U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                   FORM 10-QSB

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



                 For the fiscal quarter ended: December 31, 1999
                         Commission file number:0-27842


                                  COLMENA CORP.
             (Exact name of registrant as specified in its charter)


         Delaware                                                54-1778587
         (State or other jurisdiction of                      (I.R.S. Employer
         incorporation or organization)                      Identification No.)




                       2500 N. Military Trail, Suite 225-D
                            Boca Raton, Florida 33431
                    (Address of principal executive offices)
                                   (Zip code)

                                 (561) 998-2031
              (Registrant's telephone number, including area code)


Indicate by check mark whether  registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes No X

                         APPLICABLE TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:

On August  15,  2001,  the issuer had  outstanding  19,716,711  shares of common
stock, $.001 par value per share.



<PAGE>



                                  COLMENA CORP.

                                   FORM 10-QSB
                    QUARTERLY PERIOD ENDED DECEMBER 31, 1999
                                      INDEX


PART I - FINANCIAL INFORMATION

         Item 1 - Financial Statements

         Balance Sheet (Unaudited)
         As of December 31, 1999..............................................3
         Statements of Operations (Unaudited)
           For the Three Months Ended December 31, 1999 and 1998..............4
         Statements of Cash Flows (Unaudited)
           For the Three Months Ended December 31, 1999 and 1998............. 5

         Condensed Notes to Financial Statements...........................6-11

         Item 2 - Management's Discussion and Analysis of
                  Financial Condition and Results of Operations...........12-15


PART II - OTHER INFORMATION

         Item 1 - Legal Proceedings..........................................16

         Item 2 - Changes in Securities .....................................16

         Item 3 - Default upon Senior Securities.............................16

         Item 4 - Submission of Matters to a Vote of Security Holders........16

         Item 5 - Other Information..........................................16

         Item 6 - Exhibits and Reports on Form 8-K...........................16

         Signatures..........................................................17


                                     Page 2
<Page>



                                  COLMENA CORP.
                                  BALANCE SHEET
                                December 31, 1999
                                   (Unaudited)


                                    ASSETS
CURRENT ASSETS:
  Cash                                                                  $1,805
                                                                   ------------
  Total Current Assets                                                   1,805
                                                                   ------------
  Total Assets                                                          $1,805
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Accounts Payable and Accrued Expenses                               $221,146
  Notes Payable                                                        100,000
  Guaranteed Loan                                                      331,000
  Due to Shareholder                                                     1,200
                                                                   ------------
    Total Current Liabilities                                          653,346
                                                                   ------------
STOCKHOLDERS' DEFICIT:
  Common Stock ($.01 Par Value; 20,000,000 Shares Authorized;
    13,991,692 Shares Issued and Outstanding)                          139,917
  Additional Paid-in Capital                                        16,363,723
  Accumulated Deficit                                              (17,155,181)
                                                                   ------------
    Total Stockholders' Deficit                                       (651,541)
                                                                   ------------

    Total Liabilities and Stockholders' Deficit                         $1,805
                                                                   ============


                 The accompanying notes are an integral part of
                    these consolidated financial statements

                                     Page 3
<PAGE>


                                  COLMENA CORP.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)



                                                       For the Three Months
                                                        Ended December 31,
                                                      ----------------------
                                                     1999               1998
                                                  --------------  -------------

REVENUES                                            $         -    $    33,885

COST OF SALES                                                 -              -
                                                   -------------  -------------
GROSS PROFIT                                                  -         33,885
                                                   -------------  -------------

OPERATING EXPENSES:
  Compensation Expense                                        -         39,635
  Depreciation and Amortization                               -          1,500
  Consulting                                            235,094              -
  Professional and Legal Fees                                 -         14,133
Selling, General and Administrative                         221         37,875

  Total Operating Expenses                              235,315         93,143
                                                    ------------  -------------

                                                       (235,315)       (59,258)
                                                    ------------  -------------
LOSS FROM OPERATIONS

OTHER (EXPENSES):
  Interest Expense, net                                (16,500)        (43,349)

TOTAL OTHER EXPENSES                                   (16,500)        (43,349)
                                                    ------------  -------------
LOSS FROM CONTINUING OPERATIONS                       (251,815)       (102,607)

LOSS FROM DISCONTINUED OPERATIONS
 Loss From Operations                                        -         (21,270)
 Loss on Disposal                                            -               -
                                                    ------------  -------------
TOTAL LOSS FROM DISCONTINUED OPERATIONS                      -         (21,270)
                                                    ------------  -------------
NET LOSS                                             $(251,815)   $   (123,877)
                                                    ============  =============
BASIC AND DILUTED:
  Net Loss Per Common Share:
    Loss from Continuing Operations                  $   (0.02)   $      (0.02)
    Loss from Discontinued Operations                        -           (0.00)
                                                    ------------  -------------
                                                     $   (0.02)   $      (0.02)
                                                    ============  =============
  Weighted Common Shares Outstanding                13,991,692       7,741,697



                 The accompanying notes are an integral part of
                     these consolidated financial statements


                                     Page 4
<PAGE>


                                  COLMENA CORP.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                        For the Three Months Ended December 31,
                                        ---------------------------------------
                                                        1999             1998
                                                    ------------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss from Continuing Operations                $(251,815)      $(102,607)
  Adjustments to Reconcile Net Loss from
    Continuing Operations to Net  Cash
    Used in Continuing Operations:
      Depreciation and Amortization                          -           1,500
      Impairment Loss on Marketable Securities               -           3,400
      Stock Options issued to Consultants              235,094               -

      (Increase) Decrease in:
        Accounts Receivable                                  -           9,664
        Other Current Assets                                 -           3,217

      Increase (Decrease) in:
        Cash Overdraft                                       -          (7,672)
        Accounts Payable and Accrued Expenses           16,500          (33,090)
                                                   -----------      -----------
  Net Cash Flows Used in Continuing Operations           (221)        (125,588)
                                                   -----------      -----------
      Changes in Net Asset and Liabilites
       of Discontinued Operations                           -           40,440
                                                   -----------      -----------
  Net Cash Flows Provided by Discontinued Operations        -           19,170
                                                   -----------      -----------
  Net Cash Flows Used in Operating Activites             (221)        (106,418)
                                                   -----------      -----------

 CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of Property and Equipment                      -           (3,001)
                                                   -----------      -----------
   Net Cash Flows Used in Investing Activities              -           (3,001)
                                                   -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from Issuance of
    Notes Payable - Related Parties                         -            5,590
  Proceeds from Issuance of
    Notes Payable - Non-Related Parties                     -           75,278
  Due to Shareholder                                        -           22,500
                                                   -----------     ------------
Net Cash Flows Provided by Financing Activities             -          103,368

Net Decrease in Cash                                     (221)          (6,051)

Cash - Beginning of Period                              2,026            6,287
                                                   -----------     ------------

Cash - End of Period                               $    1,805      $       236
                                                   ===========     ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the year for:
  Interest                                         $        -      $         -
                                                   ===========     ============
  Income Taxes                                     $        -      $         -

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Equipment Repossessed in Exchange
    for Note Payable                               $  275,000      $         -
                                                   ===========     ============


                 The accompanying notes are an integral part of
                    these consolidated financial statements


                               Page 5
<PAGE>



                                 COLMENA CORP.
                         NOTES TO FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and  with the  instructions  to Form  10-QSB  and  Item  310(b)  of
Regulation S-B. Accordingly,  the financial statements do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
have  been  included  and  all  adjustments  considered  necessary  for  a  fair
presentation  have been included and such  adjustments are of a normal recurring
nature.

     These financial statements should be read in conjunction with the financial
statements for the year ended September 30, 1999 and notes thereto  contained in
the Report on Form 10-KSB of Colmena  Corp.  (our  "Company")  as filed with the
Securities  and Exchange  Commission.  The results of  operations  for the three
months ended December 31, 1999 are not necessarily indicative of the results for
the full fiscal year ending September 30, 2000.


NOTE 2 - CONSULTING AGREEMENT

Consulting Agreement between Our Company and the Yankee Companies, Inc.

     On January 5, 1999 (the  "Effective  Date"),  a consulting  agreement  (the
"Agreement")  was  entered  into by and  between  the  Company  and  the  Yankee
Companies,  Inc. (the "Consultant"),  a Florida  corporation.  The Agreement was
established  for a term of 730 days from the Effective  Date and will be renewed
automatically,  on a continuing  annual basis,  unless  terminated by one of the
parties 30 days prior to the  termination of the then current term. The services
provided by the Consultant were agreed to be the services,  on a reasonable,  as
required, basis, consistent with the Consultant's other business activities. The
Consultant's  areas of expertise  are mainly  comprised of corporate  structure,
organization,  and  reorganization,   mergers,  acquisitions  and  divestitures,
strategic corporate  development,  corporate financial and equity analysis,  and
other corporate  matters.  Furthermore,  the Consultant agreed to be responsible
for  administering  the expenditure of the proceeds  derived by the Company from
the  exercise  of  options  that  were  given to the  Consultant  as part of its
compensation  for the services  rendered  (see below) in order to implement  the
strategic  plans  developed by the  Consultant  and to settle and  discharge the
corporate  obligations of the Company.  In this role,  the Consultant  agreed to
establish and operate bank accounts for the Company,  using such  signatories as
the Consultant deems appropriate.

                                     Page 6
<Page>


                                 COLMENA CORP.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


NOTE 2 - CONSULTING AGREEMENT

Consulting Agreement between Our Company and the Yankee Companies, Inc.


     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 the 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 such time as exercise was
contemplated.  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 may be exercised from the 10th day until
the 365th day following the Effective Date. As a material  subsequent event, the
term of the Class A Option 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 1934 Exchange Act.

     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  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 consideration 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.


                                     Page 7
<Page>



                                 COLMENA CORP.
                   NOTES TO FINANCIAL STATEMENTS (Continued)


NOTE 2 - CONSULTING AGREEMENT

Consulting Agreement between Our Company and the Yankee Companies, Inc.

     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  Yankees'
preferential  rights to subscribe for additional  securities at a purchase price
of 50% of their fair market value.

     January 4, 2001, a third  amendment  changed the  consulting fee to $10,000
per month,  eliminating hourly and document licensing fees (a material reduction
in historical payments). All provisions from prior agreements regarding issuance
of warrants remain intact.

     Subsequent to the period ended  December 31, 1999,  5,341,674 and 5,833,332
additional  shares  became  subject  to the  warrants  issued to the  Consultant
documenting  its Class A Options rights in 2000 and 2001 resulting in an expense
of $197,031 and $460,000, respectively.

NOTE 3 - COMMON STOCK TRANSACTIONS AND STOCK OPTIONS AND WARRANTS GRANTED

     In connection  with the  consulting  agreement  between the Company and the
Consultant  as discussed in note 2 above,  an  additional  15,672,900  shares of
common  stock  became  subject  to the  Yankees'  warrants  as a result of their
anti-dilutive  provisions.  The fair value of the option grant was  estimated on
the  date of  grant  using  the  Black-Scholes  option-pricing  model  with  the
following  assumptions:  dividend  yield  of 0%;  expected  volatility  of 158%;
risk-free  interest rate of 5.1%,  and an expected life of 1 year.  Accordingly,
consulting  expense of $235,094  was  recognized  during the three  months ended
December 31, 1999 for the 15,672,900 warrants issued.

NOTE 4-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 is inactive, has recurring losses, and had a
working capital deficiency of $651,541 and an accumulated deficit of $17,155,181
at  December  31,  1999.  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.

NOTE 5 - SUBSEQUENT EVENTS

(A) 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.


                                     Page 8
<Page>



                                 COLMENA CORP.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE 5 - SUBSEQUENT EVENTS (Continued)

(B) Common Stock Issuances

     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.

     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.

     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 $4,084 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 October 2000, 200,000 common shares were issued under
a consulting agreement. An expense of $4,000 was recognized based on the trading
price on the vesting date.

     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 subsidiary of the Company,  which was
divested in March 1999, and any other unknown  obligations  of the Company.  The
Company  recorded a $15,000  expense  based on the  trading  price of the common
stock on the Settlement Date. The expense represents the write-off of the amount
due from that subsidiary to settle its obligation.


                                     Page 9
<Page>


                                 COLMENA CORP.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE 5 - SUBSEQUENT EVENTS (Continued)

(B) Common Stock Issuances

     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.

     In September 2000, 2,000,000 common stock warrants were exercised,  but not
issued until July 2001.


(C) Warrants and Options

     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 per share,
expiring  December 2002. A compensation  expense of $4,440 was recognized  under
the intrinsic value method of APB 25.

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

     The  Company  issued  5,341,674   warrants  and  5,833,332  warrants  to  a
consultant in fiscal years 2000 and 2001, respectively.  A consulting expense of
$197,031 and $460,000 was  recognized in 2000 and 2001,  respectively,  based on
the fair value options pricing method of SFAS 123.

     The Company  granted  options to purchase  36,000 shares of common stock to
two directors in July 2001, at an exercise price of $.02 per share, for services
performed in fiscal year 2000. A  compensation  expense of $2,880 was recognized
immediately based on the intrinsic value method under APB 25.

     The Company granted  options to purchase  400,000 shares of common stock to
directors and officers in January 2001, at an exercise  price of $.05 per share,
for services rendered.  These warrants expire on December 31, 2002. Compensation
expense will be recognized immediately based on the intrinsic value method under
APB 25.


                                     Page 10
<Page>


                                 COLMENA CORP.
                   NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE 5 - SUBSEQUENT EVENTS (Continued)

(D) Employment Agreements

     Effective June 14, 2001, the Company  entered into an employment  agreement
with an  individual  (the  "Employee")  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 Employee  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
on-competition  clauses.  As  consideration  for the  Employee's  services,  the
Company has agreed to compensate him at the rate of $50.00 per hour for 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  "Employee")  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
Employee 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 Employee'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 in 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.

     The Company anticipates borrowing the required payments from Yankees.


                                    Page 11
<Page>



ITEM 2.  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 Part
I, Item 1 of 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  itself  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 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, 1999 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, June 30, 2000 and 2001, March 31, 2000 and 2001 and the audit
for its fiscal year ended  September 30, 2000.  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
1,730,567  shares of common  stock,  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,  we currently have 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 12
<Page>



ITEM 2.  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  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.



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ITEM 2.  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.

     Three  months  ended  December  31,  1999  compared to three  months  ended
December 31, 1998.

     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. Our
Company  reported net losses from operations for the three months ended December
31, 1999 of $(251,815)  and net loss from  operations for the three months ended
December  31, 1998 of  $(102,607).  This  translates  to a  per-share  (loss) of
$(0.02) for the three  months  ended  December  31, 1999 and per share income of
$(0.02) for the three months ended December 31, 1998. Additionally,  our Company
reported a net loss from  discontinued  operations  for the three  months  ended
December 31, 1998 of $(21,270) or $(.00) per share. Our Company had no loss from
discontinued operations during the three months ended December 31, 1999.

     The net loss figures were based on corresponding revenues of $0 and $33,885
for the  three  months  ended  December  31,  1999 and 1998,  respectively.  The
decrease in net revenue and corresponding decrease in cost of revenue in 1999 as
compared to 1998 were attributable to the  discontinuation  of substantially all
of marketing and distributing of long-distance  telephone service calling cards.
Operating expenses rose to $235,315 for the three months ended December 31, 1999
as  compared  to $93,143 for the three  months  ended  December  31,  1998.  The
increase was due to the increased consulting fees resulting from the issuance of
common stock warrants amounting to approximately $235,094.

     Net cash used in investing  activities in the 1999 period was $-0- compared
to net cash used in  investing  activities  of $3,001 in the 1998  period.  This
difference was related to the purchase of equipment.

     Net cash  provided by financing  activities  in the 1999 period was $-0- as
compared to net cash  provided by financing  activities  of $103,368 in the 1998
period.  The difference was  attributable  to decreased  proceeds  received from
loans and shareholder advances.

     No additional meaningful comparisons can be made for the three months ended
December  31, 1999 as compared to the three  months  ended  December 31, 1998 in
that during the three months ended  December 31,  1998,  the  activities  of our
Company were unrelated.


                                    Page 14
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ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS (Continued)

     Three  months  ended  December  31,  1999  compared to three  months  ended
December 31, 1998

     The  effect  of the  board  of  directors'  decision  to  discontinue  past
operations  has had the effect of allowing  our Company in the near future to be
classified  as a  development  stage  company  prepared  to  conduct  profitable
business activities. Current revenues have been reduced to zero in contemplation
of new business opportunities being sought by our Company.

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.  As a  result,  the
Commission required  registrants  to report on their states of readiness to face
potential Year 2000 problems.  The following disclosure would have been accurate
prior to January 1, 2000:

     The inability of business processes to continue to function correctly after
the beginning of the Year 2000 could have serious  adverse  effects on companies
and  entities  throughout  the world.  Our Company  does not  currently  own any
computer  equipment  and thus  would not be  subject  directly  to any  problems
associated  with such Year 2000 problems.  It currently uses computer  equipment
provided by its  management and  consultants,  none of which would be materially
affected by Year 2000 software and hardware problems.  However,  in the event it
makes a material  acquisition,  such problems could affect the acquired entity's
operations and, to the extent that the problem affects national  communications,
financial or utility businesses in general, our Company,  like other businesses,
could be adversely affected. In the event that our Company experiences Year 2000
related  problems,  it would be forced to expend  such  amounts  of its  working
capital as might be  necessary  to correct the  affected  software  and hardware
systems and implement contingency plans.

     As a material  subsequent event, 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  December  31,  1999,  our  Company had a  stockholders'  deficiency  of
approximately $651,541. Our Company's future operations and growth are dependent
on our 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 Corporation,  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.



                                    Page 15
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PART II. OTHER INFORMATION

Item 1.   Legal Proceedings.


          As permitted by Commission  Rule 12b-23,  the response to this item is
          incorporated by reference from the corresponding item in our Company's
          report of Form 10-KSB for the fiscal year ended September 30, 1999.

Item 2.   Changes in Securities

          As permitted by Commission  Rule 12b-23,  the response to this item is
          incorporated by reference from the corresponding item in our Company's
          report of Form 10-KSB for the fiscal year ended September 30, 1999.

Item 3.   Defaults Upon Senior Securities

          As permitted by Commission  Rule 12b-23,  the response to this item is
          incorporated by reference from the corresponding item in our Company's
          report of Form 10-KSB for the fiscal year ended September 30, 1999.

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

          As permitted by Commission  Rule 12b-23,  the response to this item is
          incorporated by reference from the corresponding item in our Company's
          report of Form 10-KSB for the fiscal year ended September 30, 1998.

Item 5.   Other Information

          As permitted by Commission  Rule 12b-23,  the response to this item is
          incorporated by reference from the corresponding item in our Company's
          report of Form 10-KSB for the fiscal year ended September 30, 1999.

Item 6.  Exhibits and Reports on Form 8-K.


         (a)   Exhibits and Index of Exhibits

               As permitted by Commission Rule 12b-23, the response to this item
               is incorporated by reference from the  corresponding  item in our
               Company's  report  of Form  10-KSB  for  the  fiscal  year  ended
               September 30, 1999.

         (b)   Reports on Form 8-K

               Our Company filed a current  report on Form 8-K on June 25, 2001,
               which in Items 4 and 5,  reported  a change  in  auditors  and an
               election of an officer.

                                    Page 16
<Page>




                                   SIGNATURES

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


                                                     COLMENA CORP.


Dated:  August 24, 2001             By:  /s/ Edward C. Dmytryk/s/

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





                                    Page 17
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