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:                              March 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

                         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 May 31, 2001, the issuer had outstanding 15,872,265 shares of common stock,
$.001 par value per share.

                                     Page 1
<PAGE>



                         COLMENA CORP. AND SUBSIDIARIES
                                   FORM 10-QSB
                      QUARTERLY PERIOD ENDED MARCH 31, 1999
                                      INDEX







                                                                            Page

PART I - FINANCIAL INFORMATION

   Item 1 - Consolidated Financial Statements

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

         Condensed Notes to Consolidated Financial Statements............. 6-12

   Item 2 - Management's Discussion and Analysis of Financial Condition
         and Results of Operations........................................13-16


PART II - OTHER INFORMATION

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

   Item 2 - Changes in Securities and use of Proceeds........................16

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

   Item 4 - Submission of Matters to a Vote of Security Holders..............17

   Item 5 - Other Information................................................17

   Item 6 - Exhibits and Reports on Form 8-K.................................18

            Signatures.......................................................18

                                     Page 2


<PAGE>

                         COLMENA CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 March 31, 1999
                                   (Unaudited)

                                     ASSETS

CURRENT ASSETS:

    Cash                                                      $ 1,854
    Other Current Assets                                        3,179
                                                             --------
      Total Current Assets                                      5,033

    Equipment to be Repossessed under security agreement,
                         net of impairment                    275,000
                                                              --------
      Total Assets                                          $ 280,033
                                                            ==========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:

    Accounts Payable and Accrued Expenses                   $  20,470
    Notes Payable-Nonrelated Parties                          375,000
    Net Liabilities of Discontinued Operations                435,748
                                                             --------
      Total Current Liabilities                               831,218
                                                             --------
STOCKHOLDERS' DEFICIT:

    Common Stock ($.01 Par Value; 20,000,000 Shares Authorized;
        9,741,697 Shares Issued and Outstanding                97,417

    Additional Paid-in Capital                             16,105,268

    Accumulated Deficit                                   (16,753,870)
                                                          ------------


      Total Stockholders' Deficit                            (551,185)
                                                            ---------

       Total Liabilities and Stockholders' Deficit          $ 280,033
                                                           ==========


                                     Page 3
<PAGE>

                         COLMENA CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<S>                                                     <C>                             <C>                     <C>        <C>
                                                                For the Three Months                          For the Six Months
                                                                Ended March 31,                                 Ended March 31,
                                                      1999                      1998                          1999           1998

REVENUES                                            $ -                         $ 4,600,899                  $ -         $ 5,946,925
COST OF SALES                                         -                           2,612,586                    -           3,601,638
GROSS PROFIT                                          -                           1,988,313                    -           2,345,287
                                                     --                         ----------                   -----        ----------
OPERATING EXPENSES:
    Consulting                                      1,497,738                            -              1,497,738                  -
    Professional and Legal Fees                         6,776                            -                  6,776                  -
    Selling, General and Administrative                 2,309                       446,322                 2,318            523,494
                                                       ------                   ------------               ------           --------
                                                    1,506,823                       446,322             1,506,832            523,494
                                                    ----------                  ------------           ----------           --------
        Total Operating Expenses                   (1,506,823)                    1,541,991            (1,506,832)        1,821,793
                                                   -----------                  ------------           ------------        ---------

INCOME (LOSS) FROM OPERATIONS
OTHER (EXPENSES):
    Interest Expense, net                             (8,688)                             -              (17,375)                  -
    Loss on Impairment of Assets                           -                              -                    -                   -
                                                   ------------                 ------------             --------           -------
TOTAL OTHER EXPENSES                                  (8,688)                             -              (17,375)                 -
                                                      -------                   ------------            --------                 --

LOSS BEFORE INCOME TAX PROVISION                  (1,515,511)                     1,541,991           (1,524,207)          1,821,793

INCOME TAX PROVISION                                       -                        523,654                    -             623,654
                                                  -----------                   ------------           ----------           --------
LOSS FROM OPERATIONS                              (1,515,511)                     1,018,337           (1,524,207)          1,198,139
                                                  -----------                   ------------          ------------        ----------
LOSS FROM DISCONTINUED OPERATIONS

   Loss From Operations                              (10,907)                       (47,989)            (104,818)           (47,989)
   Gain (Loss) on Disposal                         1,509,495                              -            1,488,225                   -
                                                   ----------                   -------------          ----------        -----------
TOTAL LOSS FROM DISCONTINUED OPERATIONS            1,498,588                        (47,989)           1,383,407            (47,989)
                                                   ----------                   -------------          ----------           --------
NET INCOME (LOSS)                                  $ (16,923)                   $   970,348           $ (140,800)      $   1,150,150
                                                   ==========                   ============         ============       ============
BASIC AND DILUTED:
  Net Income (Loss) Per Common Share:
    Income (Loss) from Continuing Operations       $ (0.18)                     $      0.19              $ (0.19)            $ 0.23
    Gain (Loss) from Discontinued Operations          0.17                            (0.01)                0.17              (0.01)
                                                                                ------------              ------              ------
                                                   $ (0.00)                     $      0.18               $(0.02)            $ 0.22
                                                  ==========                    ===========              ========            =======
    Weighted Common Shares Outstanding             8,563,914                      5,457,163             8,148,285          5,227,997
                                                  ==========                    ============           ==========         ==========
</TABLE>

                                     Page 4
<PAGE>

                                               COLMENA CORP. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (Unaudited)
<TABLE>
<S>                                                                                     <C>                      <C>

                                                                                       For the Six Months Ended March 31,
                                                                                           1999                  1998

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income (Loss) from Continuing Operations                                       $   (1,524,207)         $   1,232,639
    Income (Loss) from Discontinued Operations                                              1,383,407              (47,989)
    Adjustments to Reconcile Net Income (Loss) to Net Cash Flows
        Used in Operating Activities:
           Depreciation and Amortization                                                         3,000               190,408
           Stock Warrants Issued to Consultants                                              1,497,738                     -
           Exercise of Warrants                                                                 13,179                     -
           Impairment Loss on Marketable Securities                                              3,400                     -
           Deferred Revenue                                                                          -                 7,007

           (Increase) Decrease in:
              Accounts Receivable                                                                9,664           (2,378,115)
              Third Party Settlement Receivable                                                      -                51,829
              Prepaid Expenses and Other                                                         4,377             (917,510)
              Inventory                                                                              -             (207,088)
              Due from Related Party                                                            (3,179)                     -
              Note Receivable                                                                        -              (62,216)
              Other Assets                                                                           -               (3,220)
              Net Assets of Discontinued Operations                                                  -                19,258

           Increase (Decrease) in:
              Cash Overdraft                                                                   (84,386)                     -
              Accounts Payable and Accrued Expenses                                           (383,227)               539,664
              Income Taxes Payable                                                                   -               623,654
              Net Liabilities of Discontined Operations                                       (549,226)                    -
                                                                                             ---------                    -

Net Cash Flows Provided by (Used in) Operating Activities                                      370,540              (951,679)
                                                                                              --------             ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of Property and Equipment                                                       (3,000)              (15,926)
    Business Acquired, Net of Cash                                                                   -               (29,725)
                                                                                              --------              --------
Net Cash Flows Used in Investing Activities                                                    (3,000)              (45,651)
                                                                                               -------              --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds From Issuance of Common Stock                                                           -               750,000
    (Payments on) Proceeds from Issuance of Notes Payable - Related Parties                   (84,842)               117,477
    (Payments on) Proceeds from Issuance of Notes Payable - Non-Related Parties              (287,131)              305,573
                                                                                             ---------              -------
Net Cash Flows Provided by (Used in) Financing Activities                                    (371,973)            1,173,050
                                                                                             ---------            ---------

Net Increase (Decrease) in Cash                                                               (4,433)               175,720
Cash - Beginning of Period                                                                     6,287                 5,022
                                                                                               ------                -----
Cash - End of Period                                                                      $     1,854          $    180,742
                                                                                          ============           ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
   Interest                                                                                $        -            $        -
                                                                                           ===========           ==========
   Income Taxes                                                                            $        -            $        -
                                                                                           ===========           ==========
</TABLE>
                                     Page 5

<PAGE>


                                  COLMENA CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited consolidated 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.   The  consolidated  financial
statements  include  the  accounts  of the  Company  and our  subsidiaries.  All
significant intercompany accounts and transactions have been eliminated.  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 consolidated  financial  statements should be read in conjunction with the
consolidated  financial  statements  for the year ended  September  30, 1998 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  six  months  ended  March  31,  1999  are  not  necessarily
indicative of the results for the full fiscal year ending September 30, 1999.


NOTE 2 - PRINCIPLES OF CONSOLIDATION AND COMBINATION

The consolidated  financial  statements  include the accounts of our Company and
our  subsidiaries  RCP,  BTSF,  Tio and TechTel.  All  significant  intercompany
balances and transactions been eliminated in consolidation.


NOTE 3 - 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  our  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.


                                     Page 6
<PAGE>


                                  COLMENA CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



NOTE 3 - CONSULTING AGREEMENT (Continued)

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


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  mainly  comprise  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 our Company from the exercise of options
that were given to the consultant as part of our  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 our Company.
In this role, the  consultant  agreed to establish and operate bank accounts for
our Company using such signatories as the consultant deems appropriate.

As  consideration  for the  first  200 hours of  services  provided  (in lieu of
document license fees and required cash payments valued at $20,000), our Company
agreed to issue within the first 365 days of the agreement, (the "Initial Term")
to the consultant  8,066,326 Class A options to purchase 8,066,326 shares of our
Company's  common  stock at an  exercise  price of $0.005 per  share,  under the
assumption that 7,750,000  common shares were outstanding or reserved for future
issuance,  and therefore resulting in the consultant owning 51% of our Company's
common stock.  Any increase or decrease in the  outstanding  or reserved  shares
would result in a corresponding  adjustment of the options' quantity and prices.
The options may be exercised from the 10th day until the 365th day following the
effective date of a registration  statement  registering  the underlying  common
stock  with  the   commission.   The  consulting   agreement  with  Yankees  was
renegotiated  during  January  of  2000  at our  Company's  request,  due to our
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. As of the date of this report,  the consultant
had exercised  options for 6,000,000 shares of common stock. Our Company applies
the fair market value method of Statement of Financial  Accounting Standards 123
in accounting for stock options issued to consultants.  Accordingly,  consulting
expense of  $1,476,138  was  recognized  during  January  1999 for the option to
acquire 8,066,326 shares of common stock.


                                     Page 7
<PAGE>


                                  COLMENA CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



NOTE 3 - CONSULTING AGREEMENT (Continued)

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


For additional services provided,  during the initial term, we agreed to pay the
following consideration:  (a) If the consultant arranges or provides funding for
our  Company on more  beneficial  terms than those  currently  reflected  in our
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  consultants 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% from the  comparable
subscription  price paid by any other  purchaser of  restricted  securities,  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
our Company by the consultant;  (b) If the consultant generates business for our
Company,  the  consultant  shall be entitled to a commission of 10% of the gross
income  derived by our  Company  there from on a  continuing  basis;  (c) If the
consultant  arranges for an acquisition by our Company,  the consultant shall be
entitled to 10% of the compensation paid for such acquisition.  In addition, our
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.

NOTE 4 - DISCONTINUED OPERATIONS

Reorganization  Agreement between our Company and Mr. Peplin, and Resignation of
Mr. Peplin.


On March 25, 1999, a Reorganization Agreement (the "Agreement") was entered into
and  consummated  by  and  among  our  Company  and  Mr.  Peplin  the  principal
stockholder  and  former  president  of our  Company.  Under  the  terms  of the
Agreement,  our Company  conveyed  to the order of Mr.  Peplin,  and Mr.  Peplin
accepted,  all of our Company's  right,  title and interest in and to all of the
capital  stock of T2U Co.  and BTSF  (the  "Subsidiaries"),  expecting  that Mr.
Peplin will 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.  Our
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. Furthermore, our Company agreed to spin out 20% of the capital stock of
TechTel  to our  Company's  stockholders  under the  parameters  established  by
Securities  Exchange  Commission  Division  of  Corporate  Finance  Staff  Legal
Bulletin  Number 5, 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.




                                     Page 8
<PAGE>

                                  COLMENA CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



NOTE 4 - DISCONTINUED OPERATIONS (Continued)

Reorganization  Agreement between our Company and Mr. Peplin, and Resignation of
Mr. Peplin.


Mr. Peplin irrevocably agreed that any net assets remaining after liquidation of
the Subsidiaries will be used to pay taxes and liabilities of TechTel guaranteed
by Mr. Peplin or our Company, with the net balance returned to our 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.  The 80% 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 transferors of liabilities of TechTel.  Before the transfer of
the 20% TechTel common stock as discussed  above,  in November 1999 the interest
of all  stockholders  in TechTel,  including our Company's,  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 our Company in exchange for TechTel
shares. Our Company approved such modification of the  Reorganization  Agreement
due to our inability to maintain  TechTel's  operations  pending the anticipated
spin out to our Company's stockholders.  During March 1999, pursuant to the sale
of the subsidiaries, our Company recognized a gain on sale.

The reorganizations  discussed above do not qualify as tax-free reorganizations.
However,  no taxes will be payable,  as the income generated by our Company as a
result of our  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
our Company and its remaining subsidiary.

NOTE 5 - COMMON STOCK TRANSACTIONS AND STOCK OPTIONS AND WARRANTS GRANTED

On January 29, 1999,  directors of our Company were issued  300,000 common stock
options  for  services at an exercise  price of $0.05 per share,  such  warrants
being  exercisable  on or before  January  15,  2000.  On January  3, 2000,  the
exercise  term was  extended  to January 12,  2001.  On January  11,  2001,  the
exercise  term was extended to January 15,  2002.  The fair value of the warrant
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 200%;  risk-free  interest  rate of 4.51%,  and an  expected  live of 1 year.
Accordingly,  consulting  expense of $21,600 was recognized  during January 1999
for the 300,000 options issued.



                                     Page 9
<PAGE>

                                  COLMENA CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 6 - SUBSEQUENT EVENTS

(A)  Common Stock Transactions and Stock Options and Warrants Granted

     On January 3, 2000,  a vendor who  provided  legal  services to our Company
     converted  total  amounts due  aggregating  $50,782 at December 31, 1998 to
     677,087 restricted shares of common stock of our Company.

     On January 3,  2000,  a vendor  converted  total  amounts  due of $2,550 at
     September 30, 1998 to 34,000 shares of common stock of our Company.

     On May 11, 2000,  our Company issued 136,147 shares of common stock in full
     payment of all obligations owned to a vendor.

     On May 31, 2000,  our Company  issued  533,333  shares of common stock to a
     third party as an  accommodation  to Mr.  Peplin.  Mr.  Peplin,  personally
     guaranteed  funds loaned by the third party to RCP. The third party brought
     suit against Mr. Peplin in the Circuit Court of Cook County,  Illinois,  to
     enforce  payment on the  guaranty.  The  Registrant  was not a party to the
     suit.  However, as an accommodation to Mr. Peplin, our Company has become a
     party to a settlement  agreement between the litigants in which our Company
     promises to transfer 533,333 shares of our stock to the third party without
     assuming any liability for Mr.  Peplin's  obligations  under the settlement
     agreement.

     On June 3, 1999, in  connection  with a settlement  agreement,  our Company
     issued to Mr. Sethi, a former employees,  250,000 shares of common stock at
     fair value.

     On November 8, 2000,  our Company  issued 100,000 shares of common stock in
     full satisfaction of all obligations owed to a third party.

     For all conversions of debt with unrelated parties, our Company will record
     a gain or loss on the  extinguishment  of debt based upon the quoted market
     price of the stock on the conversion dates.

     On January 3, 2000,  directors  and  officers  of our  Company  were issued
     264,000 common stock options for services at an exercise price of $0.02 per
     share, exercisable on or before December 31, 2002.  Additionally,  on March
     14, 2000, a director of our Company was issued  70,000 common stock options
     for services at an exercise  price of $.05 per share.  These options expire
     on January 15, 2002.

     On January 11, 2001,  directors of our Company were issued  400,000  common
     stock  options for services at an exercise  price of $.05 per share.  These
     options expire on January 11, 2002.


                                      Page 10
<PAGE>

                                  COLMENA CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



NOTE 3 - SUBSEQUENT EVENTS (Continued)

(A)  Common Stock Transactions and Stock Options and Warrants Granted

     On  May  30,  2001,  our  Company  settled  all   outstanding   issues  and
     commitments,  including, without limitation, satisfaction of a certain note
     payable  amounting  to $100,000  plus any  accrued  and unpaid  interest in
     consideration  for the issuance of 1,844,444 shares of our Company's common
     stock.

(B)  Non-Qualified Stock Option & Stock Incentive Plan

     Effective   January  1,  2000,  our  Company   adopted  the  "Colmena  Corp
     Non-Qualified  Stock Option & Stock  Incentive  Plan" (the 2000 Plan).  The
     purpose of the plan was to promote the success and enhance the value of our
     Company. Subject to adjustment,  as defined in the agreement, the aggregate
     number of shares of common  stock that may be  granted  under the 2000 Plan
     shall be 1,000,000 shares. As of April 15, 2001, no shares have been issued
     under the plan and the  stockholders  had not  approved  the plan.  Because
     stockholder  approval was required as to the  incentive  stock option plan,
     within one year of its adoption, the plan has been terminated.

(C)  Employment Agreement

     On May 4, 1999, our Company's  board of directors  elected Anthony Q. Joffe
     as our president.  Mr. Joffe's term as an officer is at the pleasure of our
     Company's board of directors,  subject to his  contractual  rights under an
     employment agreement. The terms of Mr. Joffe's compensation for services to
     our Company are set forth in his  employment  agreement  with our  Company,
     summarized below. The Joffe Agreement is for a term of one year, subject to
     automatic annual renewal  thereafter unless the Party deciding not to renew
     provides the other with written  notice of intention  not to renew prior to
     the 60th day  before  termination  of the then  effective  term or  renewal
     thereof.

Compensation:

     A. 200,000  shares of our  Company's  common  stock,  provided  that (1) He
     remains  in the  employ  of our  Company  for a period of not less than 365
     consecutive  days; (2) He has not been discharged by our Company for cause;
     (3)  He  fully  complies  with  the  provisions  of  the  Joffe  Agreement,
     including,  without  limitation,  the  confidentiality  and non-competition
     sections hereof. These shares were issued on October 31, 2000.


                                     Page 11
<PAGE>

                                  COLMENA CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3 - SUBSEQUENT EVENTS (Continued)

(C)  Employment Agreement (Continued)

     B. In the event that Mr. Joffe arranges or provides funding for our Company
     on terms more  beneficial  than those  reflected in our  Company's  current
     principal  financing  agreements,  copies of which are  included  among our
     Company's  records  available  through the SEC's EDGAR web site,  Mr. Joffe
     shall be entitled, at its election, to either:

     (1)  A fee equal to 5% of such savings, on a continuing basis; or

     (2)  If equity  funding is  provided  through Mr.  Joffe or any  affiliates
          thereof,  a discount of 5% from the bid price for the  subject  equity
          securities  if they are  issuable  as free  trading  securities,  or a
          discount  of 25% from the  comparable  subscription  price paid by any
          other  purchaser of restricted  securities,  if issuable as restricted
          securities, if they are issuable as restricted securities (as the term
          restricted is used for purposes of SEC Rule 144); and

     (3)  If equity  funding is arranged  for our  Company by Mr.  Joffe and our
          Company  is not  obligated  to pay any other  source  compensation  in
          conjunction  therewith,  other then the normal commissions  charged by
          broker  dealers in  securities  in  compliance  with the  compensation
          guidelines of the NASD,  the Mr. Joffe shall be entitled to a bonus in
          a sum equal to 5% of the net proceeds of such funding.

(E)  Potential Reorganization Under Bankruptcy Code

     In light of the volume of litigation,  potential  litigation and regulatory
     action,  our  Company  and  our  Board  of  Directors  have  discussed  the
     possibility  of  reorganization  under  Chapter  11 of  the  United  States
     Bankruptcy Code. As of the date of this report no such  reorganization  has
     been consummated.


                                     Page 12
<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
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 suggested that our Company first concentrate on meeting
our  obligations  to file periodic  reports  under the Exchange  Act,  including
completing  the audit of our  financial  statements  for the  fiscal  year ended
September 30, 1998,  which was completed in September  2000.  Concurrently  with
activities  pertaining  to the 1998  audit,  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, 1998 and is currently  completing the quarterly
unaudited  financial  statements  required  in  order to  complete  and file our
delinquent  reports on Commission  Form 10-QSB for the calendar  quarters  ended
June 30, 1999 and 2000,  and the audit for our fiscal year ended  September  30,
1999 and 2000.  Our Company  expects to have all such  financial  statements and
reports filed with the commission prior to July 1, 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
Corporation,  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 of  approximately  $165,956  While  management  feels that there is a
reasonable  likelihood that such offers will be accepted,  no assurances to that
effect can be provided.

     Our  Company  currently  has no  businesses  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
for the resale to end users from BellSouth Telecommunications, Inc.



                                     Page 13
<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  complimentary  businesses in exchange for shares of the Registrant's
common stock and a commitment by the  Registrant to provide  required  expansion
capital.  However,  no assurances can be provided that such business plan can be
attained.

     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 growth, our Company's success
in  implementing  its  business  strategy,  our  Company's  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.

     Six and three months ended March 31, 1999  compared to six and three months
ended March 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. We
reported net losses from  operations  for the six months ended March 31, 1999 of
($1,524,207)  and net income from  operations for the six months ended March 31,
1998 of $1,198,139. This translates to a per share (loss) of $(0.18) for the six
months  ended  March 31,  1999 and per share  income of $0.23 for the six months
ended March 31,  1998.  Additionally,  we reported a net gain from  discontinued
operations  for the six months  ended March 31, 1999 of  $1,383,407  or $.17 per
share as compared to a net loss from discontinued  operations for the six months
ended  March  31,  1998  of  $(47,989)  or  $(.01)  per  share.  The  gain  from
discontinued operation in 1999 was related to the sale of certain subsidiaries.


                                     Page 14
<PAGE>

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

     Six and three months ended March 31, 1999  compared to six and three months
ended March 31, 1998

     The net income (loss)  figures were based on  corresponding  revenues of $0
and $5,946,925  for the six months ended March 31, 1999 and 1998,  respectively.
The  decrease in net revenue  and  corresponding  decrease in cost of revenue in
1999  as  compared  to  1998  was   attributable  to  the   discontinuation   of
substantially  all of marketing  and  distributing  of  long-distance  telephone
service calling cards.  Operating expenses rose to $1,506,832 for the six months
ended March 31, 1999 as compared to $523,494  for the six months ended March 31,
1998.  The increase was due the increased  consulting  fees  resulting  from the
issuance of common stock warrants amounting to approximately $1,498,000.

     Net cash  used in  investing  activities  in the  1999  period  was  $3,000
compared to net cash used in investing activities of $45,651 in the 1998 period.
This  difference was related to the purchase of equipment and the acquisition of
our discontinued subsidiary, BTS in fiscal 1998.

     Net cash used in financing  activities in the 1999 period was $(371,973) as
compared to net cash provided by financing  activities of $1,173,050 in the 1998
period.  The difference was  attributable  to decreased  proceeds  received from
loans and decreased capital contributions.

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

     The  effect  of the  board  of  directors'  decision  to  discontinue  past
operations  has had the effect of allowing the  Registrant 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  Registrant's 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.  The  Registrant  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



                                     Page 15
<PAGE>

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

Liquidity and Capital Resources

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,  the  Registrant,   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  March  31,  1999,  our  Company  had  a  stockholders'   deficiency  of
approximately  $551,185. 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 its 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.

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 report of Form
10-QSB for the fiscal period ended December 31, 1998.

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, 1998.

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, 1998.



                                     Page 16
<PAGE>

PART II. OTHER INFORMATION (Continued)

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

A.   New Officers and Directors of Registrant and Subsidiary

     On May 14, 2001,  Anthony Q. Joffe resigned as the President of our company
and was  elected  Chairman  of the Board of  Directors.  Edward C.  Dmytryk  has
replaced Mr. Joffe as our company's  President and chief executive officer.  Mr.
Dmytryk was elected as a member of the board of directors. David K. Cantley also
resigned as an officer and  director of our  company.  The  resignation  did not
involve any disagreements with any corporate officers or directors,  but rather,
was based solely on personal reasons.

B.   Biographies of New Directors and Officers

     Edward Carl Dmytryk, Director, President and Chief Executive Officer

     Mr. Dmytryk, age 55, serves as a member of our company's board of directors
and as the president and chief executive  officer.  He graduated summa cum laude
from The  Citadel,  the  Military  College  of South  Carolina,  in 1968  with a
bachelors of science  degree in business  administration.  From 1968 until 1973,
Mr.  Dmytryk  served in the United States Air Force as a fighter and  instructor
pilot,  attaining the rank of captain  (regular  United States Air Force).  From
1973 until 1975, he served as a sales manager for Wulfsberg Electronics, Inc., a
national  avionics firm specializing in airborne radio and telephone systems and
headquartered  in Overland  Park,  Kansas.  From 1976 until 1981, he served as a
regional sales manager for Polaroid  Corporation a multi faceted imaging company
headquartered  in Cambridge,  Massachusetts.  From 1981 until 1985, he served as
vice  president  of sales for West  Chemical,  Inc.,  a company  involved in the
manufacture of animal health feed additives,  pharmaceutical products,  iodophor
concentrates and specialty  chemicals,  headquartered in Princeton,  New Jersey.
From 1985 until 1986,  he served as vice  president  for sales and  marketing at
Animed, Inc., a veterinary products  manufacturing company specializing in sales
to  veterinarians,  headquartered in Roslyn,  New York. From 1987 until 1988, he
served as president of Mac's Snacks, Inc., the world's largest processor of pork
rinds, headquartered in Grand Prairie, Texas. From 1988 until 1995, he served as
the chief operating officer for Bollinger  Industries,  Inc., a fitness products
manufacturer headquartered in Irvine, Texas. Since June of 1990, he has been the
owner and  chief  executive  officer  of  Benchmark  Industries,  Inc.,  a metal
fabrications  company  headquartered  in Fort Worth,  Texas.  Since September of
1999,  he has served as the  president of GNR Health  Systems,  Inc., a physical
therapy  products  sales  company  located in Ocala,  Florida.  In addition,  he
currently serves as president and chief financial officer of Sohn, Inc., located
in Roswell, Georgia, a company specializing in marketing,  sales, and installing
fitness  products in the  hospitality and apartment  market (fitness  centers in
hotels,  condominium complexes, and apartments through the United States.) Since
December  2000,  he has  served as  President  and chief  executive  officer  of
AmeriNet Group.com,  Inc., a publicly held Delaware  corporation and as a member
of its board of directors since 1999.



                                     Page 17
<PAGE>



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, 1998.

  (b)    Reports on Form 8-K

     Our Company filed a current  report on Form 8-K on January 29, 1999,  March
22, 1999, May 18, 1999 and an 8-KA on February 12, 1999.


                                  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:  June 5, 2001                  By:  /s/ Edward C. Dmytryk
                                               Edward C. Dmytryk, President
                                               Chief Executive Officer, Director


                                     Page 18