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

                                   Form 10-QSB

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

For the quarter ended: June 30, 2001

Commission file no.:   29201


                            ELVA INTERNATIONAL, INC.
                  ---------------------------------------------
                 (Name of Small Business Issuer in its Charter)

           Florida                                              65-0790761
------------------------------------                     -----------------------
(State or other jurisdiction of                          (I.R.S.Employer
incorporation or organization)                              Identification No.)

383 Diablo Road, Suite 100
 Danville, CA                                                    94526
------------------------------------------               -----------------------
(Address of principal executive offices)                      (Zip Code)

Issuer's telephone number:  (925) 831-0504

Securities registered under Section 12(b) of the Act:

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

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

                    Common Stock, $.0001 par value per share
                      -------------------------------------
                                (Title of class)

Copies of Communications Sent to:
                                      Donald F. Mintmire
                                      Mintmire & Associates
                                      265 Sunrise Avenue, Suite 204
                                      Palm Beach, FL 33480
                                      Tel: (561) 832-5696 - Fax: (561) 659-5371



<PAGE>



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

                     Yes  X               No
                        ----                ----

     As of June 30,  2001,  there are  6,173,500  shares of voting  stock of the
registrant issued and outstanding.







































<PAGE>



PART I

Item 1.      Financial Statements






                          INDEX TO FINANCIAL STATEMENTS


Consolidated Balance Sheets.................................................F-2

Consolidated Statements of Operations and Comprehensive Income (Loss).......F-3

Consolidated Statements of Stockholders' Equity (Deficiency)................F-4

Consolidated Statements of Cash Flows.......................................F-5

Notes to Consolidated Financial Statements..................................F-6













<PAGE>



<TABLE>
<CAPTION>
                            Elva International, Inc.
                           Consolidated Balance Sheets

                                                                           June 30,           December 31,
                                                                              2001                2000
                                                                     --------------------- -------------------
                                                                          (unaudited)
<S>                                                                  <C>                   <C>
                   ASSETS
CURRENT ASSETS
  Cash and equivalents                                               $             149,403 $           300,071
  Accounts receivable                                                                                  113,959
  VAT tax receivable                                                                34,307              54,998
                                                                     --------------------- -------------------
          Total current assets                                                     368,194             369,028
                                                                     --------------------- -------------------

PROPERTY AND EQUIPMENT
  Computers and equipment                                                          117,223              95,281

        Less accumulated depreciation                                             (57,892)            (46,792)
                                                                     --------------------- -------------------

          Net property and equipment                                                59,331              48,489
                                                                     --------------------- -------------------

OTHER ASSETS
  Deposits and other assets                                                         21,157              20,330
  Income tax credit receivable                                                     110,725             209,141
  Patent                                                                           382,863             420,110

        Less accumulated amortization                                             (65,745)            (61,364)
                                                                     --------------------- -------------------

          Net other assets                                                         449,000             588,217
                                                                     --------------------- -------------------
Total Assets                                                         $             876,525 $         1,005,734
                                                                     ===================== ===================

           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
   Accounts payable                                                  $             180,112 $           136,337
   Accrued Expenses
       Trade                                                                        51,704              61,541
       Salaries and payroll taxes                                                  250,170             149,232
   Advances from shareholders                                                      186,688              45,304
   Deferred revenue                                                                 89,381                   0
   Conditional government subsidy                                                   94,986             108,956
                                                                     --------------------- -------------------

          Total current liabilities                                                853,041             501,370
                                                                     --------------------- -------------------

LONG-TERM DEBT
   Conditional government subsidy                                                  189,972             217,910
   Other long-term debt                                                              5,174               8,512
                                                                     --------------------- -------------------

          Total long-term debt                                                     195,146             226,422
                                                                     --------------------- -------------------
Total Liabilities                                                                1,048,187             727,792
                                                                     --------------------- -------------------
Minority interest in consolidated subsidiary                                             0                   0
                                                                     --------------------- -------------------

STOCKHOLDERS' EQUITY (DEFICIENCY)
  Preferred stock, $0.0001 par value, authorized 10,000,000 shares;
     none issued and outstanding                                                         0                   0
  Common stock, $0.0001 par value, authorized 100,000,000 shares;
     6,173,500 and 54,020,000 issued and outstanding shares                            618               5,402
  Additional paid-in capital                                                     3,988,989           2,620,505
  Deferred compensation                                                        (1,115,212)                   0
  Accumulated comprehensive income (loss)                                            8,529            (27,801)
  Deficit                                                                      (3,054,586)         (2,320,164)
                                                                     --------------------- -------------------

          Total stockholders' equity (deficiency)                                (171,662)             277,942
                                                                     --------------------- -------------------
Total Liabilities and Stockholders' Equity (Deficiency)              $             876,525 $         1,005,734
                                                                     ===================== ===================
</TABLE>


     The accompanying notes are an integral part of the financial statements


                                       F-2

<PAGE>



<TABLE>
<CAPTION>
                            Elva International, Inc.
      Consolidated Statements of Operations and Comprehensive Income (Loss)
                                   (Unaudited)



                                                                      Three Months Ended                 Six Months Ended
                                                                           June 30,                        June 30,
                                                                -------------------------------  -----------------------------
                                                                    2001            2000             2001           2000
                                                                --------------- ---------------  -------------- --------------
<S>                                                             <C>             <C>              <C>            <C>
REVENUES                                                        $       176,127 $       117,049  $      288,655 $      191,062
                                                                --------------- ---------------  -------------- --------------

OPERATING EXPENSES
    Salaries                                                            207,989         174,593         426,247        339,438
    Advertising                                                          12,744          28,630          25,388         31,364
    Depreciation and amortization                                        12,979           8,313          26,492         17,642
    General and administrative                                          235,157         119,741         357,630        220,507
    Research and development                                            108,141          83,560         193,608        153,879
                                                                --------------- ---------------  -------------- --------------

          Total operating expenses                                      577,010         414,837       1,029,365        762,830
                                                                --------------- ---------------  -------------- --------------

 Operating Loss                                                        (400,883)       (297,788)       (740,710)      (571,768)
                                                                --------------- ---------------  -------------- --------------

OTHER INCOME (EXPENSE):
    Interest income                                                         310           1,006           4,041          1,357
    Interest expense                                                          0          (9,958)              0        (15,943)
    Foreign currency transaction gain (loss)                              2,228            (445)          2,247          3,093
                                                                --------------- ---------------  -------------- --------------

          Total other income (expense)                                    2,538          (9,397)          6,288        (11,493)
                                                                --------------- ---------------  -------------- --------------

Net loss before tax credit and minority interest                       (398,345)       (307,185)       (734,422)      (583,261)

    Foreign income tax credit                                                 0          (2,188)              0              0
    Minority interest in consolidated subsidiary income (loss)                0               0               0              0
                                                                --------------- ---------------  -------------- --------------

Net loss                                                               (398,345)       (309,373)       (734,422)      (583,261)

Other comprehensive income (loss):
    Foreign currency translation gain (loss)                              6,348            (370)         36,330         43,610
                                                                --------------- ---------------  -------------- --------------
Comprehensive loss                                              $      (391,997)$      (309,743) $     (698,092)$     (539,651)
                                                                =============== ===============  ============== ==============
Net loss per common share, basic                                $         (0.07)$         (0.01) $        (0.13)$        (0.03)
                                                                =============== ===============  ============== ==============

Weighted average number of shares outstanding                         5,857,346      21,500,000       5,630,931     21,500,000
                                                                =============== ===============  ============== ==============
</TABLE>









     The accompanying notes are an integral part of the financial statements


                                       F-3

<PAGE>



<TABLE>
<CAPTION>
                            Elva International, Inc.
          Consolidated Statements of Stockholders' Equity (Deficiency)



                                                                                                 Accum.                 Total
                                                                            Add'l.                Comp.                Stockholders'
                                                  Number of     Common     Paid-in   Deferred    Income                 Equity
                                                    Shares       Stock     Capital    Comp.      (Loss)      Deficit   (Deficiency)
                                                  ------------ -------- ---------- ------------ --------- ------------ ------------
<S>                                               <C>          <C>      <C>        <C>          <C>       <C>          <C>
BEGINNING BALANCE,
December 31, 1998                                   21,500,000 $  2,150 $  828,401 $          0 $(52,349) $  (432,606) $    345,596

Year ended December 31, 1999:
   Other comprehensive income (loss)                         0        0          0            0   (1,176)            0      (1,176)
   Net loss                                                  0        0          0            0         0    (723,712)    (723,712)
                                                  ------------ -------- ---------- ------------ --------- ------------ ------------

BALANCE, December 31, 1999                          21,500,000    2,150    828,401            0  (53,525)  (1,156,318)    (379,292)

Year ended December 31, 2000:
   Conversion of debt of subsidiary for stock        1,720,000      172    557,305            0         0            0      557,477
   Shares issued for cash                            3,790,000      379  1,237,500            0         0            0    1,237,879
   Shares issued to effect 2 for 1 forward split    27,010,000    2,701    (2,701)            0         0            0            0
   Other comprehensive income (loss)                         0        0          0            0    25,724            0       25,724
   Net loss                                                  0        0          0            0         0  (1,163,846)  (1,163,846)
                                                  ------------ -------- ---------- ------------ --------- ------------ ------------

BALANCE, December 31, 2000                          54,020,000    5,402  2,620,505            0  (27,801)  (2,320,164)      277,942

Six months ended June 30, 2001: (unaudited)
------------------------------
   1 for 10 reverse split                         (48,618,000)  (4,862)      4,862            0         0            0            0
   Shares issued for cash                              125,000       13    199,987            0         0            0      200,000
   Shares issued for services                          646,500       65  1,163,635  (1,163,700)         0            0            0
   Deferred compensation amortization                        0        0          0       48,488         0            0       48,488
   Other comprehensive income (loss)                         0        0          0            0    36,330            0       36,330
   Net loss                                                  0        0          0            0         0    (734,422)    (734,422)
                                                  ------------ -------- ---------- ------------ --------- ------------ ------------

ENDING BALANCE, June 30, 2001
(unaudited)                                          6,173,500 $    618 $3,988,989 $(1,115,212) $   8,529 $(3,054,586) $  (171,662)
                                                  ============ ======== ========== ============ ========= ============ ============
</TABLE>














     The accompanying notes are an integral part of the financial statements


                                       F-4

<PAGE>




<TABLE>
<CAPTION>
                            Elva International, Inc.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)


                                                                                        Six Months Ended
                                                                                            June 30,
                                                                              ------------------------------------
                                                                                    2001               2000
                                                                              -----------------    ---------------
<S>                                                                           <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                      $       (734,422)    $     (583,262)
Adjustments to reconcile net loss to net cash used by operating activities:
     Minority interest in consolidated subsidiary income                                      0                  0
     Depreciation                                                                        26,490             17,416
     Amortization of government subsidy                                                (13,676)                  0
     Amortization of deferred compensation                                               48,488                  0
Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                                       (181,083)             33,785
     (Increase) decrease in VAT receivable                                               16,731             20,804
     (Increase) decrease in deposits and other assets                                   (2,461)            (5,478)
     (Increase) decrease in income tax credit receivable                                 84,498                  0
     Increase (decrease) in accounts payable                                             48,411             67,673
     Increase (decrease) accrued expense - trade                                        (4,785)            (8,689)
     Increase (decrease) salaries and payroll taxes                                     120,359             39,214
     Increase (decrease) in deferred revenue                                             94,556                  0
                                                                              -----------------    ---------------

Net cash  provided (used) by operating activities                                     (496,894)          (418,537)
                                                                              -----------------    ---------------

CASH FLOW FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                                (31,791)            (3,204)
     (Increase expenditure) decrease application patent                                       0          (108,890)
                                                                              -----------------    ---------------

Net cash provided (used) by investing activities                                       (31,791)          (112,094)
                                                                              -----------------    ---------------

CASH FLOW FROM FINANCING ACTIVITIES:
     Shareholder advances                                                               158,102            157,965
     Shareholder advance repayments                                                           0                  0
     Receipt of conditional government subsidy                                                0            121,287
     Proceeds of  long term debt - related party                                              0            191,505
     Proceeds from sale of common stock                                                 200,000                  0
     Debt payments                                                                      (2,735)            (3,072)
                                                                              -----------------    ---------------

Net cash provided by financing activities                                               355,367            467,685
                                                                              -----------------    ---------------

Effect of exchange rates on cash                                                         22,650            (6,015)
                                                                              -----------------    ---------------

Net increase (decrease) in cash and equivalents                                       (150,668)           (68,961)

CASH and equivalents, beginning of period                                               300,071             97,476
                                                                              -----------------    ---------------

CASH and equivalents, end of period                                           $         149,403    $        28,515
                                                                              =================    ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest Paid in Cash:                                                        $               0    $        15,943
                                                                              =================    ===============
</TABLE>






     The accompanying notes are an integral part of the financial statements


                                       F-5

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements

                (Information with respect to the six months ended
                      June 30, 2001 and 2000 is unaudited)


(1) Summary of Significant Accounting Principles
     The  Company  Elva,   Inc.,  (the  "Company"),   is  a  Florida   chartered
          corporation  which  conducts  business  from its  offices in West Palm
          Beach, Florida, Danville, California, Paris, France and Singapore. The
          Company  was  incorporated  on August 15,  1997 as  Computer  Research
          Technologies,  Inc., and changed its name to Elva, Inc. on January 25,
          1999, and to Elva  International,  Inc. on March 2, 2001. Prior to the
          acquisition of ELVA, SA, the Company was principally seeking financing
          to  allow  it  to  begin  its  planned  operations.   The  Company  is
          principally involved in the smart card technology industry through its
          French  subsidiary,   ELVA,  SA.  The  following  summarize  the  more
          significant  accounting  and  reporting  policies and practices of the
          Company:

          a)  Use  of  estimates  In  preparing   the   consolidated   financial
          statements,  management is required to make estimates and  assumptions
          that affect the reported  amounts of assets and  liabilities as of the
          date of the  statements  of  financial  condition,  and  revenues  and
          expenses  for  the  year  then  ended.   Actual   results  may  differ
          significantly from those estimates.

          b)  Significant  acquisition  In  December  1998,  Elva,  Inc.  issued
          14,160,000  shares of common  stock to acquire  substantially  all the
          issued  and  outstanding  shares of the  common  stock of ELVA,  SA, a
          French corporation,  in a reverse merger, which was accounted for as a
          reorganization of ELVA, SA. There remains a four-tenths of one percent
          minority  interest  in ELVA,  SA,  which is owned by two of the  major
          stockholders  of Elva,  Inc.  as a result  of this  acquisition.  This
          minority  interest is required under French corporate law. As a result
          of this  reverse  merger,  the  former  stockholders  of ELVA,  SA now
          control  Elva,  Inc.  Prior to this  reverse  merger,  Elva,  Inc. had
          nominal assets and liabilities.  Elva, Inc.  accounted for the reverse
          merger as an  issuance of stock for the net  monetary  assets of Elva,
          Inc. or, in this case, as a capitalization of the accumulated  deficit
          of Elva, Inc. to the date of the merger.

          c) Principles of consolidation The consolidated  financial  statements
          include the accounts of Elva, Inc. and its wholly owned  subsidiaries.
          Inter-company  balances and  transactions  have been  eliminated.  The
          historical  financial  statements of ELVA, SA have been  presented for
          the period prior to the reverse merger.

          d) Net loss per  common  share  Basic  net loss per  weighted  average
          common  share is  computed by  dividing  the net loss by the  weighted
          average number of common shares outstanding during the period.

          e) Property and  equipment  All property and equipment are recorded at
          cost and  depreciated  over their  estimated  useful lives,  using the
          straight-line  method. Upon sale or retirement,  the costs and related
          accumulated   depreciation   are  eliminated  from  their   respective
          accounts, and the resulting gain or loss is included in the results of
          operations.  Repairs and maintenance charges which do not increase the
          useful  lives of the assets are  charged to  operations  as  incurred.
          Depreciation  expense was $16,101 and $7,752 for the six months  ended
          June 30, 2001 and 2000, respectively.

          f) Cash and  equivalents  The company  considers  investments  with an
          initial maturity of three months or less as cash equivalents.

          g) Patents The Company acquired two French patents,  Nos. 95-15735 and
          96-01872, from the founders of ELVA, SA. The Company is amortizing the
          cost of these patents over the remaining life of the patents.  Patents
          in France  have a 20 year life.  Amortization  expense was $10,391 and
          $9,664 for the six months ended June 30, 2001 and 2000, respectively.


                                       F-6

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Principles (Continued)
          h) Revenue  recognition  The Company's sole source of revenue has been
          from licensing its patented  technology.  The Company  records revenue
          when earned  under its  licensing  agreement.  The Company  intends to
          license its  technology to others as well,  rather than to manufacture
          the  VOCALID  cards for sale.  The Company  believes  that it would be
          prohibitively  expensive  for it to  establish  its own  manufacturing
          facilities  and to do so would distract it from its efforts at getting
          its  technology  accepted  as  the  world  standard.  The  Company  is
          negotiating  with an independent  third party to manufacture the cards
          and  the  Company  will  either  sell  them   directly  or  through  a
          distributor network.

          i) Foreign  currency  transaction  and translation  gains(losses)  The
          principal operating entity of the Company is its subsidiary, ELVA, SA,
          which is located in France.  The Company  opened a sales office in Los
          Angeles,  California in April 2000. The  functional  currency of ELVA,
          SA, as well as on a  consolidated  basis,  is the French Franc,  (FF).
          ELVA,  SA has only one customer  which is located in the US. ELVA,  SA
          bills this customer in FF and is paid in US Dollars,  (USD).  ELVA, SA
          records a  transaction  gain or loss at the time of receipt of payment
          consisting of the  difference  between the amount of FF billed and the
          amount of FF the USD  payment is  converted  into.  On a  consolidated
          basis the Company's  reporting  currency is the US Dollar. The Company
          translated the income  statement items using the average exchange rate
          for the  period  and  balance  sheet  items  using  the end of  period
          exchange  rate,  except  for equity  items,  which are  translated  at
          historical rates, in accordance with SFAS 52.

          j) Research & development Research & development expenses are expensed
          in the period incurred.

          k) Software development costs The software developed by the Company is
          used  exclusively by licensors of the Company's  technology.  As such,
          the Company is not selling the software.  Costs incurred in developing
          the software have been expensed in the period in which incurred.

          l) VAT tax  receivable  In  France,  as in many other  countries,  the
          government charges a Value Added Tax, (VAT), that is similar in nature
          to sales tax in the US.  There are three major  differences.  First is
          that VAT is charged at each point of sale. Second is that there are no
          exemptions from the collection of VAT.  Finally,  each company files a
          VAT  return  with the  government  monthly  reflecting  the  gross VAT
          collected  and VAT paid.  If the VAT paid is  greater  than the amount
          collected,   the  Company   receives  a  refund  from  the  government
          approximately five months later.

          m) Interim financial  information The financial statements for the six
          months  ended June 30,  2001 and 2000 are  unaudited  and  include all
          adjustments  which in the opinion of management are necessary for fair
          presentation,  and  such  adjustments  are of a normal  and  recurring
          nature.  The results for the six months are not  indicative  of a full
          year results.

(2)       Stockholders'  Equity The Company has authorized  50,000,000 shares of
          $0.0001 par value  common stock and  10,000,000  shares of $0.0001 par
          value  preferred  stock.  Rights and privileges of the preferred stock
          are to be determined by the Board of Directors prior to issuance.  The
          Company has  6,173,500 and  54,020,000,  shares of common stock issued
          and outstanding at June 30, 2001 and December 31, 2000.

          In September 1997, the Company issued  9,000,000 shares to its founder
          for services  rendered to the Company valued at $9,000. In April 1998,
          the Company  completed a Regulation D Rule 504 Placement for 1,757,376
          shares in  exchange  for  $17,574  cash.  In April  1998,  a  majority
          shareholder  donated  9,000,000 shares of common stock to the Company.
          In June 1998, 9,000,000 shares were issued for $32,500 in cash. During
          the third  quarter of 1998,  the Company  issued  2,700,000  shares of
          common stock for $54,000 in cash. In December 1998,  9,557,376  shares
          were donated to the Company. In December 1998, the Company issued


                                       F-7

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(2)       Stockholders'  Equity (Continued)  14,160,000 shares for 26,326 of the
          26,336  shares  issued  and   outstanding   of  ELVA,   SA,  a  French
          corporation.  Additionally,  in conjunction with this acquisition, the
          Company  issued  3,440,000  shares to a third party in settlement of a
          $204,550  loan the  third  party had made to ELVA,  SA. As the  common
          stock of the  Company was not listed at the date of  acquisition,  the
          fair  value  of  the  stock   issued  to  settle  this  debt  was  not
          determinable   and  the  Company   elected  to  use  the  loan  amount
          outstanding to value this transaction.

          In July 2000, the Company sold  3,490,000  shares of common stock to a
          British Virgin Islands  investment  company in exchange for $1,139,893
          in cash. In July 2000, the Company sold 300,000 shares of common stock
          to an individual  in exchange for $97,985 in cash.  In July 2000,  the
          Company  agreed to  exchange  1,720,000  shares  of  common  stock for
          $557,477 of existing  long-term debt. All three of these  transactions
          were  concluded  at  $0.3266  per  share.  On  October  5,  2000,  the
          stockholders of the Company voted to increase the number of authorized
          shares of common stock from  50,000,000 to 100,000,000  with no change
          in par value.  In  conjunction  with the  increase  in the  authorized
          shares, the Company issued 27,010,000 shares of common stock to effect
          a two for one forward split of the then issued and outstanding shares.

          In June 2001,  the Company  completed a 1 for 10 reverse  split of its
          shares of common stock.  5,402,000  shares were issued and outstanding
          following this action.

          In June 2001,  the Company sold 125,000  shares of  restricted  common
          stock to a company  controlled by the new President of the Company for
          $200,000 in cash, or $1.60 per share.

          In June 2001,  the new  President  of the Company  was issued  646,500
          restricted  common shares as sole  compensation for the four-year term
          of his  employment  agreement.  These  shares were valued at $1.80 per
          share,  or 50% of the then  current  market  price of the stock due to
          size of the block of shares,  the current lack of significant  trading
          volume  and  the  144  restriction  on  the  shares,  or  a  total  of
          $1,163,700.  The Company will amortize this deferred compensation at a
          rate of $72,731 per quarter for the four-year  term of the  employment
          agreement.

(3)       Income Taxes Deferred income taxes (benefits) are provided for certain
          income and expenses which are recognized in different  periods for tax
          and financial reporting  purposes.  The Company had net operating loss
          carry- forwards for income tax purposes of  approximately  $3,055,000,
          which expire  $68,000 on December  31, 2011,  $132,000 on December 31,
          2117,  $232,000 on December 31,  2118,  $724,000 on December 31, 2119,
          $1,164,000 on December 31, 2020 and $734,000 on December 31, 2021. The
          amount  recorded as a deferred  tax asset,  cumulative  as of June 30,
          2001 and 2000 is approximately $1,222,000 and $696,000,  respectively,
          which   represents   the   amount   of  tax   benefits   of  the  loss
          carry-forwards.  The Company has established a valuation allowance for
          this deferred tax asset of $1,222,000 and $696,000, as the Company has
          no history of profitable operations.

     The significant components net deferred tax asset as of June 30, 2001, are:


Net operating losses            $            1,222,000
Valuation allowance                         (1,222,000)
                                ----------------------
Net deferred tax asset          $                    0
                                ======================





                                       F-8

<PAGE>



                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(3)       Income Taxes (Continued) The Company's  subsidiary,  ELVA, SA, applied
          for  research  and  development  income  tax  credits  with the French
          government for the years ended December 31, 2000, 1999, 1998 and 1997.
          The credits are applied for on the Company's  annual income tax return
          in  mid-1998,  1999,  2000 and  2001.  The  amounts  applied  for were
          approximately $104,500,  $94,800,  $15,300 and $94,400 for 2000, 1999,
          1998 and  1997,  respectively.  In the 4th  quarter  of 2000 and 1999,
          ELVA, SA was notified by the French  government of the approval of the
          application  for 1998 and 1997,  and that  payment  by the  government
          would occur in late 2000 and 2001. The Company sold this receivable to
          its bank on a non-recourse  basis,  in exchange for cash in the amount
          of  $87,000  and  $94,400.  The  Company  sold  the  1999  tax  credit
          receivable  to its  bank,  on a  non-recourse  basis,  for cash in the
          amount of  approximately  $84,500.  It is expected that the government
          will  approve the 2000  credit and is expected to be paid in 2003.  In
          1996,  ELVA,  SA  entered  its  technology  in  an  annual  technology
          competition.  This  competition  is  administered  by ANVAR,  a French
          quasi-governmental  agency,  established to reward technology advances
          by French commercial enterprises. Elva received one of the awards from
          ANVAR  for  its  technology.   The  Company  believes,  based  on  the
          foregoing,  that it is more  likely  than not that  the  Company  will
          receive  these ongoing tax credits from the French  government.  These
          credits  reduce  the  income tax  benefit  of its net  operating  loss
          carry-forwards for the French subsidiary on a one for one basis.

(4)       Going  Concern  As shown in the  accompanying  consolidated  financial
          statements,  the Company incurred net losses totaling $734,000 for the
          six  months  ended  June  30,  2001,   negative   working  capital  of
          approximately  $485,000 and  reflects a  stockholders'  deficiency  of
          approximately  $172,000 as of June 30, 2001.  These  conditions  raise
          substantial  doubt as to the  ability of the  Company to continue as a
          going  concern.  The  ability of the  Company to  continue  as a going
          concern is dependent upon  increasing  sales and obtaining  additional
          capital  and   financing.   The  Company  has  retained  a  registered
          broker/dealer  to raise  additional funds for the Company in an amount
          up to  $12,000,000.  The  financial  statements  do  not  include  any
          adjustments  that  might be  necessary  if the  Company  is  unable to
          continue as a going concern.

(5) Related Party Transactions
          (a) Patents The Company acquired two French patents, Nos. 95-15735 and
          96-01872,  from the founders of ELVA,  SA for 21,069  shares of common
          stock of ELVA, SA valued at $320,700,  based on their historical cost,
          and  approximately  $3,333 per month,  for the life of the  patents as
          royalty payments,  beginning in March 1997. These ELVA, SA shares were
          part of the original issue shares of ELVA, SA, and  accordingly had no
          fair market  value at that time.  After  approximately  8 months,  the
          principals  realized  that the  Company  did not have the cash flow to
          continue  to make the  payments  to them and  continue  to develop the
          marketing  efforts and suspended the payments.  In February  1999, the
          Company and the founders entered into a new agreement which called for
          total additional  payment of approximately  $116,700,  with an initial
          payment  of   approximately   $25,000,   and  quarterly   payments  of
          approximately  $11,500,  beginning  on  February  1,  2000.  This  new
          agreement also encompassed the international  patent application filed
          with the World Organization of Intellectual Property,  principally for
          the US, Canada,  Europe and Japan.  It also  encompasses the trademark
          "VOCALID," No. 96-605347, registered at INPI in January 11, 1996.

          (b) Long-term debt In 1998, ELVA, SA received  approximately  $204,500
          from a third party as a loan. In December 1998, as part of the reverse
          merger,  Elva,  Inc.  issued  3,440,000  shares  of  common  stock  in
          settlement  of this debt. In March,  May and September  1999 and March
          and July 2000,  ELVA received  additional  traunches of this loan from
          the now related party, in the total amount of approximately  $650,000.
          In July 2000, the Company entered into an agreement with the holder of
          its  related  party  long-term  debt to exchange  1,720,000  shares of
          common stock for $557,477 of the existing long-term debt, and paid off
          the remaining  balance of  approximately  $90,000 in cash. The Company
          also received a $16,000 conditional loan

                                       F-9

<PAGE>


                            Elva International, Inc.
                   Notes to Consolidated Financial Statements


(5) Related Party Transactions (Continued
          (b) Long-term debt (continued) from an unrelated company,  under which
          the Company  would not be liable for repayment if the Company hired at
          least one former technical employee of the other company.  The Company
          has not done so and is  repaying  this  loan at a rate of  $3,000  per
          year. The repayment schedule is per the original agreement.

          (c) Stockholders' equity In June 2001, the Company sold 125,000 shares
          of  restricted  common  stock  to a  company  controlled  by  the  new
          President of the Company for $200,000 in cash, or $1.60 per share.  In
          June  2001,  the new  President  of the  Company  was  issued  646,500
          restricted  common shares as sole  compensation for the four-year term
          of his  employment  agreement.  These  shares were valued at $1.80 per
          share,  or 50% of the then  current  market  price of the stock due to
          size of the block of shares,  the current lack of significant  trading
          volume  and  the  144  restriction  on  the  shares,  or  a  total  of
          $1,163,700.  The Company will amortize this deferred compensation at a
          rate of $72,731 per quarter for the four-year  term of the  employment
          agreement.

(6)       Commitments  The Company is committed under an operating lease for its
          office space.  The Company is obligated  under this lease for payments
          of $16,600 in 2001.  The Company  can, at its option,  elect to extend
          this lease for up to two additional  three-year  periods.  The Company
          leases its office space in  Danville,  California  and  Singapore on a
          month-to-month  basis.  The Company's  rent expense was  approximately
          $55,500 and $62,250  for the years  ended  December  31, 2000 and 1999
          respectively.

(7)       Concentration  of Customers  The  Company's  sole source of revenue to
          date has been one  customer,  a US  based  company.  Accordingly,  its
          revenue and related accounts  receivable at all periods  presented are
          all  related to this single  source.  The  Company is  endeavoring  to
          expand its customer base.

(8)       Conditional  Government  Subsidies  The Company has  received  several
          government  grants which are  conditional as to repayment.  The grants
          are to be applied as reductions of salaries and employment  taxes paid
          to new  employees.  They are  intended  by the  government  to  induce
          increases in employment,  as France has experienced high  unemployment
          over the last few  years.  To date  the  Company  has been  increasing
          employment  and  applying  accumulated  grants  as  offsets  to salary
          expense  and at  present  is not yet  obligated  to repay any of these
          grants.  The Company does not expect to have to repay any of the grant
          amounts.  These grants,  if required to be repaid,  do not require the
          payment of interest.  The term for adding the required employees under
          these grants is three years.  The Company has amortized  approximately
          $14,000 and $0 of the grants against salary expense for the six months
          ending June 30, 2001 and 2000, respectively.

                                      F-10

<PAGE>



Item 2. Management's Discussion and Analysis or Plan of Operation


Plan of Operations

     The  Company's  plan of  operations  for the next  twelve (12) months is to
continually  refine its strategy for  capitalizing  on recent  trends within the
Smart Card  industry  and to exploit such trends to its  advantage.  The Company
plans to develop new and varied  VocaliD(R)  Smart Card  systems,  concepts  and
ventures. We will also further refine our current VocaliD(R) Smart Card Web site
to make it a more  complete  one stop  information  source to the  industry  and
future clients.

     The Company  believes it can  capitalize on the general  Internet  trend of
increasing  consumer  usage and  increasing  levels of  e-commerce  transactions
through  providing the market the  Company's  VocaliD(R)  Smart Card,  which the
Company  believes will increase  levels of  person-to-person  communication  and
which may directly increase levels of advertising and Web site linkage revenues.
The  Company   believes  that  it  is  well   positioned  to  profit  from  such
opportunities.

     The Company's  business  strategy is to develop its  VocaliD(R)  Smart Card
system to provide  consumers with versatile high quality,  easy to use, personal
and secure communications.  The Company believes the ease of use and versatility
of its online Smart Card system will differentiate itself among the array of off
line smart card options and that this differentiation  strategy will allow it to
carve out a profitable  market niche.  In addition to the primary revenue stream
derived from fees earned  through the usage of the  Company's  VocaliD(R)  Smart
Card, the Company  believes that its market niche will allow it to  successfully
gain consumer "hits" to its VocaliD(R)  Smart Card Web site. Such "hits" are the
major factor in  determining  advertising  revenue  over the  Internet  (through
banner ad sales) and may allow the  Company to  realize  an  additional  revenue
stream through charging  advertising  fees for banner ad placements.  Therefore,
while the Company plans to generate its primary revenue by charging fees for the
use of its  VocaliD(R)  Smart Card  system,  the  Company  believes  it may also
generate  significant  revenue by attracting interest ("hits") to its VocaliD(R)
Smart Card Web site.

     The Company plans to seek out strategic alliances,  joint venture partners,
and business partners with other high-technology firms in which shared resources
could provide enhanced  shareholder value. The Company plans to continually scan
the environment for such partnering opportunities.  Particular attention will be
paid  to the  possibilities  of  developing  international  corporate  strategic
alliances,  partnering with successful U.S.  technology  start-ups,  and finding
merger and acquisition candidates or counter-parties with firms operating in the
U.S. and/or abroad.



                                       13

<PAGE>



Results of Operations -For the Six Months Ending June 30, 2001

Financial Condition, Capital Resources and Liquidity

     For the second  quarter  ended June 30, 2001 and 2000 the Company  recorded
revenues of $288,655 and $191,062,  respectively. The increase of $97,593 is due
to increasing licensing revenue from ATMEL.

     For the second  quarter ended June 30, 2001 and 2000 the Company had salary
expenses of $426,247 and  $339,438,  respectively.  This increase of $86,809 was
due to an increase in the number of personnel  employed by the Company,  and the
amortization of deferred compensation for the new President of the Company.

     For the second  quarter ended June 30, 2001 and 2000,  the Company had on a
consolidated unaudited basis general and administrative expenses of $357,630 and
$220,507, respectively. The increase of $137,123 is due primarily to opening the
new offices in Silicon Valley and Singapore.

     For the second  quarter ended June 30, 2001 and 2000,  the Company had on a
consolidated   unaudited  basis  total  operating  expenses  of  $1,029,365  and
$762,830,  respectively, of which $266,535 of the increase is attributable to an
increase in general and administrative and salaries by the Company.

Net Losses

     For the second quarter ended June 30, 2001 and 2000, the Company reported a
net loss from operations  excluding foreign currency translation of $740,710 and
$571,768, respectively.

     The ability of the Company to continue as a going concern is dependent upon
its ability to obtain clients who will utilize the Company's  VocaliD(R) product
and whether the Company can attract an adequate  number of clients.  The Company
believes  that in order to be able to expand its initial  operations in terms of
sales and marketing,  it must establish new offices in the USA and abroad,  hire
staff and acquire  through  purchase or lease  computer and office  equipment to
maintain  accurate  financial  accounting  and client  data.  In this regard the
Company has established a new United States office in Danville,  California near
the silicon  valley.  The Company is already  registered  with the  Secretary of
State of California to do business and is  anticipating  the  penetration of the
North American market from its California office.

     To implement such plan, also during this initial phase, the Company intends
to initiate a self- directed private  placement under Rule 506 in order to raise
the funds required by its development among which the financial means related to
new staff,  equipment and offices.  The Company  expects to accomplish  its fund
raising objective before December  31,2001.  No underwriters have been contacted
and no known investors have been contacted with respect to such fund raising. In
the event such placement is successful,  the Company  believes that it will have
sufficient  operating  capital to meet the initial expansion goals and operating
costs for a period of one year.

Employees

     Next year,  ELVA intends to hire new employees in North  America,  Asia and
Europe in order to widen its marketing  worldwide and to ensure the evolution of
the technology.

                                       14

<PAGE>



     At June  30,  2001,  ELVA  had a total  of 17  employees,  of  which 6 were
employed in sales and marketing,  6 were employed in product development,  1 was
employed in  professional  services  and  customer  support,  1 was  employed in
internal operations support,  and 3 were employed in administration and finance.
Our future performance depends in significant part upon the continued service of
our key  technical  and  management  personnel,  and our  continuing  ability to
attract and retain highly qualified and motivated  personnel in all areas of our
operations.  Competition for such personnel is intense.  We provide no assurance
that  we can  retain  key  managerial  and  technical  employees  or that we can
attract,  assimilate or retain other highly  qualified  personnel in the future.
Our employees are not  represented by a labor union. We have not experienced any
work stoppages and consider our employee relations to be good.

     The Company  will  attempt to maintain  diversity  within its  customer and
advertising base in order to decrease its exposure to downturns or volatility in
any particular market segment. As part of this selection  strategy,  the Company
intends to offer its services to those  consumers and strategic  partners  which
have  a  reputation  for  reputable  dealings  and,  eliminating  customers  and
advertisers that it believes  present a higher credit risk. Where feasible,  the
Company will evaluate  beforehand each customer,  supplier,  partner,  strategic
partner, and advertiser for their creditworthiness.

Research and Development Plans

     For the next twelve months there is a plan for funding  extensive  research
and development efforts. Our goal is to enhance the technology features in terms
of personalization and security. For that purpose, the chip capabilities and the
software  environment  will both be enlarged  and  improved in order to supply a
more  efficient  access  to the  technology  for  each  end  user  and  for  any
application.

     Other  investments  related  to the  manufacturing  process  are also being
scheduled.  Therefore, the Company foresees significant changes in the number of
employees.

Forward-Looking Statements

     This Form 10-QSB includes  "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act of  1934,  as  amended.  All  statements,  other  than
statements of historical  facts,  included or  incorporated by reference in this
Form 10-QSB which address  activities,  events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures  (including the amount and nature thereof),  finding
suitable merger or acquisition candidates, expansion and growth of the Company's
business and operations, and other such matters are forward-looking  statements.
These  statements  are based on certain  assumptions  and  analyses  made by the
Company in light of its  experience  and its  perception of  historical  trends,
current conditions and expected future  developments as well as other factors it
believes are appropriate in the circumstances.  However,  whether actual results
or developments will conform with the Company's  expectations and predictions is
subject  to a number of risks and  uncertainties,  general  economic  market and
business  conditions;  the business  opportunities (or lack thereof) that may be
presented  to and pursued by the  Company;  changes in laws or  regulation;  and
other   factors,   most  of  which  are  beyond  the  control  of  the  Company.
Consequently, all of the forward-looking statements made in this Form 10-QSB are
qualified by these cautionary  statements and there can be no assurance that the
actual results or  developments  anticipated by the Company will be realized or,
even if substantially  realized, that they will have the expected consequence to
or effects on the Company or its business or operations.  The Company assumes no
obligations to update any such forward-looking statements.

                                       15

<PAGE>



PART II

Item 1. Legal Proceedings.

     The  Company  knows  of no legal  proceedings  to which it is a party or to
which any of its  property  is the  subject  which are  pending,  threatened  or
contemplated or any unsatisfied judgments against the Company.

Item 2. Changes in Securities and Use of Proceeds

     In June 2001,  the Company  completed a 1 for 10 reverse stock split of its
shares of common  stock.  There were  5,402,000  shares  issued and  outstanding
following this action.

     In June 2001, the Company sold 125,000 shares of restricted common stock to
a company controlled by the new President of the Company for $200,000 in cash or
$1.60 per share.

     In  June  2001,  the  new  President  of the  Company  was  issued  646,500
restricted  common shares as sole  compensation  for the  four-year  term of his
employment agreement. These shares were valued at $1.80 per share, or 50% of the
then current  market price of the stock due to size of the block of shares,  the
current  lack of  significant  trading  volume  and the 144  restriction  on the
shares,  or a total of  $1,163,700.  The Company  will  amortize  this  deferred
compensation  at a rate of $72,731  per quarter  for the  four-year  term of the
employment agreement.


Item 3. Defaults in Senior Securities

           None

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

     No matter was submitted,  during the quarter ending June 30, 2001,  covered
by  this  report,  to  a  vote  of  the  Company's  shareholders,   through  the
solicitation of proxies or otherwise.

Item 5. Other Information

     As shown in the accompanying consolidated financial statements, the Company
incurred  net losses  totaling  $734,000 for the six months ended June 30, 2001,
negative working capital of approximately  $485,000 and reflects a stockholders'
deficiency of approximately $172,000 as of June 30, 2001. These conditions raise
substantial  doubt as to the  ability  of the  Company  to  continue  as a going
concern.  The ability of the Company to continue as a going concern is dependent
upon  increasing  sales and  obtaining  additional  capital and  financing.  The
Company has retained a registered  broker/dealer  to raise  additional funds for
the Company in an amount up to  $12,000,000.  The  financial  statements  do not
include  any  adjustments  that might be  necessary  if the Company is unable to
continue as a going concern.

Item 6. Exhibits and Reports on Form 8-K

     (a) The exhibits  required to be filed  herewith by Item 601 of  Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:


                                       16

<PAGE>


<TABLE>
<S>            <C>
Exhibit No.    Description
---------      -----------------------
3(i).1         Articles of Incorporation of ELVA INTERNATIONAL, INC. f/k/a/ ELVA, INC.
               effective August 15, 1997(1)

3(i).2         Amended Articles of Incorporation of ELVA INTERNATIONAL, INC. f/k/a/
               ELVA, INC., filed January 29, 1999.(1)

3(i).3         Amended Articles of Incorporation of ELVA INTERNATIONAL,INC. f/k/a/ ELVA,
               INC., filed November, 2000.(2)

3(i).4         Amended Articles of Incorporation of ELVA INTERNATIONAL,INC. f/k/a/ ELVA,
               INC., filed March, 2001.(2)

3(i).5         Articles of Association of ELVA ASIA PTE LTD effective October 30, 2000.(2)

3(ii).1        Bylaws of ELVA INTERNATIONAL, INC. f/k/a/ ELVA, INC.(1)

10.1           Letter of Intent dated December 19, 1998 between Computer Research Technologies,
               Inc. and ELVA,SA.(1)

10.2           Lease Agreement for California(2).

10.3           Lease Agreement for Asian office for ELVA ASIA PTE LTD(2)

10.4       *   May 1, 2001 Perrot, Ltd., Services Agreement

10.5       *   May 1, 2001 Perrot, Ltd., Supplemental Agreement
</TABLE>

(1)  Incorporated herein by reference to the Company's Registration Statement on
     Form 10-SB.
(2)  Incorporated  herein by reference to the  Company's  Form 10 KSB filed with
     the SEC March 2001.

*    Filed herewith

     (b) No  Reports on Form 8-K were filed  during the  quarter  ended June 30,
2001.



                                       17

<PAGE>




                                   SIGNATURES

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

                                   ELVA, INC.
                                  (Registrant)

Date: August 13, 2001    /s/ Lionel Rotcage
                         -----------------------------------
                         Lionel Rotcage, President & Chairman


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

Date:                 Signature                   Title


August 13, 2001       By: /s/ Serge Parienti
                      ----------------------
                      Serge Parienti              Vice-President,
                                                  Secretary & Director







                                       18

<PAGE>