Suite 225-D;
                           Boca Raton, Florida 33431
    Telephone Number: (561) 998-3435; Facsimile Transmission (561) 998-3425;
                     E-mail: administration@colmenacorp.com
                             Corporate Headquarters

             Edward C. Dmytryk, President & Chief Executive Officer;
 Vanessa H. Lindsey, Vice President, Secretary & Chief Administrative Officer;
                   Kevin W. Dornan, Esquire, General Counsel
                                     ------
                                    Officers

                    Anthony Q. Joffe, Chairman of the Board;
                              Robert S. Gigliotti;
                            Charles J. Champion, Jr.;
                              Vanessa H. Lindsey;
                             Lawrence R. Van Etten;
                               Edward C. Dmytryk
                                     ------
                               Board of Directors

      Salberg & Company, P.A. Certified Public Accountants and Consultants
             20283 State Road 7, Suite 300 Boca Raton, Florida 33498
        Telephone (561) 995-8270: Facsimile Transmission (561) 995-1920;
                           E-mail info@salbergco.com
                         Independent Public Accountants

                     American Stock Transfer & Trust Company
                    59 Maiden Lane; New York, New York 10007
        Telephone (212) 936-5100: Facsimile Transmission (718) 921-8326;
                            E-mail info@amstock.com
                                ----------------
                                 Transfer Agent

     Exhibits to this Form 10-KSB are available on the  Securities  and Exchange
Commission's  web site  located at  www.sec.gov  in the EDGAR  archives,  on our
Company's  website located at  www.colmenacorp.com  and will be provided without
charge to stockholders of our Company upon written request  addressed to Vanessa
H. Lindsey,  Secretary;  Colmena  Corp.;  1941  Southeast  51st Terrace;  Ocala,
Florida 34471.

     The Securities  and Exchange  Commission has not approved or disapproved of
this Form 10-KSB and Annual  Report to  Stockholders  nor has it passed upon its
accuracy or adequacy.

                                     Page 31


<PAGE>