<PAGE>

FORM 8-K -- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

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

Date of Report (Date of earliest event reported): October 23, 2001

RECEPTAGEN LTD.
---------------
(Exact name of registrant as specified in its charter)

CANADA                           0-25124                     n/a
------                           -------                     ---
(State or other                 (Commission                  (IRS Employer
jurisdiction of                 File Number)                 Identification No.)
incorporation)


390 Bay Street, Suite 1600, Toronto, Ontario                M5H 2Y2
--------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (416) 368-2500
                                                    --------------

N/A
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)

                    INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 1  CHANGES IN CONTROL OF REGISTRANT.

THE DATE AND A DESCRIPTION OF THE TRANSACTION(S) WHICH RESULTED IN THE CHANGE
IN CONTROL

On October 23, 2001 the Corporation completed a reverse take-over transaction
(the "Transaction") with Spantel Communications Inc. ("SCI"). The Corporation
consolidated its issued and outstanding common shares on the basis of one (1)
new common share for every ten (10) old common shares, and then issued
16,500,000 post-consolidation common shares to the sole shareholder of SCI.

NAME OF PERSON ACQUIRING CONTROL

Mohamed Khashoggi
<PAGE>
Calle Ramon Areces S/N, Apto. 5-F
Marina Banus Blg. 3, Puerto Banus
29660, Malaga, Spain

AMOUNT AND THE SOURCE OF THE CONSIDERATION USED BY SUCH PERSON

Mr. Khashoggi acquired the 16,500,000 post-consolidation common shares of the
Corporation in exchange for all of the issued and outstanding common shares of
SCI.

BASIS OF THE CONTROL

Registered ownership of approximately 94.2% of the issued and outstanding
common shares of the Corporation.

THE PERCENTAGE OF VOTING SECURITIES OF THE REGISTRANT NOW BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY BY THE PERSON(S) WHO ACQUIRED CONTROL

As a result of the Transaction, Mr. Khashoggi is the registered owner of
approximately 94.2% of the Corporation's issued and outstanding
post-consolidation common shares.

IDENTITY OF THE PERSON(S) FROM WHOM CONTROL WAS ASSUMED

Control was assumed by the acquisition of common shares from treasury rather
than from existing shareholders. Prior to the Transaction, no one person or
group of persons acting in concert exercised control over the Corporation.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets out all persons who are currently the beneficial
owners of more than five percent of any class of the Corporation's voting
securities. The Corporation has only one class of voting securities, namely its
common shares.

<Table>
<Caption>
                   NAME AND ADDRESS OF         AMOUNT AND NATURE OF       PERCENTAGE
TITLE OF CLASS      BENEFICIAL OWNER           BENEFICIAL OWNERSHIP        OF CLASS
--------------     -------------------         --------------------       ----------
<S>                <C>                         <C>                        <C>
Common Shares      Mohamed Khashoggi           16,500,000 common          94.2%
                   Calle Ramon Areces S/N,     shares directly owned
                   Apto. 5-F, Marina Banus     and registered in Mr.
                     Blg. 3,                   Khashoggi's name
                   Puerto Banus, 29660
                   Malaga, Spain
</Table>

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets out the beneficial shareholdings of the Corporation's
directors and executive officers. As a group, the directors and executive
officers of the Corporation hold 16,500,000 common shares, being 94.2% of the
Corporation's issued and outstanding voting shares. Except for Mr. Khashoggi,
who is the President of the Corporation, none of the other
<PAGE>

directors and executive officers of the Corporation beneficially own any shares
of the Corporation.

<Table>
<Caption>
                             NAME AND ADDRESS OF         AMOUNT AND NATURE OF        PERCENTAGE
TITLE OF CLASS                 BENEFICIAL OWNER          BENEFICIAL OWNERSHIP         OF CLASS
--------------               -------------------         --------------------        ----------
<S>                        <C>                           <C>                            <C>
Common Shares              Mohamed Khashoggi             16,500,000 common              94.2%
                           President                     shares directly owned
                           Calle Ramon Areces S/N,       and registered in
                           Apto. 5-F, Marina Banus       Mr. Khashoggi's name
                           Blg. 3, Puerto Banus,
                           29660
                           Malaga, Spain
</Table>


CHANGE OF CONTROL ARRANGEMENTS

There are no arrangements which may result in a change of control of the
Corporation.

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

REVERSE TAKE-OVER OF SPANTEL COMMUNICATIONS INC.

On October 23, 2001 the Corporation acquired all (100%) of the issued and
outstanding common shares of Spantel Communications Inc. ("SCI") (the
"Transaction"). SCI is a British Virgin Islands company which is the parent
company of Spantel 2000 S.A., a Spanish company engaged in the business of
providing long-distance telephone service in Spain. Pursuant to the
Transaction, the Corporation:

(a)  issued 528,399 of the Corporation's post-consolidation common shares to
     creditors of the Corporation (the "Creditors") at $1.00 per share in full
     settlement of the debts owed to them (the "Debt Settlement"),

(b)  consolidated the Corporation's issued and outstanding common shares on the
     basis of one (1) new common share for every ten (10) old common shares, and

(c)  issue 16,500,000 post-consolidation common shares to the sole shareholder
     of SCI in exchange for 100% of the SCI common shares.

On July 12, 2001, the Corporation's shareholders approved the Transaction at a
shareholders' meeting (the "Meeting") duly held in accordance with applicable
law. Prior to the Meeting, all of the Corporation's shareholders received a
Management Information Circular which provided sufficient information for such
shareholders to make adequately informed decisions concerning the Transaction.

As a result of the Debt Settlement, the Corporation has eliminated $528,399 of
its outstanding debt.
<PAGE>
THE PRINCIPLE FOLLOWED IN DETERMINING THE AMOUNT OF CONSIDERATION

The amount of the consideration for the acquisition of all of the issued and
outstanding shares of SCI was determined by arm's length negotiations between
the management of the Corporation and the shareholder of SCI.

THE IDENTITY OF THE PERSON(S) FROM WHOM THE ASSETS WERE ACQUIRED OR TO WHOM
THEY WERE SOLD

The common shares of SCI were acquired from Mr. Mohamed Khashoggi (see Item 1
above).

MATERIAL RELATIONSHIP BETWEEN THE VENDOR AND THE CORPORATION OR ANY OF ITS
AFFILIATES, DIRECTORS OR OFFICERS OF THE REGISTRANT, OR ANY ASSOCIATES OF THE
SAME

None.

ITEM 3. BANKRUPTCY OR RECEIVERSHIP.

N/A

ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

On June 11, 2001, BDO Dunwoody LLP resigned as the auditors of the Corporation
and were replaced by Salberg & Company P.A.. The change of auditors occurred as
part of the Transaction, and was approved by the shareholders of the
Corporation at their annual meeting held on July 12, 2001.

BDO Dunwoody LLP did not audit or report on the Corporation's financial
statements for the last three fiscal years (the years ended December 31, 1998,
1999 and 2000). These financial statements were audited by Salberg & Company,
P.A., which was retained for this purpose.

The report of BDO Dunwoody LLP for the financial statements for the years ended
December 31, 1997, 1996 and 1995 (being the last financial statements audited
by BDO Dunwoody LLP) did not contain an adverse opinion or disclaimer of
opinion, and were not modified as to uncertainty, audit scope or accounting
principles.

There were no disagreements between the Corporation and BDO Dunwoody LLP.

Salberg & Company, P.A. was not consulted regarding the application of
accounting principles to the Transaction, nor was it consulted regarding any
disagreement between the Corporation and BDO Dunwoody LLP. Salberg & Company,
P.A. was selected because:

(a)  the Corporation saw an opportunity to reactivate itself through the
     Transaction;

(b)  to complete the Transaction, the Corporation had to have its financial
     statements for the
<PAGE>
     1998, 1999 and 2000 fiscal years audited; and

(c)  the Corporation determined that Salberg & Company, P.A. could provide the
     required auditing and accounting services for a lower price.

The decision to change auditors was made by the audit committee of the board of
directors of the Corporation and was approved by the full board of directors.

The Corporation provided to BDO Dunwoody LLP a notice of change of auditor
containing the disclosures made in this Item 4, and received from BDO Dunwoody
LLP a letter stating that BDO Dunwoody LLP was in agreement with the statements
made in that notice. A copy of the notice of change of auditor and of the
response from BDO Dunwoody LLP is attached to this Form 8-K as Exhibit "A".

ITEM 5. OTHER EVENTS.

SHARE CONSOLIDATIONS (REVERSE STOCK SPLITS)

On June 30, 1998, the shareholders of the Corporation approved the consolidation
(reverse stock split) of the Corporation's issued and outstanding shares on a
20:1 basis (i.e. one (1) new share for every twenty (20) old shares). This
consolidation was not put into effect until August 16, 2001. The consolidation
was put into effect at that time in anticipation of the proposed reverse
takeover transaction with SCI. As a result of the completion of the 20:1 share
consolidation, there were 6,652,365 common shares of Receptagen issued and
outstanding.

A further 10:1 share consolidation took place on October 16, 2001, after the
completion of the Debt Settlement and prior to the acquisition of SCI, as
approved at the shareholders' meeting held on July 12, 2001. As a result of the
Debt Settlement and the 10:1 share consolidation, the Corporation had 1,193,636
common shares issued and outstanding immediately prior to the issuance of a
further 16,500,000 common shares for the acquisition of SCI.

DOMESTICATION IN THE STATE OF FLORIDA

On October 18, 2001, the Corporation completed its domestication and
incorporation in the State of Florida, transferring the Corporation's charter
from Canadian federal jurisdiction.

NAME CHANGE

On October 30, 2001, the Corporation filed documents with the State of Florida
changing the Corporation's name from Receptagen Ltd. to "Spantel Communications
Inc.".

ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.

No director of the Corporation has resigned or declined to stand for
re-election because of a
<PAGE>
     disagreement with the Corporation or any matter relating to the
     registrant's operations, policies or practices.

The following persons were elected directors of the Corporation at its last
meeting of shareholders, held on July 12, 2001:

<Table>
<Caption>
NAME AND MUNICIPALITY OF              POSITION WITH THE          DATE FIRST ELECTED/
      RESIDENCE                          CORPORATION                  APPOINTED              PRINCIPAL OCCUPATION
------------------------              -----------------          -------------------         --------------------
<S>                                   <C>                            <C>                     <C>
Warren Wheeler                        Director                       1993                    President and CEO of Receptagen Ltd.
Madeira Beach, Florida, U.S.A.

Peter Prendergast                     Director                       July 12, 2001           Independent Business Executive
Toronto, Ontario, Canada

Linda Kent                            Director                       July 12, 2001           Investment Advisor
Aurora, Ontario, Canada                                                                      Credifinance Securities Limited

Georges Benarroch                     Director                       July 12, 2001           Chairman of Credifinance Capital
Paris, France                                                                                Corp. and President of InterUnion
                                                                                             Financial Corp. and InterUnion
                                                                                             Asset Management

Mohamed Khashoggi                     President and Director         July 12, 2001           President, Spantel
Malaga, Spain                                                                                Communications Inc. and Spantel
                                                                                             2000, S.A.
</Table>

Upon the completion of the reverse take-over with SCI, Warren Wheeler, Peter
Prendergast, Linda Kent and Georges Bennaroch resigned and were replaced by
nominees of SCI, such that the directors and officers of the Corporation are now
as follows:

<Table>
<Caption>
NAME AND MUNICIPALITY OF                POSITION WITH THE CORPORATION
       RESIDENCE                          FOLLOWING THE ACQUISITION                  PRINCIPAL OCCUPATION
------------------------                -----------------------------                --------------------
<S>                                     <C>                                          <C>
Juan Bautista Perez Aprico              Director                                     President, Group Radiotronica, S.A.
Madrid, Spain

Jose Ramon Basterra                     Director and Chief Executive Officer         C.E.O., Spantel Communications Inc. and
Malaga, Spain                                                                        Spantel 2000 S.A.

Mohamed A. Khashoggi                    President and Director                       President, Spantel Communication Inc.
Malaga, Spain                                                                        and Spantel 2000, S.A.
</Table>

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

The following is a list of the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this report.

(A)  FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

Audited financial statements of Spantel 2000, S.A. for the period from
incorporation up to March 31, 2001.

(B)  PRO FORMA FINANCIAL INFORMATION.

Pro forma unaudited consolidated balance sheet for the Corporation after the
completion of the acquisition of SCI and Spantel 2000, S.A.
<PAGE>





                               SPANTEL 2000, S.A.

                                     *****

                              Financial Statements
                          for the three months period
                              ended March 31, 2001








                                                            [ERNST & YOUNG LOGO]


<PAGE>

[ERNST & YOUNG -- LOGO]               Edificio Veleria        Tel.: 95 222 85 06
                                      Paseo de la Farola, 5   Fax:  95 222 66 16
                                      29016 Malaga




To the Shareholders of SPANTEL 2000, S.A.


We have compiled the accompanying balance sheet of Spantel 2000, S.A. as of
March 31, 2001, and the related statement of income, retained earnings, and
cash flows for the period then ended, and the accompanying notes to these
financial statements.

This compilation is limited to presenting in the form of financial statements
in accordance with US GAAP, information that is the representation of the
owners. We have not audited or reviewed the accompanying financial statements
and, accordingly, do not express an opinion or any other form of assurance on
them.

This compilation was based on the audited Spanish financial statements as of
March 31, 2001, on which we issued a qualified opinion of which a translation
is attached. The reconciliation of statutory equity to US GAAP equity can be
found in Note 4 of the accompanying financial statements.

This report is intended solely for the information and use of the shareholders
of the Company.

                                             ERNST & YOUNG


                                             /s/ Rafael Paez Martinez
                                             -----------------------------------
                                             Rafael Paez Martinez

April 24, 2001
<PAGE>


[ERNST & YOUNG -- LOGO]               Edificio Veleria        Tel.: 95 222 85 06
                                      Paseo de la Farola, 5   Fax:  95 222 66 16
                                      29016 Malaga


                      AUDIT REPORT ON THE ANNUAL ACCOUNTS
                   (TRANSLATED FROM THE ORIGINAL IN SPANISH)


To the Shareholders
of Spantel 2000, S.A.

1.   We have audited the accompanying financial statements of Spantel 2000,
S.A., which comprise the balance sheet as at March 31, 2001, the profit and
loss account and the explanatory notes for the three months period then ended,
the preparation of which is the responsibility of the Company's Board of
Directors. Our responsibility is to express an opinion on the financial
statements taken as a whole based on our work carried out in accordance with
auditing standards generally accepted in Spain, which require the examination,
through the performance of selective tests, of the evidence supporting the
annual accounts and the evaluation of their presentation, the accounting
principles applied and of the estimates made.

2.   In accordance with Spanish Mercantile Law, the Directors include, for
comparative purposes, for each of the captions presented in the balance sheet,
the profit and loss account and the statement of source and application of
funds, in addition to that figures of March 2001, those of December 2000. Our
opinion refers exclusively to the financial statements for the three months
period ended March 31, 2001. On March 5, 2001 we issued our audit opinion on
the year 2000 annual accounts on which we expressed a qualified opinion.

3.   As indicated in Note 2.b) of the accompanying explanatory notes, the
Company has incurred in losses during the year, as a result of which at March
31, 2001 it is in a situation considered cause for dissolution under article
260.1.4. of Spanish Corporate Law. In order to mitigate this issue, the Company
has started a reorganisation process of its activities in order to modify the
trend in negative results as well as approving a share capital increase of
2,000 million pesetas (12,020,000 euros). Given these circumstances, the
Company's ability to continue its operations so as realise its assets and
settle its liabilities at the amounts and in accordance with the
classifications which are reflected in the accompanying annual accounts will
depend on the successful outcome of the reorganisation activities undertaken
and the completion of the share capital increase.
<PAGE>


[ERNST & YOUNG -- LOGO]



4.   In our opinion, except for the effects of any adjustment that might have
been considered necessary if the final outcome of the uncertainty described in
the qualification contained in paragraph 3 were known, the accompanying
financial statements give a true and fair view, in all material respects, of
the net deficit and financial position of Spantel 2000, S.A. at March 31, 2001
and of the results of its operations for the three months period then ended,
and contain the information necessary and sufficient for their adequate
interpretation and understanding, in conformity with generally accepted
accounting principles and criteria in Spain applied on a basis consistent with
those of the preceding year.

                                             ERNST & YOUNG

                                             ORIGINAL SIGNATURE IN SPANISH



                                             ----------------------------------
                                             Rafael Paez Martinez

April 24, 2001
<PAGE>
<Table>
<Caption>
BALANCE SHEETS                                       THREE MONTHS               YEAR ENDED
                                                     PERIOD ENDED              DECEMBER 31,
                                                    MARCH 31, 2001                 2000
                                                    --------------            -------------
<S>                                                 <C>                       <C>
Spantel 2000, S.A.
(Euros)

ASSETS

Current assets

Cash and cash equivalents                              355,873.94                727,373.71

Related parties receivable, net of allowances
  of 2,772,296.97 (March 31, 2001);
  1,788,360.16 (December 31, 2000)                     939,001.86                596,762.59
Accounts receivable, net of allowances
  of 524,162.18 (March 31, 2001);
  430,199.52 (December 31, 2000)                     1,540,711.08                686,001.21
Other receivables, net of allowances
  of 1,847,306.56 (March 31, 2001);
  1,345,873.83 (December 31, 2000)                     124,446.88                165,996.27
Inventories                                              5,734.41                  3,484.37
Public entities                                        740,248.49                485,802.63
                                                    -------------             -------------
Total current assets                                 3,706,016.66              2,665,420.78

Other Assets

Investments, net of allowances of
  336,566.78 (December 31, 2000)                        91,437.98               (243,205.56)

Property and Equipment                                 635,882.02                580,440.64
                                                    -------------             -------------
                                                     4,433,336.66              3,002,655.86
                                                    =============             =============

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities
Amounts due to related parties                       9,926,868.06              7,167,628.35
Accounts payable                                     1,588,760.11              1,090,857.81
Public entities                                         55,579.80                 18,344.18
                                                    -------------             -------------
Total current liabilities                           11,571,207.97              8,276,830.34

Shareholders' Deficit
Common Stock
  Issued shares: 20,000 (2000) and
     500 (1999)
  Par value: 6.01                                      123,207.48                123,207.48
Prior year losses                                   (5,397,381.96)               (79,158.66)
Loss for the year                                   (1,863,696.83)            (5,318,223.30)
                                                    -------------             -------------
                                                    (7,137,871.31)            (5,274,174.48)
                                                    -------------             -------------
                                                    (4,433,336.66)             3,002,655.86
                                                    =============             =============
</Table>
<PAGE>



<TABLE>
<CAPTION>
STATEMENT OF INCOME                                THREE MONTHS      YEAR ENDED
Spantel 2000, S.A.                                 PERIOD ENDED     DECEMBER 31,
(Euros)                                           MARCH 31, 2001        2000
                                                  --------------    ------------
<S>                                                <C>              <C>
Net sales                                          1,545,135.89     2,178,663.66

Cost of sales                                      1,223,424.22     1,923,437.07
Marketing and selling                              1,987,229.61     4,701,563.12
General and administrative                            43,723.79       128,788.64
Depreciation and amortization                         29,856.31        69,806.59
(Gains)/Losses on investments                       (330,556.67)      336,566.78
Other income-net                                     455,155.47       336,724.76
                                                   ------------     ------------
Losses from continuing operations before
   income taxes and extraordinary item             1,863,696.83     5,318,223.30

INCOME TAXES                                                 --               --
                                                   ------------     ------------
Losses from continuing operations before
   extraordinary item                              1,863,696.83     5,318,223.30

Extraordinary item, net of tax                               --               --
                                                   ------------     ------------
Net losses                                         1,863,696.83     5,318,223.30
                                                   ============     ============
</TABLE>
<PAGE>

STATEMENTS OF CASH FLOWS
<Table>
<Caption>
                                                 THREE MONTHS     YEAR ENDED
                                                 PERIOD ENDED     DECEMBER 31,
                                                MARCH 31, 2001       2000
                                                --------------    ------------
<S>                                             <C>               <C>
Spantel 2000, S.A.
(Euros)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                               (1,863,696.83)    (5,318,223.30)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
  TO CASH FLOWS FROM OPERATING ACTIVITIES

Depreciation and amortization                       29,856.31         66,323.58
(Gain)/Loss on Spansurf Investment                (333,561.73)       336,566.78
                                                -------------     -------------
                                                (2,167,402.25)    (4,915,332.94)
Changes in operating assets and liabilities:
Receivables -- (increase)                       (1,409,845.62)    (1,918,146.24)
Accounts payable & other liabilities --
  (increase)                                       556,173.36        955,523.57
Inventories -- (increase) decrease                  (2,250.04)        28,166.56
                                                -------------     -------------
                                                  (855,922.30)      (934,456.11)
                                                -------------     -------------
NET CASH USED FOR OPERATING ACTIVITIES          (3,023,324.55)    (5,849,789.05)

CASH FLOWS FROM INVESTING ACTIVITIES

Share capital increase                                 --            120,202.42
Additions to property and equipment                (85,297.69)      (645,236.52)
Additions to investments                            (1,081.82)       (90,957.17)
                                                -------------     -------------
NET CASH USED FOR INVESTING ACTIVITIES             (86,379.51)      (615,991.27)

CASH FLOWS FROM FINANCING ACTIVITIES

Funds obtained from related parties              2,738,204.28      7,188,663.78
                                                -------------     -------------
NET CASH FROM FINANCING ACTIVITIES               2,738,204.28      7,188,663.78

Net increase (decrease) in cash and
  cash equivalents                                (371,499.77)       722,883.46
Cash and cash equivalents at
  beginning of year                                727,373.71          4,490.25
                                                -------------     -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR           335,873.94        727,373.71
                                                =============     =============
</Table>



<PAGE>
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------
SPANTEL 2000, S.A.

Notes to the Financial Statements

March 31, 2001


1.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Spantel 2000, S.A. was formed on April 28, 1999. Its current registered address
is Avda. Jose Banus S/N. Urb. Jardines del Puerto, local 21 Puerto Banus,
Marbella, Spain.

The corporate purpose involves marketing, network development and service
delivery in the telecommunications industry.

To perform this purpose, all telephone services are purchased from Lince
Telecomunicaciones, S.A. and RSL Communications Spain, S.A. based on the
corresponding supply contracts signed by the parties. These contracts are
renewed annually.

The Company's Directors consider that the contracts subscribed with these
telephone operators will be tacitly renewed on related expiration dates given
that all terms of the contracts have been met and that, if they were not to
renew their contracts, the Company would be able to continue rendering its
services to its customers via alternative operators in the communications
industry.

GOING CONCERN

The Company's financial statements prepared for the three months period ended
March 31, 2001 reflect a Shareholders' deficit amounting to approximately 7.14
million euros, as well as negative working capital amounting to approximately
7.87 million euros, due to which the Company is in a position which requires
dissolution under Spanish Corporation Law unless remedial action is taken.

To mitigate this situation, the Company agreed in a General Shareholders'
Meeting in December 2000, to carry out a capital increase amounting to
approximately 12.02 million euros. Part of this capital increase is to be
carried out by compensating a loan amounting to approximately 7.16 million
euros, which the Company has with its major shareholder.

The Directors also have a business plan to help the Company turn around losses
in the near future.



                                       4
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
<PAGE>
SPANTEL 2000, S.A.
AVDA. JOSE BANUS, S/N
JARDINES DEL MAR, 21
29660 MARBELLA (MALAGA)
C.I.F.: B-82344748
-------------------------------------------------------------------------------

Given the above, the Directors have formulated these financial statements under
the going concern concept, which implies the realization of assets and the
settlement of liabilities for the amounts and according to the classifications
shown in the accompanying financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates, and such differences may
be material to the financial statements.

CASH AND CASH EQUIVALENTS

All highly liquid investments with maturities of three months or less when
purchased, are classified as cash equivalents.

PROPERTY AND EQUIPMENT

Property and Equipment are valued at acquisition cost, less accumulated
depreciation.

Annual depreciation rates are calculated using the straight-line method over
the estimated useful life of the asset. Depreciation rates are as follows:

<Table>
<Caption>
                              Depreciation rate
                              -----------------
<S>                           <C>
Construction                         20%
Installations                        12%
Tools                                30%
Furniture                            10%
Computer equipment                   25%
Other                              10%-25%
</Table>

Repairs which do not prolong the useful life of the assets, as well as expenses
for maintenance are charged directly to the profit and loss account. Those
costs which prolong or improve the life of the asset are capitalized.

INVESTMENTS

If the book value of equity investments in other companies is lower than
acquisition cost, the corresponding provision is recorded.



                                       5
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
<PAGE>


SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
________________________________________________________________________________




INVENTORIES

Inventories are valued at the lower of acquisition cost or net realisable value.

TRADE DEBTORS AND CREDITORS

Short- and long-term trade debtors and creditors, as well as other accounts
receivable and payable, are recorded at the related nominal value. Interest
included in the value of transactions is charged to the profit and loss account
as it accrues in keeping with financial criteria.

BAD DEBT PROVISION

The Company values accounts receivable taking into account specific cases in
which there is reasonable evidence to indicate bad debts or litigation in
progress, and records the necessary bad debt provisions to cover related risks.

As at December 31, 2000, the Company recorded provisions to cover customer
receivables balances amounting to 430,199.52 euros. During the three months
period ended March 31, 2001, this provision has been increased by an additional
amount of 93,962.66 euros, amounting to 524,162.18 euros.

According to the terms of prevailing contracts to date, the Company has
established commercial relations -- in some case exclusive relations -- with a
series of telemarketing agencies which provide the Company with marketing and
customer targeting services. Between 5% and 8% commission is paid for these
services based on the traffic generated by customers gained by the various
marketing agencies and payments on account of commissions between 18.03 to
24.04 euros are made for each new customer.

In the year 2000, the Company recorded a provision based on commissions paid in
advance amounting to approximately 2.99 million euros. This provision
corresponds to customers which did not consumed services during that year for
which the Company had made payments on account to telemarketing agencies.

Based on the traffic carried for the period January 1 to March 31, 2001, the
Company has increased this provision by 1.10 million euros amounting to 4.09
million euros as at March 31, 2001.


                                       6


_______________________________________________________________________________
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
<PAGE>


SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
________________________________________________________________________________




Commissions are accrued based on customer consumption and not on the number of
customers obtained by the agencies. Given this circumstance, advances paid may
be recovered. However, the Directors consider that, the corresponding provision
should be recorded. Related accrued commissions will be offset against future
consumption corresponding to current or new customers which these telemarketing
agencies obtain for the Company.

Of the agencies mentioned above, Coast Telemarketing, S.L. and ABC
Telemarketing, S.L. are considered to be associated companies given the degree
of control exercised by various members of the Company's Board of Directors.
Approximately 0.62 million euros of the abovementioned provision correspond to
Coast Telemarketing, S.L. and approximately 1.77 million euros to ABC
Telemarketing, S.L.

INCOME TAXES

Corporate Income Tax is computed by calculating the differences between
accounting results and tax results (taxable base), distinguishing between
"permanent differences" or "temporary differences", in order to determine the
corporation tax payable for the year.

REVENUE RECOGNITION

Income and expenses are recorded on accrual basis, that is, at the moment the
goods or services are provided.

ADVERTISING EXPENSES

Advertising and marketing expenses are recorded in the statement of income when
the goods or services are provided.

Related expenses incurred for the three months period ended March 31, 2001
amounted to approximately 0.13 million euros.


                                       7


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<PAGE>
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

2. PROPERTY AND EQUIPMENT

<Table>
<Caption>
                                                                                           Euros
                                                                  ------------------------------------------------------
                                                                   Balance at                                 Balance at
                                                                  December 31,                                 March 31,
                                                                     2000                Additions               2001
                                                                  ------------           ---------            ----------
<S>                                                               <C>                    <C>                  <C>

COST
Construction                                                       11,460.65                 --                11,460.65
Technical installations and machinery                              98,789.24             42,797.15            141,586.39
Other installations, tools and furniture                           50,840.78              2,418.78             53,259.56
Data processing equipment                                         344,578.80             15,584.51            360,163.31
Software                                                           60,347.60             24,437.75             84,785.35
Other assets                                                       80,820.62                 59.50             80,880.12
                                                                  ----------            ----------            ----------
                                                                  646,837.69             85,297.69            732,135.38
ACCUMULATED DEPRECIATION
Land and construction                                              (1,789.75)              (565.18)            (2,354.93)
Technical installations and machinery                              (3,345.65)            (3,640.94)            (6,986.59)
Other installations, tools and furniture                           (2,678.78)            (1,354.47)            (4,033.25)
Data processing equipment                                         (52,950.56)           (21,706.66)           (74,657.22)
Software                                                             (316.42)              (429.07)              (745.49)
Other assets                                                       (5,315.89)            (2,159.99)            (7,475.88)
                                                                  ----------            ----------            ----------
                                                                  (66,397.05)           (29,856.31)           (96,253.36)
                                                                  ----------            ----------            ----------
Net value                                                         580,440.64             55,441.38            635,882.02
                                                                  ==========            ==========            ==========
</Table>


3. INVESTMENTS

The detail and movement of Investments for the three months period ended
March 31, 2001 was the following:

<Table>
<Caption>
                                                                                      Euros
                                                             -----------------------------------------------------------
                                                              Balance at                                      Balance at
                                                             December 31,                                      March 31,
                                                                2000           Additions      Disposals          2001
                                                             ------------      ---------      ---------       ----------
<S>                                                          <C>               <C>            <C>             <C>

Investments in Group companies                                  3,005.06       3,005.06        (6,010.12)         --
Provisions for investments in Group companies                (336,566.79)         --          336,566.79          --
Long-term deposits                                             90,356.17       1,081.81            --         91,437.98
                                                             -----------       --------       ----------      ---------
                                                             (243,205.56)      4,086.88       330,556.67      91,437.98
                                                             ===========       ========       ==========      =========
</Table>


                                       8
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<PAGE>
SPANTEL 2000, S.A.
AVDA. JOSE BANUS, S/N
JARDINES DEL MAR, 21
29660 MARBELLA (MALAGA)
C.I.F.: B-82344748
-------------------------------------------------------------------------------

Disposals of "Investments in Group companies" correspond to the sale of 500
participations of Spansurf, S.L. and an additional 500 participations of
Spantel Tecnica, S.L. with a nominal value of 6.01 euros each. Both investments
have been sold for a total amount of 0,006 euros each.

In year 2000, the Company recorded a provision for its investment in Spansurf,
S.L. to cover its net deficit for a total amount of 336,566.79 euros. This
provision has been reversed as a consequence of the sale of the Spansurf, S.L.
participations mentioned above.

The detail of Long-term deposits at March 31, 2001 is the following:

<Table>
<Caption>
                                            Euros
                                        --------------
<S>                                     <C>
Office security deposit                    3,485.87
Lince Telecomunicaciones, S.A.            30,050.60
RSL Communications Spain, S.A.            48,080.97
Postal and telegraph agency                7,007.80
Other                                      2,812.74
                                          ---------
                                          91,437.98
                                          =========
</Table>

4.   SHAREHOLDER'S DEFICIT

The detail and movements of the various accounts included under Shareholder's
Deficit during the three months period ended March 31, 2001 were the following:

<Table>
<Caption>
                                                                                 Euros
                                        ---------------------------------------------------------------------------------------
                                           Balance at               Appropriation of             Profit            Balance at
                                        December 31, 2000             2000 results               (loss)          March 31, 2000
                                        -----------------           ---------------          --------------      --------------
<S>                                     <C>                         <C>                      <C>                 <C>
Share capital                                123,207.48                   --                       --                123,207.48
Prior year losses                            (79,158.66)            (5,318,223.30)                 --             (5,397,381.96)
Loss for the year                         (5,318,223.30)             5,318,223.30            (1,863,696.83)       (1,863,696.83)
                                        ---------------             -------------            -------------        -------------
                                          (5,274,174.48)                  --                 (1,863,696.83)       (7,137,871.31)
                                        ===============             =============            =============        =============
</Table>

Share capital is represented by 20,500 shares with a nominal value of 6.01
euros each, all of which have been paid in. All units bear the same rights, are
cumulative and indivisible.

Spantel Communications Inc. which fully subscribed the share capital increased
in December 2000, is the major shareholder of the Company owning 97.56% of the
total number of shares.

                                       9
--------------------------------------------------------------------------------
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Hoja M-234.850


<PAGE>
SPANTEL 2000, S.A.
AVDA, JOSE BANUS, S/N
JARDINES DEL MAR, 21
29660 MARBELLA (MALAGA)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

The Shareholders' deficit reconciliation between Spanish GAAP and US GAAP is as
follows:

<Table>
<Caption>
                                                                      Euros
                                                                  --------------
<S>                                                               <C>
Share capital as at December 31, 2000                                123,207.48
Net loss for the year 2000 under Spanish GAAP                     (5,332,025.33)
Prior year losses                                                    (13,592.70)
Start up expenses adjustments*                                       (51,763.93)
                                                                  -------------
Shareholders' Deficit as at December 31, 2000 under US GAAP       (5,274,174.48)
Net loss for the three months ended March 31, 2001                (1,867,159.14)
Start up expenses amortization for the year*                           3,462.31
                                                                  -------------
Shareholders' deficit as at March 31, 2001 under US GAAP          (7,137,871.31)
                                                                  =============
</Table>

*  Start up expenses are treated as intangible asset under Spanish GAAP and are
   amortized within 5 years. Under US GAAP, those expenses are charged to the
   Profit and loss account when incurred.


5. RELATED PARTIES

The detail of related parties balances as at March 31, 2000 is the following:


<Table>
<Caption>

                                                                  Euros
                                                    -------------------------------
                                                        Debtor           Creditor
                                                    -------------      ------------
<S>                                                 <C>                <C>
Easy Rent a Car, S.A.                                344,881.12             --
Spansurf, S.L.                                       384,273.95             --
Coast Telemarketing, S.L.                            752,765.75             --
ABC Telemarketing, S.L.                            2,124,460.12             --
Spantel Communications Inc.                             --             7,167,628.35
Spantel Tecnica, S.L.                                 12,021.18             --
Spanpower, S.L.                                        2,851.71             --
AD Rent a car, S.A.                                   90,045.00             --
                                                  -------------        ------------
Balances with Group and associated companies       3,711,298.83        7,167,628.35
Related parties allowances                        (2,772,296.97)            --
Balances with Member of the Board                       --             2,759,239.71
                                                  -------------        ------------
                                                     939,001.86        9,926,868.06
                                                  =============        ============
</Table>


                                       10


--------------------------------------------------------------------------------
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Hoja M-234.850
<PAGE>
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

The Company transferred funds to Easy Rent a Car, S.A. and Spansurf, S.L. in
order to finance their operations during the year.

All the companies included in this note, except for Spantel Communications
Inc., which is the Company's major shareholder, are considered related party
given the degree of control exercised by one of the Company's board members.

Funds paid in advance to Coast Telemarketing, S.L. and ABC Telemarketing, S.L.
(the Agencies) correspond to commissions paid on account of consumption by
customers obtained for the Company in keeping with the terms of prevailing
contracts.

As explained in Note 1, the Company has decided to record bad debt provisions
based on actual consumption accrued during the year by the customers
contributed by each of the Agencies and the real possibilities of the Company
recovering the funds paid in advance.

The detail of debit balances net of provisions at March 31, 2001 corresponding
to balances with the Agencies, which are considered related parties, is as
follows:

<Table>
<Caption>
                                                      Euros
                                -----------------------------------------------
                                Debit Balances     Provisions       Net Balance
                                --------------     ----------       -----------
<S>                             <C>                <C>              <C>

Coast Telemarketing, S.L.         752,765.75         (619,579.32)   133,186.43
ABC Telemarketing, S.L.         2,124,460.12       (1,768,443.70)   356,016.42
                                ------------       -------------    ----------
                                2,877,225.87       (2,388,023.02)   489,202.85
                                ============       =============    ==========
</Table>

Commissions accrued by Coast Telemarketing, S.L. and ABC Telemarketing, S.L.
amounting to zero euros and 18,577.28 euros, respectively, were deducted from
total debtor balances.

In year 2000, the Company received approximately 7.21 million euros in funds
from its major shareholder in order to finance its operations.

During the three months period ended March 31, 2001 the Company has received
funds from one of the Members of the Board for approximately 2.76 million euros
in order to finance its operations.

On December, 2000 in a General Shareholder's Meeting it was agreed to make a
capital increase for a total amount of approximately 12.02 million euros. Part
of this capital increase will be carried out by compensating loans outstanding
with its major shareholder. This capital increase is expected to be realised in
2001.




                                       11
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
<PAGE>


SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
________________________________________________________________________________




6.   UNCERTAINTIES AND RISKS

As mentioned in Notes 1 and 5, the Company has recorded bad debt provisions
amounting to 4,092,476.55 euros for commissions paid on account in relation to
customers contributed by Coast Telemarketing, S.L. and ABC Telemarketing, S.L.
(related parties), as well as Conexworld and B&N Multiplanet (third parties).

However, based on a new system which directly assigns customer consumption
without customers dialing prefixes and the new system applied for adding new
customers based on signed contracts, the Company expects significant increases
in consumption of current and new customers obtained through the abovementioned
agencies. Under these circumstances, management believes that nearly all of the
aforementioned provisions would be released as this consumption generates
commissions since the consumption corresponding to commissions paid on account
may be traced to the group of customers contributed by each agency, but not to
individual customers. Consequently, any commission accrued by a customer
associated to a specific agency would be discounted from payments on account
previously given without taking into account the customer who actually
generated related consumption.

Given the above, the Company is confident that the provisions recorded for this
concept will be reversed in a reasonable amount of time.


7.   PUBLIC ENTITIES

The detail of payables to and receivables from public bodies is the following:

<TABLE>
<CAPTION>
                                                                 Euros
                                                       ------------------------
                                                          Debit         Credit
                                                       ----------     ---------
<S>                                                    <C>            <C>
Personal income tax withholdings                               --     16,721.47
Social Security                                            796.49     23,311.99
VAT                                                    739,452.00     15,546.34
                                                       ----------     ---------
                                                       740,248.49     55,579.80
                                                       ==========     =========
</TABLE>


                                       12

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Hoja M-234.850
<PAGE>
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

The reconciliation of pre-tax results to taxable income was the following:

<Table>
<Caption>
                                                                      Euros
                                                                   ------------
<S>                                                                <C>
Pre-tax book loss                                                 (1,863,696.83)
Permanent differences                                              1,579,332.22
                                                                   ------------
Taxable loss for tax purposes                                       (284,364.61)
                                                                   ============
</Table>

At March 31, 2000, the Company has cumulative net operating loss carryforwards
of approximately 1.77 million euros for income tax purposes, which begin to
expire in 2003.



8.   INCOME AND EXPENSES

The transactions carried out with related companies during the three months
period ended March 31, 2001 were the following:

<Table>
<Caption>

                                                                       Euros
                                                                   ------------
<S>                                                                <C>
Commissions accrued                                                   89,429.22
Payments on account                                                1,519,657.00
                                                                   ------------
                                                                   1,609,086.22
                                                                   ============
</Table>

In 2001 the average number of employees was the following:

<Table>
<Caption>
                                                                      Number
                                                                     --------
<S>                                                                   <C>
General Manager                                                         1
General and Administrative personnel                                    7
Marketing and selling personnel                                        25
                                                                      ---
                                                                       33
                                                                      ===
</Table>






                                       13
--------------------------------------------------------------------------------
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Hoja M-234.850
<PAGE>
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
-------------------------------------------------------------------------------

9. GOING CONCERN

As indicated in Note 1, the Company has a shareholders' deficit and is in a
situation considered cause for dissolution, under Spanish corporate law.

To restore equity, it was agreed at the Company's General Shareholders' Meeting
held in December 2000, to carry out a capital increase of approximately 12.02
million euros. Part of this capital increase will be performed by the
compensation of a loan with its major shareholder. This capital increase is
expected to take place in 2001.

In addition, the Company is confident that customer consumption will increase
significantly in 2001 and in subsequent years due to the implementation of
direct access networks contracted by the Company as well as the improvement
expected from the new system for adding new customers based on signed contracts.

April 20, 2001


/s/ Mohamed A. Khashoggi                        /s/ Frank Louis Palumbo
------------------------------------            -------------------------------
Mohamed A. Khashoggi                            Frank Louis Palumbo

/s/ Jose Ramon Basterra Lopez-Tapia
------------------------------------
Jose Ramon Basterra Lopez-Tapia




                                       14

-------------------------------------------------------------------------------
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Hoja M-234.850
<PAGE>



                          SPANTEL COMMUNICATIONS INC.
                                 & SUBSIDIARIES

                PRO-FORMA FINANCIAL STATEMENTS NINE MONTHS ENDED

                               SEPTEMBER 30,2001

                      (UNAUDITED - PREPARED BY MANAGEMENT)
<PAGE>


                          SPANTEL COMMUNICATIONS INC.
                                 & SUBSIDIARIES


                                    CONTENTS


                                                                         Page(s)
                                                                         -------

Consolidated Pro-Forma Statements of Balance Sheets                         1

Consolidated Pro-Forma Statements of Operations                             2

Consolidated Pro-Forma Statements of Cash Flow                              3
<PAGE>

                   SPANTEL COMMUNICATIONS INC. & SUBSIDIARIES
                     PRO-FORMA STATEMENTS OF BALANCE SHEET
                          (EXPRESSED IN U.S. DOLLARS)
                                  (UNAUDITED)
                  NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2001



<Table>
<Caption>
                                                                NINE MONTHS
                                                                PERIOD ENDED
                                                               SEPTEMBER, 2001
                                                               ---------------
<S>                                                            <C>
ASSETS
     CURRENT ASSETS
          Cash and equivalents                                      747,893.00
          Related Parties receivables                             1,798,823.00
          Accounts receivables                                    1,822,322.00
          Other receivables                                         242,299.00
          Inventories                                                38,620.00
          Public entities                                           451,393.00
                                                                --------------
          TOTAL CURRENT ASSETS                                    5,101,350.00
                                                                --------------
     OTHER ASSETS
          Investments (Spaniel 2000 S.A.)                            91,362.00
          Property and Equipment                                    685,025.00
                                                                --------------
          TOTAL OTHER ASSETS                                        776,387.00
                                                                --------------
     TOTAL ASSETS                                                $5,877,737.00
                                                                ==============


LIABILITIES
     OTHER LIABILITIES
          Amounts to be related parties                          11,521,632.00
          Accounts payables                                       2,388,261.00
          Accounts payables subject to conversion offers            466,150.00
          Public entities                                            50,477.00
                                                                --------------
          TOTAL OTHER LIABILITIES                                14,426,520.00
                                                                --------------
     PROVISION FOR LIABILITIES AND CHARGES                                0.00
                                                                --------------
     EQUITY
          Common Stock                                           13,722,731.00
          Currency translation Adjustments                          113,348.00
          Prior year losses                                     (20,174,726.00)
          Loss for the year                                      (2,210,136.00)
                                                                --------------
          TOTAL EQUITY                                           (8,548,783.00)
                                                                --------------
     TOTAL LIABILITIES                                            5,877,737.00
                                                                ==============
</Table>

               See accompanying notes to the financial statements

                                       1


<PAGE>
                   SPANTEL COMMUNICATIONS INC & SUBSIDIARIES
                       PRO-FORMA STATEMENTS OF OPERATIONS
                          (EXPRESSED IN U.S. DOLLARS)
                                  (UNAUDITED)
                  NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2001

<Table>
<Caption>
                                                                NINE MONTHS
                                                                PERIOD ENDED
                                                               SEPTEMBER, 2001
                                                               ---------------
<S>                                                            <C>
INCOMES
     Net sales                                                  5,281,926.00

EXPENSES
     Cost of Sales                                              3,902,240.00
     Marketing and Selling Expenses                             2,222,686.00
     General and Administrative Expenses                          443,522.00
     Depreciation and Amortization                                177,006.00
     (Gains)/Losses on Investments                               (307,892.00)
     Other expenses/(Income)                                    1,054,500.00
                                                               -------------
Losses from continuing operations before
  Income taxes and Extraordinary items                         (2,210,136.00)
                                                               -------------
Income Taxes                                                            0.00
                                                               -------------
Losses from continuing operations before
  Extraordinary items                                          (2,210,136.00)
                                                               -------------
Extraordinary items, net of tax                                         0.00
                                                               -------------
Net Losses                                                     (2,210,136.00)
                                                               =============
</Table>



               See accompanying notes to the financial statements



                                       2

<PAGE>
                   SPANTEL COMMUNICATIONS INC. & SUBSIDIARIES
                       PRO-FORMA STATEMENTS OF CASH FLOW
                          (EXPRESSED IN U.S. DOLLARS)
                                  (UNAUDITED)
                  NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2001

<Table>
<Caption>
                                                        NINE MONTHS
                                                       PERIOD ENDED
                                                      SEPTEMBER, 2001
                                                      ---------------
<S>                                                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES

     Net Income (Losses)                               (2,210,136.00)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSSES)
TO CASH FLOWS FROM OPERATING ACTIVITIES

     Depreciation and Amortization                        177,006.00
     (Gain)/Losses on Investments                        (316,277.00)
                                                      --------------
                                                         (139,271.00)
                                                      --------------
CHANGES IN OPERATING ASSETS AND LIABILITIES

     Accounts Receivables & Other Assets                  721,276.00
     Accounts Payables & Other Payables                 5,235,322.00
     Inventories                                          (35,378.00)
                                                      --------------
                                                        5,921,220.00
                                                      --------------

NET CASH USED FOR OPERATING ACTIVITIES                  3,571,813.00
                                                      ==============

CASH FLOWS FROM INVESTING ACTIVITIES

     Additions to property and Equipment                 (333,460.00)
     Other Adjustments                                     23,003.00
     Additions to Investments                              (3,314.00)
                                                      --------------
NET CASH USED FOR INVESTING ACTIVITIES                   (313,771.00)
                                                      ==============

CASH FLOWS FROM FINANCING ACTIVITIES

     Funds obtained from related parties               (3,186,969.00)
                                                      --------------
NET CASH USED FOR FINANCING ACTIVITIES                 (3,186,969.00)
                                                      ==============
Net increase (decrease) in Cash and Cash
     equivalents                                           71,073.00
Cash and Cash equivalents at beginning
     of year                                              676,820.00
                                                      --------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                  747,893.00
                                                      ==============
</Table>
               See accompanying notes to the financial statements


                                       3
<PAGE>

(C)  EXHIBITS.

13   Quarterly report under section 13 of the Securities Exchange Act of 1934
     for the quarterly period ending September 30, 2001 for Spantel
     Communications Inc., formerly Receptagen Ltd.

16   Letter from BDO Dunwoody LLP, the Corporation's former auditor expressing
     BDO Dunwoody's concurrence with the statements made by Corporation herein
     regarding the change of the Corporation's auditor.

99   Certificate of Domestication in the State of Florida.

99.1 Certificate of Name Change from the State of Florida.


ITEM 8. CHANGE IN FISCAL YEAR.

The Corporation's year end will remain December 31.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                   RECEPTAGEN LTD.

NOVEMBER 7, 2001                   /s/ Mohamed Khashoggi
------------------------           -------------------------------
Date                               Signature of Authorized Officer

                                   Mohamed Khashoggi
                                   -------------------------------
                                   Name

                                   President and Director
                                   -------------------------------
                                   Title
[{"type": "8-K", "sequence": "1", "filename": "t06440e8-k.txt", "description": "FORM 8-K", "secsgml_size_bytes": 71812}]
{"company-data": {"conformed-name": "RECEPTAGEN LTD /WA/", "cik": "0000932818", "assigned-sic": "5122", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-25124", "film-number": "02532188"}, "business-address": {"street1": "390 BAY STREET", "street2": "STE 1600 M5H 2Y2", "city": "TORONTO ONTARIO", "state": "A6", "zip": "00000", "phone": "2067785260"}, "mail-address": {"street1": "390 BAY STREET", "street2": "SUITE 1600 M5H 2Y2", "city": "TORONTO ONTARIO"}}
FORM 8-K -- CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

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

Date of Report (Date of earliest event reported): October 23, 2001

RECEPTAGEN LTD.
---------------
(Exact name of registrant as specified in its charter)

CANADA                           0-25124                     n/a
------                           -------                     ---
(State or other                 (Commission                  (IRS Employer
jurisdiction of                 File Number)                 Identification No.)
incorporation)

390 Bay Street, Suite 1600, Toronto, Ontario                M5H 2Y2
--------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (416) 368-2500
                                                    --------------

N/A
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)

                    INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 1  CHANGES IN CONTROL OF REGISTRANT.

THE DATE AND A DESCRIPTION OF THE TRANSACTION(S) WHICH RESULTED IN THE CHANGE
IN CONTROL

On October 23, 2001 the Corporation completed a reverse take-over transaction
(the "Transaction") with Spantel Communications Inc. ("SCI"). The Corporation
consolidated its issued and outstanding common shares on the basis of one (1)
new common share for every ten (10) old common shares, and then issued
16,500,000 post-consolidation common shares to the sole shareholder of SCI.

NAME OF PERSON ACQUIRING CONTROL

Mohamed Khashoggi
Calle Ramon Areces S/N, Apto. 5-F
Marina Banus Blg. 3, Puerto Banus
29660, Malaga, Spain

AMOUNT AND THE SOURCE OF THE CONSIDERATION USED BY SUCH PERSON

Mr. Khashoggi acquired the 16,500,000 post-consolidation common shares of the
Corporation in exchange for all of the issued and outstanding common shares of
SCI.

BASIS OF THE CONTROL

Registered ownership of approximately 94.2% of the issued and outstanding
common shares of the Corporation.

THE PERCENTAGE OF VOTING SECURITIES OF THE REGISTRANT NOW BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY BY THE PERSON(S) WHO ACQUIRED CONTROL

As a result of the Transaction, Mr. Khashoggi is the registered owner of
approximately 94.2% of the Corporation's issued and outstanding
post-consolidation common shares.

IDENTITY OF THE PERSON(S) FROM WHOM CONTROL WAS ASSUMED

Control was assumed by the acquisition of common shares from treasury rather
than from existing shareholders. Prior to the Transaction, no one person or
group of persons acting in concert exercised control over the Corporation.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets out all persons who are currently the beneficial
owners of more than five percent of any class of the Corporation's voting
securities. The Corporation has only one class of voting securities, namely its
common shares.
NAME AND ADDRESS OF         AMOUNT AND NATURE OF       PERCENTAGE
TITLE OF CLASS      BENEFICIAL OWNER           BENEFICIAL OWNERSHIP        OF CLASS
--------------     -------------------         --------------------       ----------
Common Shares      Mohamed Khashoggi           16,500,000 common          94.2%
                   Calle Ramon Areces S/N,     shares directly owned
                   Apto. 5-F, Marina Banus     and registered in Mr.
                     Blg. 3,                   Khashoggi's name
                   Puerto Banus, 29660
                   Malaga, Spain
SECURITY OWNERSHIP OF MANAGEMENT

The following table sets out the beneficial shareholdings of the Corporation's
directors and executive officers. As a group, the directors and executive
officers of the Corporation hold 16,500,000 common shares, being 94.2% of the
Corporation's issued and outstanding voting shares. Except for Mr. Khashoggi,
who is the President of the Corporation, none of the other
directors and executive officers of the Corporation beneficially own any shares
of the Corporation.
NAME AND ADDRESS OF         AMOUNT AND NATURE OF        PERCENTAGE
TITLE OF CLASS                 BENEFICIAL OWNER          BENEFICIAL OWNERSHIP         OF CLASS
--------------               -------------------         --------------------        ----------
Common Shares              Mohamed Khashoggi             16,500,000 common              94.2%
                           President                     shares directly owned
                           Calle Ramon Areces S/N,       and registered in
                           Apto. 5-F, Marina Banus       Mr. Khashoggi's name
                           Blg. 3, Puerto Banus,
                           29660
                           Malaga, Spain
CHANGE OF CONTROL ARRANGEMENTS

There are no arrangements which may result in a change of control of the
Corporation.

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

REVERSE TAKE-OVER OF SPANTEL COMMUNICATIONS INC.

On October 23, 2001 the Corporation acquired all (100%) of the issued and
outstanding common shares of Spantel Communications Inc. ("SCI") (the
"Transaction"). SCI is a British Virgin Islands company which is the parent
company of Spantel 2000 S.A., a Spanish company engaged in the business of
providing long-distance telephone service in Spain. Pursuant to the
Transaction, the Corporation:

(a)  issued 528,399 of the Corporation's post-consolidation common shares to
     creditors of the Corporation (the "Creditors") at $1.00 per share in full
     settlement of the debts owed to them (the "Debt Settlement"),

(b)  consolidated the Corporation's issued and outstanding common shares on the
     basis of one (1) new common share for every ten (10) old common shares, and

(c)  issue 16,500,000 post-consolidation common shares to the sole shareholder
     of SCI in exchange for 100% of the SCI common shares.

On July 12, 2001, the Corporation's shareholders approved the Transaction at a
shareholders' meeting (the "Meeting") duly held in accordance with applicable
law. Prior to the Meeting, all of the Corporation's shareholders received a
Management Information Circular which provided sufficient information for such
shareholders to make adequately informed decisions concerning the Transaction.

As a result of the Debt Settlement, the Corporation has eliminated $528,399 of
its outstanding debt.
THE PRINCIPLE FOLLOWED IN DETERMINING THE AMOUNT OF CONSIDERATION

The amount of the consideration for the acquisition of all of the issued and
outstanding shares of SCI was determined by arm's length negotiations between
the management of the Corporation and the shareholder of SCI.

THE IDENTITY OF THE PERSON(S) FROM WHOM THE ASSETS WERE ACQUIRED OR TO WHOM
THEY WERE SOLD

The common shares of SCI were acquired from Mr. Mohamed Khashoggi (see Item 1
above).

MATERIAL RELATIONSHIP BETWEEN THE VENDOR AND THE CORPORATION OR ANY OF ITS
AFFILIATES, DIRECTORS OR OFFICERS OF THE REGISTRANT, OR ANY ASSOCIATES OF THE
SAME

None.

ITEM 3. BANKRUPTCY OR RECEIVERSHIP.

N/A

ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

On June 11, 2001, BDO Dunwoody LLP resigned as the auditors of the Corporation
and were replaced by Salberg & Company P.A.. The change of auditors occurred as
part of the Transaction, and was approved by the shareholders of the
Corporation at their annual meeting held on July 12, 2001.

BDO Dunwoody LLP did not audit or report on the Corporation's financial
statements for the last three fiscal years (the years ended December 31, 1998,
1999 and 2000). These financial statements were audited by Salberg & Company,
P.A., which was retained for this purpose.

The report of BDO Dunwoody LLP for the financial statements for the years ended
December 31, 1997, 1996 and 1995 (being the last financial statements audited
by BDO Dunwoody LLP) did not contain an adverse opinion or disclaimer of
opinion, and were not modified as to uncertainty, audit scope or accounting
principles.

There were no disagreements between the Corporation and BDO Dunwoody LLP.

Salberg & Company, P.A. was not consulted regarding the application of
accounting principles to the Transaction, nor was it consulted regarding any
disagreement between the Corporation and BDO Dunwoody LLP. Salberg & Company,
P.A. was selected because:

(a)  the Corporation saw an opportunity to reactivate itself through the
     Transaction;

(b)  to complete the Transaction, the Corporation had to have its financial
     statements for the
1998, 1999 and 2000 fiscal years audited; and

(c)  the Corporation determined that Salberg & Company, P.A. could provide the
     required auditing and accounting services for a lower price.

The decision to change auditors was made by the audit committee of the board of
directors of the Corporation and was approved by the full board of directors.

The Corporation provided to BDO Dunwoody LLP a notice of change of auditor
containing the disclosures made in this Item 4, and received from BDO Dunwoody
LLP a letter stating that BDO Dunwoody LLP was in agreement with the statements
made in that notice. A copy of the notice of change of auditor and of the
response from BDO Dunwoody LLP is attached to this Form 8-K as Exhibit "A".

ITEM 5. OTHER EVENTS.

SHARE CONSOLIDATIONS (REVERSE STOCK SPLITS)

On June 30, 1998, the shareholders of the Corporation approved the consolidation
(reverse stock split) of the Corporation's issued and outstanding shares on a
20:1 basis (i.e. one (1) new share for every twenty (20) old shares). This
consolidation was not put into effect until August 16, 2001. The consolidation
was put into effect at that time in anticipation of the proposed reverse
takeover transaction with SCI. As a result of the completion of the 20:1 share
consolidation, there were 6,652,365 common shares of Receptagen issued and
outstanding.

A further 10:1 share consolidation took place on October 16, 2001, after the
completion of the Debt Settlement and prior to the acquisition of SCI, as
approved at the shareholders' meeting held on July 12, 2001. As a result of the
Debt Settlement and the 10:1 share consolidation, the Corporation had 1,193,636
common shares issued and outstanding immediately prior to the issuance of a
further 16,500,000 common shares for the acquisition of SCI.

DOMESTICATION IN THE STATE OF FLORIDA

On October 18, 2001, the Corporation completed its domestication and
incorporation in the State of Florida, transferring the Corporation's charter
from Canadian federal jurisdiction.

NAME CHANGE

On October 30, 2001, the Corporation filed documents with the State of Florida
changing the Corporation's name from Receptagen Ltd. to "Spantel Communications
Inc.".

ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.

No director of the Corporation has resigned or declined to stand for
re-election because of a
disagreement with the Corporation or any matter relating to the
     registrant's operations, policies or practices.

The following persons were elected directors of the Corporation at its last
meeting of shareholders, held on July 12, 2001:
NAME AND MUNICIPALITY OF              POSITION WITH THE          DATE FIRST ELECTED/
      RESIDENCE                          CORPORATION                  APPOINTED              PRINCIPAL OCCUPATION
------------------------              -----------------          -------------------         --------------------
Warren Wheeler                        Director                       1993                    President and CEO of Receptagen Ltd.
Madeira Beach, Florida, U.S.A.

Peter Prendergast                     Director                       July 12, 2001           Independent Business Executive
Toronto, Ontario, Canada

Linda Kent                            Director                       July 12, 2001           Investment Advisor
Aurora, Ontario, Canada                                                                      Credifinance Securities Limited

Georges Benarroch                     Director                       July 12, 2001           Chairman of Credifinance Capital
Paris, France                                                                                Corp. and President of InterUnion
                                                                                             Financial Corp. and InterUnion
                                                                                             Asset Management

Mohamed Khashoggi                     President and Director         July 12, 2001           President, Spantel
Malaga, Spain                                                                                Communications Inc. and Spantel
                                                                                             2000, S.A.
Upon the completion of the reverse take-over with SCI, Warren Wheeler, Peter
Prendergast, Linda Kent and Georges Bennaroch resigned and were replaced by
nominees of SCI, such that the directors and officers of the Corporation are now
as follows:
NAME AND MUNICIPALITY OF                POSITION WITH THE CORPORATION
       RESIDENCE                          FOLLOWING THE ACQUISITION                  PRINCIPAL OCCUPATION
------------------------                -----------------------------                --------------------
Juan Bautista Perez Aprico              Director                                     President, Group Radiotronica, S.A.
Madrid, Spain

Jose Ramon Basterra                     Director and Chief Executive Officer         C.E.O., Spantel Communications Inc. and
Malaga, Spain                                                                        Spantel 2000 S.A.

Mohamed A. Khashoggi                    President and Director                       President, Spantel Communication Inc.
Malaga, Spain                                                                        and Spantel 2000, S.A.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

The following is a list of the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this report.

(A)  FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

Audited financial statements of Spantel 2000, S.A. for the period from
incorporation up to March 31, 2001.

(B)  PRO FORMA FINANCIAL INFORMATION.

Pro forma unaudited consolidated balance sheet for the Corporation after the
completion of the acquisition of SCI and Spantel 2000, S.A.
SPANTEL 2000, S.A.

                                     *****

                              Financial Statements
                          for the three months period
                              ended March 31, 2001

                                                            [ERNST & YOUNG LOGO]
[ERNST & YOUNG -- LOGO]               Edificio Veleria        Tel.: 95 222 85 06
                                      Paseo de la Farola, 5   Fax:  95 222 66 16
                                      29016 Malaga

To the Shareholders of SPANTEL 2000, S.A.

We have compiled the accompanying balance sheet of Spantel 2000, S.A. as of
March 31, 2001, and the related statement of income, retained earnings, and
cash flows for the period then ended, and the accompanying notes to these
financial statements.

This compilation is limited to presenting in the form of financial statements
in accordance with US GAAP, information that is the representation of the
owners. We have not audited or reviewed the accompanying financial statements
and, accordingly, do not express an opinion or any other form of assurance on
them.

This compilation was based on the audited Spanish financial statements as of
March 31, 2001, on which we issued a qualified opinion of which a translation
is attached. The reconciliation of statutory equity to US GAAP equity can be
found in Note 4 of the accompanying financial statements.

This report is intended solely for the information and use of the shareholders
of the Company.

                                             ERNST & YOUNG

                                             /s/ Rafael Paez Martinez
                                             -----------------------------------
                                             Rafael Paez Martinez

April 24, 2001
[ERNST & YOUNG -- LOGO]               Edificio Veleria        Tel.: 95 222 85 06
                                      Paseo de la Farola, 5   Fax:  95 222 66 16
                                      29016 Malaga

                      AUDIT REPORT ON THE ANNUAL ACCOUNTS
                   (TRANSLATED FROM THE ORIGINAL IN SPANISH)

To the Shareholders
of Spantel 2000, S.A.

1.   We have audited the accompanying financial statements of Spantel 2000,
S.A., which comprise the balance sheet as at March 31, 2001, the profit and
loss account and the explanatory notes for the three months period then ended,
the preparation of which is the responsibility of the Company's Board of
Directors. Our responsibility is to express an opinion on the financial
statements taken as a whole based on our work carried out in accordance with
auditing standards generally accepted in Spain, which require the examination,
through the performance of selective tests, of the evidence supporting the
annual accounts and the evaluation of their presentation, the accounting
principles applied and of the estimates made.

2.   In accordance with Spanish Mercantile Law, the Directors include, for
comparative purposes, for each of the captions presented in the balance sheet,
the profit and loss account and the statement of source and application of
funds, in addition to that figures of March 2001, those of December 2000. Our
opinion refers exclusively to the financial statements for the three months
period ended March 31, 2001. On March 5, 2001 we issued our audit opinion on
the year 2000 annual accounts on which we expressed a qualified opinion.

3.   As indicated in Note 2.b) of the accompanying explanatory notes, the
Company has incurred in losses during the year, as a result of which at March
31, 2001 it is in a situation considered cause for dissolution under article
260.1.4. of Spanish Corporate Law. In order to mitigate this issue, the Company
has started a reorganisation process of its activities in order to modify the
trend in negative results as well as approving a share capital increase of
2,000 million pesetas (12,020,000 euros). Given these circumstances, the
Company's ability to continue its operations so as realise its assets and
settle its liabilities at the amounts and in accordance with the
classifications which are reflected in the accompanying annual accounts will
depend on the successful outcome of the reorganisation activities undertaken
and the completion of the share capital increase.
[ERNST & YOUNG -- LOGO]

4.   In our opinion, except for the effects of any adjustment that might have
been considered necessary if the final outcome of the uncertainty described in
the qualification contained in paragraph 3 were known, the accompanying
financial statements give a true and fair view, in all material respects, of
the net deficit and financial position of Spantel 2000, S.A. at March 31, 2001
and of the results of its operations for the three months period then ended,
and contain the information necessary and sufficient for their adequate
interpretation and understanding, in conformity with generally accepted
accounting principles and criteria in Spain applied on a basis consistent with
those of the preceding year.

                                             ERNST & YOUNG

                                             ORIGINAL SIGNATURE IN SPANISH

                                             ----------------------------------
                                             Rafael Paez Martinez

April 24, 2001
BALANCE SHEETS                                       THREE MONTHS               YEAR ENDED
                                                     PERIOD ENDED              DECEMBER 31,
                                                    MARCH 31, 2001                 2000
                                                    --------------            -------------
Spantel 2000, S.A.
(Euros)

ASSETS

Current assets

Cash and cash equivalents                              355,873.94                727,373.71

Related parties receivable, net of allowances
  of 2,772,296.97 (March 31, 2001);
  1,788,360.16 (December 31, 2000)                     939,001.86                596,762.59
Accounts receivable, net of allowances
  of 524,162.18 (March 31, 2001);
  430,199.52 (December 31, 2000)                     1,540,711.08                686,001.21
Other receivables, net of allowances
  of 1,847,306.56 (March 31, 2001);
  1,345,873.83 (December 31, 2000)                     124,446.88                165,996.27
Inventories                                              5,734.41                  3,484.37
Public entities                                        740,248.49                485,802.63
                                                    -------------             -------------
Total current assets                                 3,706,016.66              2,665,420.78

Other Assets

Investments, net of allowances of
  336,566.78 (December 31, 2000)                        91,437.98               (243,205.56)

Property and Equipment                                 635,882.02                580,440.64
                                                    -------------             -------------
                                                     4,433,336.66              3,002,655.86
                                                    =============             =============

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities
Amounts due to related parties                       9,926,868.06              7,167,628.35
Accounts payable                                     1,588,760.11              1,090,857.81
Public entities                                         55,579.80                 18,344.18
                                                    -------------             -------------
Total current liabilities                           11,571,207.97              8,276,830.34

Shareholders' Deficit
Common Stock
  Issued shares: 20,000 (2000) and
     500 (1999)
  Par value: 6.01                                      123,207.48                123,207.48
Prior year losses                                   (5,397,381.96)               (79,158.66)
Loss for the year                                   (1,863,696.83)            (5,318,223.30)
                                                    -------------             -------------
                                                    (7,137,871.31)            (5,274,174.48)
                                                    -------------             -------------
                                                    (4,433,336.66)             3,002,655.86
                                                    =============             =============
STATEMENT OF INCOME                                THREE MONTHS      YEAR ENDED
Spantel 2000, S.A.                                 PERIOD ENDED     DECEMBER 31,
(Euros)                                           MARCH 31, 2001        2000
                                                  --------------    ------------
Net sales                                          1,545,135.89     2,178,663.66

Cost of sales                                      1,223,424.22     1,923,437.07
Marketing and selling                              1,987,229.61     4,701,563.12
General and administrative                            43,723.79       128,788.64
Depreciation and amortization                         29,856.31        69,806.59
(Gains)/Losses on investments                       (330,556.67)      336,566.78
Other income-net                                     455,155.47       336,724.76
                                                   ------------     ------------
Losses from continuing operations before
   income taxes and extraordinary item             1,863,696.83     5,318,223.30

INCOME TAXES                                                 --               --
                                                   ------------     ------------
Losses from continuing operations before
   extraordinary item                              1,863,696.83     5,318,223.30

Extraordinary item, net of tax                               --               --
                                                   ------------     ------------
Net losses                                         1,863,696.83     5,318,223.30
                                                   ============     ============
STATEMENTS OF CASH FLOWS
THREE MONTHS     YEAR ENDED
                                                 PERIOD ENDED     DECEMBER 31,
                                                MARCH 31, 2001       2000
                                                --------------    ------------
Spantel 2000, S.A.
(Euros)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                               (1,863,696.83)    (5,318,223.30)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
  TO CASH FLOWS FROM OPERATING ACTIVITIES

Depreciation and amortization                       29,856.31         66,323.58
(Gain)/Loss on Spansurf Investment                (333,561.73)       336,566.78
                                                -------------     -------------
                                                (2,167,402.25)    (4,915,332.94)
Changes in operating assets and liabilities:
Receivables -- (increase)                       (1,409,845.62)    (1,918,146.24)
Accounts payable & other liabilities --
  (increase)                                       556,173.36        955,523.57
Inventories -- (increase) decrease                  (2,250.04)        28,166.56
                                                -------------     -------------
                                                  (855,922.30)      (934,456.11)
                                                -------------     -------------
NET CASH USED FOR OPERATING ACTIVITIES          (3,023,324.55)    (5,849,789.05)

CASH FLOWS FROM INVESTING ACTIVITIES

Share capital increase                                 --            120,202.42
Additions to property and equipment                (85,297.69)      (645,236.52)
Additions to investments                            (1,081.82)       (90,957.17)
                                                -------------     -------------
NET CASH USED FOR INVESTING ACTIVITIES             (86,379.51)      (615,991.27)

CASH FLOWS FROM FINANCING ACTIVITIES

Funds obtained from related parties              2,738,204.28      7,188,663.78
                                                -------------     -------------
NET CASH FROM FINANCING ACTIVITIES               2,738,204.28      7,188,663.78

Net increase (decrease) in cash and
  cash equivalents                                (371,499.77)       722,883.46
Cash and cash equivalents at
  beginning of year                                727,373.71          4,490.25
                                                -------------     -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR           335,873.94        727,373.71
                                                =============     =============
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------
SPANTEL 2000, S.A.

Notes to the Financial Statements

March 31, 2001

1.   BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Spantel 2000, S.A. was formed on April 28, 1999. Its current registered address
is Avda. Jose Banus S/N. Urb. Jardines del Puerto, local 21 Puerto Banus,
Marbella, Spain.

The corporate purpose involves marketing, network development and service
delivery in the telecommunications industry.

To perform this purpose, all telephone services are purchased from Lince
Telecomunicaciones, S.A. and RSL Communications Spain, S.A. based on the
corresponding supply contracts signed by the parties. These contracts are
renewed annually.

The Company's Directors consider that the contracts subscribed with these
telephone operators will be tacitly renewed on related expiration dates given
that all terms of the contracts have been met and that, if they were not to
renew their contracts, the Company would be able to continue rendering its
services to its customers via alternative operators in the communications
industry.

GOING CONCERN

The Company's financial statements prepared for the three months period ended
March 31, 2001 reflect a Shareholders' deficit amounting to approximately 7.14
million euros, as well as negative working capital amounting to approximately
7.87 million euros, due to which the Company is in a position which requires
dissolution under Spanish Corporation Law unless remedial action is taken.

To mitigate this situation, the Company agreed in a General Shareholders'
Meeting in December 2000, to carry out a capital increase amounting to
approximately 12.02 million euros. Part of this capital increase is to be
carried out by compensating a loan amounting to approximately 7.16 million
euros, which the Company has with its major shareholder.

The Directors also have a business plan to help the Company turn around losses
in the near future.

                                       4
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Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
AVDA. JOSE BANUS, S/N
JARDINES DEL MAR, 21
29660 MARBELLA (MALAGA)
C.I.F.: B-82344748
-------------------------------------------------------------------------------

Given the above, the Directors have formulated these financial statements under
the going concern concept, which implies the realization of assets and the
settlement of liabilities for the amounts and according to the classifications
shown in the accompanying financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates, and such differences may
be material to the financial statements.

CASH AND CASH EQUIVALENTS

All highly liquid investments with maturities of three months or less when
purchased, are classified as cash equivalents.

PROPERTY AND EQUIPMENT

Property and Equipment are valued at acquisition cost, less accumulated
depreciation.

Annual depreciation rates are calculated using the straight-line method over
the estimated useful life of the asset. Depreciation rates are as follows:
Depreciation rate
                              -----------------
Construction                         20%
Installations                        12%
Tools                                30%
Furniture                            10%
Computer equipment                   25%
Other                              10%-25%
Repairs which do not prolong the useful life of the assets, as well as expenses
for maintenance are charged directly to the profit and loss account. Those
costs which prolong or improve the life of the asset are capitalized.

INVESTMENTS

If the book value of equity investments in other companies is lower than
acquisition cost, the corresponding provision is recorded.

                                       5
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
________________________________________________________________________________

INVENTORIES

Inventories are valued at the lower of acquisition cost or net realisable value.

TRADE DEBTORS AND CREDITORS

Short- and long-term trade debtors and creditors, as well as other accounts
receivable and payable, are recorded at the related nominal value. Interest
included in the value of transactions is charged to the profit and loss account
as it accrues in keeping with financial criteria.

BAD DEBT PROVISION

The Company values accounts receivable taking into account specific cases in
which there is reasonable evidence to indicate bad debts or litigation in
progress, and records the necessary bad debt provisions to cover related risks.

As at December 31, 2000, the Company recorded provisions to cover customer
receivables balances amounting to 430,199.52 euros. During the three months
period ended March 31, 2001, this provision has been increased by an additional
amount of 93,962.66 euros, amounting to 524,162.18 euros.

According to the terms of prevailing contracts to date, the Company has
established commercial relations -- in some case exclusive relations -- with a
series of telemarketing agencies which provide the Company with marketing and
customer targeting services. Between 5% and 8% commission is paid for these
services based on the traffic generated by customers gained by the various
marketing agencies and payments on account of commissions between 18.03 to
24.04 euros are made for each new customer.

In the year 2000, the Company recorded a provision based on commissions paid in
advance amounting to approximately 2.99 million euros. This provision
corresponds to customers which did not consumed services during that year for
which the Company had made payments on account to telemarketing agencies.

Based on the traffic carried for the period January 1 to March 31, 2001, the
Company has increased this provision by 1.10 million euros amounting to 4.09
million euros as at March 31, 2001.

                                       6

_______________________________________________________________________________
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
________________________________________________________________________________

Commissions are accrued based on customer consumption and not on the number of
customers obtained by the agencies. Given this circumstance, advances paid may
be recovered. However, the Directors consider that, the corresponding provision
should be recorded. Related accrued commissions will be offset against future
consumption corresponding to current or new customers which these telemarketing
agencies obtain for the Company.

Of the agencies mentioned above, Coast Telemarketing, S.L. and ABC
Telemarketing, S.L. are considered to be associated companies given the degree
of control exercised by various members of the Company's Board of Directors.
Approximately 0.62 million euros of the abovementioned provision correspond to
Coast Telemarketing, S.L. and approximately 1.77 million euros to ABC
Telemarketing, S.L.

INCOME TAXES

Corporate Income Tax is computed by calculating the differences between
accounting results and tax results (taxable base), distinguishing between
"permanent differences" or "temporary differences", in order to determine the
corporation tax payable for the year.

REVENUE RECOGNITION

Income and expenses are recorded on accrual basis, that is, at the moment the
goods or services are provided.

ADVERTISING EXPENSES

Advertising and marketing expenses are recorded in the statement of income when
the goods or services are provided.

Related expenses incurred for the three months period ended March 31, 2001
amounted to approximately 0.13 million euros.

                                       7

_______________________________________________________________________________
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

2. PROPERTY AND EQUIPMENT
Euros
                                                                  ------------------------------------------------------
                                                                   Balance at                                 Balance at
                                                                  December 31,                                 March 31,
                                                                     2000                Additions               2001
                                                                  ------------           ---------            ----------
COST
Construction                                                       11,460.65                 --                11,460.65
Technical installations and machinery                              98,789.24             42,797.15            141,586.39
Other installations, tools and furniture                           50,840.78              2,418.78             53,259.56
Data processing equipment                                         344,578.80             15,584.51            360,163.31
Software                                                           60,347.60             24,437.75             84,785.35
Other assets                                                       80,820.62                 59.50             80,880.12
                                                                  ----------            ----------            ----------
                                                                  646,837.69             85,297.69            732,135.38
ACCUMULATED DEPRECIATION
Land and construction                                              (1,789.75)              (565.18)            (2,354.93)
Technical installations and machinery                              (3,345.65)            (3,640.94)            (6,986.59)
Other installations, tools and furniture                           (2,678.78)            (1,354.47)            (4,033.25)
Data processing equipment                                         (52,950.56)           (21,706.66)           (74,657.22)
Software                                                             (316.42)              (429.07)              (745.49)
Other assets                                                       (5,315.89)            (2,159.99)            (7,475.88)
                                                                  ----------            ----------            ----------
                                                                  (66,397.05)           (29,856.31)           (96,253.36)
                                                                  ----------            ----------            ----------
Net value                                                         580,440.64             55,441.38            635,882.02
                                                                  ==========            ==========            ==========
3. INVESTMENTS

The detail and movement of Investments for the three months period ended
March 31, 2001 was the following:
Euros
                                                             -----------------------------------------------------------
                                                              Balance at                                      Balance at
                                                             December 31,                                      March 31,
                                                                2000           Additions      Disposals          2001
                                                             ------------      ---------      ---------       ----------
Investments in Group companies                                  3,005.06       3,005.06        (6,010.12)         --
Provisions for investments in Group companies                (336,566.79)         --          336,566.79          --
Long-term deposits                                             90,356.17       1,081.81            --         91,437.98
                                                             -----------       --------       ----------      ---------
                                                             (243,205.56)      4,086.88       330,556.67      91,437.98
                                                             ===========       ========       ==========      =========
8
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
AVDA. JOSE BANUS, S/N
JARDINES DEL MAR, 21
29660 MARBELLA (MALAGA)
C.I.F.: B-82344748
-------------------------------------------------------------------------------

Disposals of "Investments in Group companies" correspond to the sale of 500
participations of Spansurf, S.L. and an additional 500 participations of
Spantel Tecnica, S.L. with a nominal value of 6.01 euros each. Both investments
have been sold for a total amount of 0,006 euros each.

In year 2000, the Company recorded a provision for its investment in Spansurf,
S.L. to cover its net deficit for a total amount of 336,566.79 euros. This
provision has been reversed as a consequence of the sale of the Spansurf, S.L.
participations mentioned above.

The detail of Long-term deposits at March 31, 2001 is the following:
Euros
                                        --------------
Office security deposit                    3,485.87
Lince Telecomunicaciones, S.A.            30,050.60
RSL Communications Spain, S.A.            48,080.97
Postal and telegraph agency                7,007.80
Other                                      2,812.74
                                          ---------
                                          91,437.98
                                          =========
4.   SHAREHOLDER'S DEFICIT

The detail and movements of the various accounts included under Shareholder's
Deficit during the three months period ended March 31, 2001 were the following:
Euros
                                        ---------------------------------------------------------------------------------------
                                           Balance at               Appropriation of             Profit            Balance at
                                        December 31, 2000             2000 results               (loss)          March 31, 2000
                                        -----------------           ---------------          --------------      --------------
Share capital                                123,207.48                   --                       --                123,207.48
Prior year losses                            (79,158.66)            (5,318,223.30)                 --             (5,397,381.96)
Loss for the year                         (5,318,223.30)             5,318,223.30            (1,863,696.83)       (1,863,696.83)
                                        ---------------             -------------            -------------        -------------
                                          (5,274,174.48)                  --                 (1,863,696.83)       (7,137,871.31)
                                        ===============             =============            =============        =============
Share capital is represented by 20,500 shares with a nominal value of 6.01
euros each, all of which have been paid in. All units bear the same rights, are
cumulative and indivisible.

Spantel Communications Inc. which fully subscribed the share capital increased
in December 2000, is the major shareholder of the Company owning 97.56% of the
total number of shares.

                                       9
--------------------------------------------------------------------------------
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Hoja M-234.850
SPANTEL 2000, S.A.
AVDA, JOSE BANUS, S/N
JARDINES DEL MAR, 21
29660 MARBELLA (MALAGA)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

The Shareholders' deficit reconciliation between Spanish GAAP and US GAAP is as
follows:
Euros
                                                                  --------------
Share capital as at December 31, 2000                                123,207.48
Net loss for the year 2000 under Spanish GAAP                     (5,332,025.33)
Prior year losses                                                    (13,592.70)
Start up expenses adjustments*                                       (51,763.93)
                                                                  -------------
Shareholders' Deficit as at December 31, 2000 under US GAAP       (5,274,174.48)
Net loss for the three months ended March 31, 2001                (1,867,159.14)
Start up expenses amortization for the year*                           3,462.31
                                                                  -------------
Shareholders' deficit as at March 31, 2001 under US GAAP          (7,137,871.31)
                                                                  =============
*  Start up expenses are treated as intangible asset under Spanish GAAP and are
   amortized within 5 years. Under US GAAP, those expenses are charged to the
   Profit and loss account when incurred.

5. RELATED PARTIES

The detail of related parties balances as at March 31, 2000 is the following:
Euros
                                                    -------------------------------
                                                        Debtor           Creditor
                                                    -------------      ------------
Easy Rent a Car, S.A.                                344,881.12             --
Spansurf, S.L.                                       384,273.95             --
Coast Telemarketing, S.L.                            752,765.75             --
ABC Telemarketing, S.L.                            2,124,460.12             --
Spantel Communications Inc.                             --             7,167,628.35
Spantel Tecnica, S.L.                                 12,021.18             --
Spanpower, S.L.                                        2,851.71             --
AD Rent a car, S.A.                                   90,045.00             --
                                                  -------------        ------------
Balances with Group and associated companies       3,711,298.83        7,167,628.35
Related parties allowances                        (2,772,296.97)            --
Balances with Member of the Board                       --             2,759,239.71
                                                  -------------        ------------
                                                     939,001.86        9,926,868.06
                                                  =============        ============
10

--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

The Company transferred funds to Easy Rent a Car, S.A. and Spansurf, S.L. in
order to finance their operations during the year.

All the companies included in this note, except for Spantel Communications
Inc., which is the Company's major shareholder, are considered related party
given the degree of control exercised by one of the Company's board members.

Funds paid in advance to Coast Telemarketing, S.L. and ABC Telemarketing, S.L.
(the Agencies) correspond to commissions paid on account of consumption by
customers obtained for the Company in keeping with the terms of prevailing
contracts.

As explained in Note 1, the Company has decided to record bad debt provisions
based on actual consumption accrued during the year by the customers
contributed by each of the Agencies and the real possibilities of the Company
recovering the funds paid in advance.

The detail of debit balances net of provisions at March 31, 2001 corresponding
to balances with the Agencies, which are considered related parties, is as
follows:
Euros
                                -----------------------------------------------
                                Debit Balances     Provisions       Net Balance
                                --------------     ----------       -----------
Coast Telemarketing, S.L.         752,765.75         (619,579.32)   133,186.43
ABC Telemarketing, S.L.         2,124,460.12       (1,768,443.70)   356,016.42
                                ------------       -------------    ----------
                                2,877,225.87       (2,388,023.02)   489,202.85
                                ============       =============    ==========
Commissions accrued by Coast Telemarketing, S.L. and ABC Telemarketing, S.L.
amounting to zero euros and 18,577.28 euros, respectively, were deducted from
total debtor balances.

In year 2000, the Company received approximately 7.21 million euros in funds
from its major shareholder in order to finance its operations.

During the three months period ended March 31, 2001 the Company has received
funds from one of the Members of the Board for approximately 2.76 million euros
in order to finance its operations.

On December, 2000 in a General Shareholder's Meeting it was agreed to make a
capital increase for a total amount of approximately 12.02 million euros. Part
of this capital increase will be carried out by compensating loans outstanding
with its major shareholder. This capital increase is expected to be realised in
2001.

                                       11
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
________________________________________________________________________________

6.   UNCERTAINTIES AND RISKS

As mentioned in Notes 1 and 5, the Company has recorded bad debt provisions
amounting to 4,092,476.55 euros for commissions paid on account in relation to
customers contributed by Coast Telemarketing, S.L. and ABC Telemarketing, S.L.
(related parties), as well as Conexworld and B&N Multiplanet (third parties).

However, based on a new system which directly assigns customer consumption
without customers dialing prefixes and the new system applied for adding new
customers based on signed contracts, the Company expects significant increases
in consumption of current and new customers obtained through the abovementioned
agencies. Under these circumstances, management believes that nearly all of the
aforementioned provisions would be released as this consumption generates
commissions since the consumption corresponding to commissions paid on account
may be traced to the group of customers contributed by each agency, but not to
individual customers. Consequently, any commission accrued by a customer
associated to a specific agency would be discounted from payments on account
previously given without taking into account the customer who actually
generated related consumption.

Given the above, the Company is confident that the provisions recorded for this
concept will be reversed in a reasonable amount of time.

7.   PUBLIC ENTITIES

The detail of payables to and receivables from public bodies is the following:
Euros
                                                       ------------------------
                                                          Debit         Credit
                                                       ----------     ---------
Personal income tax withholdings                               --     16,721.47
Social Security                                            796.49     23,311.99
VAT                                                    739,452.00     15,546.34
                                                       ----------     ---------
                                                       740,248.49     55,579.80
                                                       ==========     =========
12

_______________________________________________________________________________
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
--------------------------------------------------------------------------------

The reconciliation of pre-tax results to taxable income was the following:
Euros
                                                                   ------------
Pre-tax book loss                                                 (1,863,696.83)
Permanent differences                                              1,579,332.22
                                                                   ------------
Taxable loss for tax purposes                                       (284,364.61)
                                                                   ============
At March 31, 2000, the Company has cumulative net operating loss carryforwards
of approximately 1.77 million euros for income tax purposes, which begin to
expire in 2003.

8.   INCOME AND EXPENSES

The transactions carried out with related companies during the three months
period ended March 31, 2001 were the following:
Euros
                                                                   ------------
Commissions accrued                                                   89,429.22
Payments on account                                                1,519,657.00
                                                                   ------------
                                                                   1,609,086.22
                                                                   ============
In 2001 the average number of employees was the following:
Number
                                                                     --------
General Manager                                                         1
General and Administrative personnel                                    7
Marketing and selling personnel                                        25
                                                                      ---
                                                                       33
                                                                      ===
13
--------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL 2000, S.A.
Avda. Jose Banus, s/n
Jardines del Mar, 21
29660 Marbella (Malaga)
C.I.F.: B-82344748
-------------------------------------------------------------------------------

9. GOING CONCERN

As indicated in Note 1, the Company has a shareholders' deficit and is in a
situation considered cause for dissolution, under Spanish corporate law.

To restore equity, it was agreed at the Company's General Shareholders' Meeting
held in December 2000, to carry out a capital increase of approximately 12.02
million euros. Part of this capital increase will be performed by the
compensation of a loan with its major shareholder. This capital increase is
expected to take place in 2001.

In addition, the Company is confident that customer consumption will increase
significantly in 2001 and in subsequent years due to the implementation of
direct access networks contracted by the Company as well as the improvement
expected from the new system for adding new customers based on signed contracts.

April 20, 2001

/s/ Mohamed A. Khashoggi                        /s/ Frank Louis Palumbo
------------------------------------            -------------------------------
Mohamed A. Khashoggi                            Frank Louis Palumbo

/s/ Jose Ramon Basterra Lopez-Tapia
------------------------------------
Jose Ramon Basterra Lopez-Tapia

                                       14

-------------------------------------------------------------------------------
Inscrita en el Registro Mercantil de Madrid, folio 160, Tomo 14.252, Libro 0,
Hoja M-234.850
SPANTEL COMMUNICATIONS INC.
                                 & SUBSIDIARIES

                PRO-FORMA FINANCIAL STATEMENTS NINE MONTHS ENDED

                               SEPTEMBER 30,2001

                      (UNAUDITED - PREPARED BY MANAGEMENT)
SPANTEL COMMUNICATIONS INC.
                                 & SUBSIDIARIES

                                    CONTENTS

                                                                         Page(s)
                                                                         -------

Consolidated Pro-Forma Statements of Balance Sheets                         1

Consolidated Pro-Forma Statements of Operations                             2

Consolidated Pro-Forma Statements of Cash Flow                              3
SPANTEL COMMUNICATIONS INC. & SUBSIDIARIES
                     PRO-FORMA STATEMENTS OF BALANCE SHEET
                          (EXPRESSED IN U.S. DOLLARS)
                                  (UNAUDITED)
                  NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2001
NINE MONTHS
                                                                PERIOD ENDED
                                                               SEPTEMBER, 2001
                                                               ---------------
ASSETS
     CURRENT ASSETS
          Cash and equivalents                                      747,893.00
          Related Parties receivables                             1,798,823.00
          Accounts receivables                                    1,822,322.00
          Other receivables                                         242,299.00
          Inventories                                                38,620.00
          Public entities                                           451,393.00
                                                                --------------
          TOTAL CURRENT ASSETS                                    5,101,350.00
                                                                --------------
     OTHER ASSETS
          Investments (Spaniel 2000 S.A.)                            91,362.00
          Property and Equipment                                    685,025.00
                                                                --------------
          TOTAL OTHER ASSETS                                        776,387.00
                                                                --------------
     TOTAL ASSETS                                                $5,877,737.00
                                                                ==============

LIABILITIES
     OTHER LIABILITIES
          Amounts to be related parties                          11,521,632.00
          Accounts payables                                       2,388,261.00
          Accounts payables subject to conversion offers            466,150.00
          Public entities                                            50,477.00
                                                                --------------
          TOTAL OTHER LIABILITIES                                14,426,520.00
                                                                --------------
     PROVISION FOR LIABILITIES AND CHARGES                                0.00
                                                                --------------
     EQUITY
          Common Stock                                           13,722,731.00
          Currency translation Adjustments                          113,348.00
          Prior year losses                                     (20,174,726.00)
          Loss for the year                                      (2,210,136.00)
                                                                --------------
          TOTAL EQUITY                                           (8,548,783.00)
                                                                --------------
     TOTAL LIABILITIES                                            5,877,737.00
                                                                ==============
See accompanying notes to the financial statements

                                       1
SPANTEL COMMUNICATIONS INC & SUBSIDIARIES
                       PRO-FORMA STATEMENTS OF OPERATIONS
                          (EXPRESSED IN U.S. DOLLARS)
                                  (UNAUDITED)
                  NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2001
NINE MONTHS
                                                                PERIOD ENDED
                                                               SEPTEMBER, 2001
                                                               ---------------
INCOMES
     Net sales                                                  5,281,926.00

EXPENSES
     Cost of Sales                                              3,902,240.00
     Marketing and Selling Expenses                             2,222,686.00
     General and Administrative Expenses                          443,522.00
     Depreciation and Amortization                                177,006.00
     (Gains)/Losses on Investments                               (307,892.00)
     Other expenses/(Income)                                    1,054,500.00
                                                               -------------
Losses from continuing operations before
  Income taxes and Extraordinary items                         (2,210,136.00)
                                                               -------------
Income Taxes                                                            0.00
                                                               -------------
Losses from continuing operations before
  Extraordinary items                                          (2,210,136.00)
                                                               -------------
Extraordinary items, net of tax                                         0.00
                                                               -------------
Net Losses                                                     (2,210,136.00)
                                                               =============
See accompanying notes to the financial statements

                                       2
SPANTEL COMMUNICATIONS INC. & SUBSIDIARIES
                       PRO-FORMA STATEMENTS OF CASH FLOW
                          (EXPRESSED IN U.S. DOLLARS)
                                  (UNAUDITED)
                  NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2001
NINE MONTHS
                                                       PERIOD ENDED
                                                      SEPTEMBER, 2001
                                                      ---------------
CASH FLOWS FROM OPERATING ACTIVITIES

     Net Income (Losses)                               (2,210,136.00)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSSES)
TO CASH FLOWS FROM OPERATING ACTIVITIES

     Depreciation and Amortization                        177,006.00
     (Gain)/Losses on Investments                        (316,277.00)
                                                      --------------
                                                         (139,271.00)
                                                      --------------
CHANGES IN OPERATING ASSETS AND LIABILITIES

     Accounts Receivables & Other Assets                  721,276.00
     Accounts Payables & Other Payables                 5,235,322.00
     Inventories                                          (35,378.00)
                                                      --------------
                                                        5,921,220.00
                                                      --------------

NET CASH USED FOR OPERATING ACTIVITIES                  3,571,813.00
                                                      ==============

CASH FLOWS FROM INVESTING ACTIVITIES

     Additions to property and Equipment                 (333,460.00)
     Other Adjustments                                     23,003.00
     Additions to Investments                              (3,314.00)
                                                      --------------
NET CASH USED FOR INVESTING ACTIVITIES                   (313,771.00)
                                                      ==============

CASH FLOWS FROM FINANCING ACTIVITIES

     Funds obtained from related parties               (3,186,969.00)
                                                      --------------
NET CASH USED FOR FINANCING ACTIVITIES                 (3,186,969.00)
                                                      ==============
Net increase (decrease) in Cash and Cash
     equivalents                                           71,073.00
Cash and Cash equivalents at beginning
     of year                                              676,820.00
                                                      --------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                  747,893.00
                                                      ==============
See accompanying notes to the financial statements

                                       3
(C)  EXHIBITS.

13   Quarterly report under section 13 of the Securities Exchange Act of 1934
     for the quarterly period ending September 30, 2001 for Spantel
     Communications Inc., formerly Receptagen Ltd.

16   Letter from BDO Dunwoody LLP, the Corporation's former auditor expressing
     BDO Dunwoody's concurrence with the statements made by Corporation herein
     regarding the change of the Corporation's auditor.

99   Certificate of Domestication in the State of Florida.

99.1 Certificate of Name Change from the State of Florida.

ITEM 8. CHANGE IN FISCAL YEAR.

The Corporation's year end will remain December 31.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                   RECEPTAGEN LTD.

NOVEMBER 7, 2001                   /s/ Mohamed Khashoggi
------------------------           -------------------------------
Date                               Signature of Authorized Officer

                                   Mohamed Khashoggi
                                   -------------------------------
                                   Name

                                   President and Director
                                   -------------------------------
                                   Title