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

                              FORM 10-QSB

(Mark One)

XX  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
---  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
---  ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______.

                        COMMISSION FILE NUMBER 000-31143
                                               ---------

                                 GAVELLA CORP.
                              ------------------
         (Exact name of business issuer as specified in its charter)

            Delaware                             22-3742159
            --------                             ----------
     (State or other jurisdiction             (IRS Employer
Identification
         of incorporation)                               number)

    215 West Main Street, Maple Shade, New Jersey   08052
    ---------------------------------------------- -------
    (Address of principal executive offices)     (Zip code)

    (856) 667-0600
    --------------
    (Issuer's telephone number)

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  XX      No
    ----         ----

The Company had 2,425,000 shares of common stock, par value $.001
per share,
outstanding as of August 1, 2001.

Transitional Small Business Disclosure Format (Check one): Yes [  ]
 No [XX]


                                 -1-
<PAGE>



             GAVELLA CORP. AND SUBSIDIARY
                      INDEX
                                                            PAGE
PART 1.   FINANCIAL INFORMATION                             ----

      ITEM 1.   FINANCIAL STATEMENTS

                GAVELLA CORP. AND SUBSIDIARY
                ----------------------------

                CONSOLIDATED BALANCE SHEETS AS OF
                JUNE 30, 2001 AND DECEMBER 31, 2000...................3

                CONSOLIDATED STATEMENTS OF OPERATIONS FOR
                THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000...........4

                CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
                THE SIX MONTHS ENDED JUNE 30, 2001 AND
2000...........5-6

                CONSOLIDATED STATEMENT OF CHANGES IN
                STOCKHOLDERS' DEFICIT FOR THE SIX MONTHS
                ENDED JUNE 30, 2001 ..................................7

                NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.............8-10


      ITEM 2.   MANAGEMENT'S DISCUSSION AND
ANALYSIS...................11

PART II.  OTHER
INFORMATION............................................15

               ITEM 6    EXHIBITS AND REPORTS ON FORM
8-K..............16


SIGNATURES.......................................................17



                                 -2-
<PAGE>

                      GAVELLA CORP. AND SUBSIDIARY
                       CONSOLIDATED BALANCE SHEETS
                   JUNE 30, 2001 AND DECEMBER 31, 2000
                               (Unaudited)

                                  ASSETS
                                                 June 30,
December 31,
                            2001         2000
                                               -----------
-----------
Rental property, net                           $ 3,172,072        $
3,219,984
Cash                                               124,138
  91,310
Cash held in escrow                                 72,876
  37,123
Accounts receivable                                 23,188
  15,388
Prepaid expenses                                    37,122
  53,494
Deferred financing costs, net                       53,931
  58,251
                                               -----------
-----------
    Total Assets                               $ 3,483,327        $
3,475,550
                                               ===========
===========


                                LIABILITIES AND DEFICIT


Liabilities
  Mortgage notes payable                        $3,297,504        $
3,317,649
  Notes payable - related party                    225,000
 175,000
  Accrued interest                                  22,719
  41,469
  Accounts payable                                   3,300
   5,130
  Accrued expenses                                  79,317
  22,462
  Security deposits payable                         79,153
  76,965
  Other liabilities                                 22,593
  11,656
                                               -----------
-----------
     Total Liabilities                           3,729,586
3,650,331
                                               -----------
-----------
Minority Interest                                      -0-
     -0-
                                               -----------
-----------

Stockholders' Deficit
 Common stock, $.001 par value,
  5,000,000 and 3,000,000 shares
  authorized, 2,425,000 and 2,000,000
  shares issued and outstanding                      2,425
   2,000
 Additional paid in capital                        308,325
 207,500
 Accumulated deficit                           (   557,009)       (
384,281)
                                               -----------
-----------
   Total stockholders' deficit                 (   246,259)       (
174,781)
                                               -----------
-----------
     Total Liabilities and Deficit              $3,483,327        $
3,475,550
                                               ===========
===========

                                 -3-
<PAGE>

                       GAVELLA CORP. AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                               (Unaudited)

                            2001         2000
                                                 -----------
-----------
Revenues
  Rental real estate                               $ 423,107      $
 416,111
                                                 -----------
-----------
    Total revenues                                   423,107
 416,111

Operating expenses
  Administrative expenses                            121,354
  75,611
  Utilities expense                                   73,860
  48,337
  Operating and maintenance                           57,568
  53,293
  Taxes and insurance                                 65,364
  62,335
  Depreciation and amortization                       62,482
  59,088
                                                 -----------
-----------
     Total operating expenses                        380,627
 298,664
                                                 -----------
-----------
Operating income (loss)                               42,480
 117,447

Other income (expense)
  Interest income                                        935
   1,264
  Interest expense                              (    151,159)  (
154,285)
  Sewer tax assessment                          (     64,984)
      0
                                                 -----------
-----------
      Total other income (expense)              (    215,207)  (
153,021)
                                                 -----------
-----------
Net loss                                        (    172,728)    (
 35,574)
                                                 ===========
===========



Basic net loss per share - pro forma            ($      .09)     ($
    .02)
                                                 ===========
===========

Average number of common shares outstanding -
  Basic - pro forma                                2,007,083
2,000,000
                                                 ===========
===========

                                 -4-
<PAGE>
                       GAVELLA CORP. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                               (Unaudited)

                            2001             2000
                                                 -----------
-----------
Cash flows from operating activities:
  Net loss                                       ($  172,728)
($ 35,574)
  Adjustments to reconcile net loss to net cash
    provided by (used in) operating activities:
    Depreciation and amortization                     62,482
 59,088
    (Increase) decrease in:
      Accounts receivable                        (     7,800)
  7,974
      Prepaid expenses                                16,372
 25,659
      Cash held in escrow                         (   35,753)      (
 23,976)
     Increase (decrease) in:
      Accounts payable                            (    1,830)      (
  7,730)
      Accrued interest                            (   18,750)
    -0-
      Accrued expenses                                56,855
     38
      Other liabilities                               10,937       (
  4,269)
      Security deposits payable                        2,188
  4,362
                                                 -----------
-----------
Net cash provided by
   (used in) operating activities                 (   88,027)
 25,572
                                                 -----------
-----------
Cash flows from investing activities:
  Purchases of property and equipment           (     10,250)    (
17,105)
                                                 -----------
-----------
Net cash used in investing activities           (     10,250)    (
17,105)
                                                 -----------
-----------
Cash flows from financing activities:
  Repayment of mortgage notes payable           (     20,145)    (
 18,553)
  Proceeds from notes payable                         53,000
  5,000
  Payments on notes payable                     (      3,000)    (
  2,258)
  Contributed additional capital                         -0-
  6,000
  Issuance of common stock                           101,250
    -0-
                                                 -----------
-----------
Net cash provided by
 (used in) financing activities                      131,105     (
  9,811)
                                                 -----------
-----------
Net increase (decrease) in cash                       32,828     (
  1,344)

Cash, beginning                                       91,310
 77,275
                                                 -----------
-----------
Cash, ending                                      $  124,138       $
 75,931
                                                 ===========
===========





                                 -5-
<PAGE>


                       GAVELLA CORP. AND SUBSIDIARY
            CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
             FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000

                             (UNAUDITED)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                                 2001          2000

 Cash paid for interest             $169,909             $154,285
                        ========        ========

      Issuance of common stock during the six months ended June 30,
2001 was as follows:

    Issuance of common stock, net of stock
         issuance costs of $5,000         $101,250
                        ========




                                    -6-
<PAGE>


                       GAVELLA CORP. AND SUBSIDIARY
             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001

                                   (UNAUDITED)


<TABLE>
<S>                           <C>         <C>         <C>           <C>
    <C>
                                   Common Stock         Additional
         Total
                                     Issued               Paid-in
Accumulated  Stockholders'
                                Shares     Amount         Capital
Deficit       Deficit

Balance, January 1, 2001       2,000,000  $ 2,000     $ 207,500
$(384,281)   ($174,781)

Issuance of common stock
 net of stock issuance costs     425,000      425       100,825
0      101,250

Net Loss                               0        0             0
(172,728)    (172,728)
                               ---------  -------     ---------
----------     --------
Balance, June 30, 2001         2,425,000  $ 2,425     $ 308,325
$(557,009)   $(246,259)
                               =========  =======     =========
==========     ========

</TABLE>





                                    -7-
<PAGE>

  GAVELLA CORP. AND SUBSIDIARY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE 30, 2001 AND 2000

  (UNAUDITED)
  Note 1 - Organization

        On June 21, 2000, Gavella Corp.  ("Gavella")  was formed
  for the purpose of effectuating a spin-off of the real estate
  operations of APTA Holdings, Inc. ("APTA").   APTA is a
  financial services holding company.  Through its subsidiaries,
  APTA was engaged in two lines of business: owning and operating
  income-producing real estate, and the originating and servicing
  of loans to businesses and consumers, generally secured by real
  estate or other assets.

  On August 7, 2000,  APTA transferred all of the assets and
  liabilities of its 100% wholly owned subsidiary, Spring Village
  Holdings, Inc. to Gavella in exchange for 2,000,000 shares of
  $.001 par value Gavella common stock.   On December 27, 2000,
  the common stock of Gavella was spun off to the common
  shareholders of APTA.  Eligible APTA shareholders of record on
  December 1, 2000 ("Dividend Record Date") received one share of
  Gavella's common stock for each share of APTA's common stock
  held on the Dividend Record Date.  On December 27, 2000,
  2,000,000 shares of $.001 par value Gavella common stock were
  issued to eligible APTA shareholders.

  Note 2 - Summary of Significant Accounting Policies

        The summary of significant accounting policies is included
  in the notes to the consolidated financial statements for the
  years ended December 31, 2000 and 1999 which were audited and
  appear in the Form 10-KSB previously filed by the Company.

  Note 3 - Unaudited Financial Statements

        The consolidated balance sheets as of June 30, 2001 and
  December 31, 2000 and the related consolidated statements of
  operations, and cash flows for the six months ended June 30,
  2001 and 2000, and the related information contained in these
  notes have been prepared by management without audit.  In the
  opinion of management, all accruals (consisting of normal
  recurring accruals) which are necessary for a fair presentation
  of financial position and results of operations for such periods
  have been made.  Results for an interim period should not be
  considered as indicative of results for a full year.

  Note 4 - Basis of Presentation

        The consolidated financial statements for periods prior to
  the spin off include only those assets and liabilities
  contributed by APTA as described above.  These financial
  statements have been prepared using APTA's historical basis of
  the assets and liabilities and the historical results of
  operations and have been prepared in accordance with the rules
  and regulations of the Securities and Exchange Commission
  applicable for subsidiaries which have been spun off.  These
  rules stipulate that statements shall be prepared as if the
  entity had existed prior to the existence of the new company.

                                      -8-
  <PAGE>
  GAVELLA CORP. AND SUBSIDIARY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE 30, 2001 AND 2000

  (UNAUDITED)


  Note 4 - Basis of Presentation (continued)

  Such statements are not those of a real entity, but describe a
  hypothetical "accounting predecessor" to Gavella Corp.  The
  financial statements presented include all the operations of the
  Company as well as the operations of the Company's predecessor
  prior to the spin-off, and have been accounted for in a manner
  similar to that of a pooling of interests.

  In management's opinion, the accompanying consolidated financial
  statements include all common and corporate level expenses which
  would have been incurred on behalf of the accounting predecessor
  by APTA. Management has allocated such expenses based on its
  best estimate of the actual time and effort expended for the
  benefit of Gavella Corp., and believes such allocation to be
  reasonable. Additional corporate overhead expenses of $6,000 for
  the six months ended June 30, 2000 have been allocated to
  Gavella prior to the spin-off and are included in administrative
  expenses in the accompanying consolidated statement of
  operations with the offsetting credit amount reflected as
  contributed additional capital.

  Net loss per Share - Pro Forma

  Basic net loss per share is computed on the basis of the
  weighted average number of shares outstanding each period and
  excludes any dilutive effects of options, warrants, and
  convertible securities.  Dilutive earnings per share is computed
  giving effects to dilutive stock equivalents.  The Company had
  no potential common shares at June 30, 2001 and 2000.

        Net loss per share prior to the spin-off has been computed
  giving effect to the distribution ratio of 1 common share of
  Gavella stock for each common share of APTA.  Accordingly,
  weighted average common shares outstanding for the accounting
  predecessor have been computed based on the hypothetical shares
  outstanding of Gavella Corp. for the respective period.
  Calculated earnings per share may not be representative of
  earnings per share subsequent to the transfer of the assets and
  liabilities from APTA since the level of other expenses incurred
  by Gavella may be higher than was incurred on a historical basis.

  Note 5 - Stockholders' Equity

        On May 30, 2001, the authorized shares of common stock of
  the Company were increased from 3,000,000 shares to 5,000,000
  shares.

                                      -9-
  <PAGE>

  GAVELLA CORP. AND SUBSIDIARY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  JUNE 30, 2001 AND 2000

  (UNAUDITED)


  Note 6 - Other Expense

        During the second quarter ended June 30, 2001, the Company
  was notified by the township that the township had under billed
  for sewer taxes in prior years, and assessed a sewer tax of
  $64,984.  This is a one time assessment, and is reflected as an
  other expense for the six months ended June 30, 2001.

  Note 7 - Related Party Transactions

        During the six months ended June 30, 2001, 300,000 shares
  of common stock were issued to two
  officers/directors/stockholders of the Company at $.25 per share
  for cash of $75,000.

        A summary of related party transactions for the year ended
  December 31, 2000 appears in the Form 10-KSB previously filed by
  the Company and is hereby incorporated by reference.

                                      -10-
  <PAGE>
  ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

  The following discussion and analysis should be read in
  conjunction with the
  Consolidated Financial Statements and Notes thereto appearing
  elsewhere in
  this Form 10-QSB and in the previously filed Form 10-KSB for the
  period ending December 31, 2000.

  General
  -------

  Gavella Corp. ("Gavella" or the "Company") was incorporated on
  June 21, 2000 in the State of Delaware as a wholly owned
  subsidiary of Apta Holdings, Inc. ("Apta").  On August 7, 2000,
  APTA transferred all of the assets and liabilities of its 100%
  wholly owned subsidiary, Spring Village Holdings, Inc. to
  Gavella in exchange for 2,000,000 shares of $.001 par value
  Gavella common stock.  Spring Village Holdings, Inc. owns an 80%
  controlling interest in SVG Properties, L.P., a New Jersey
  limited partnership (the "Partnership").  The Partnership owns a
  124 unit apartment complex.  The transfer of Spring Village
  Holdings, Inc. to Gavella was due to a decision by Apta's Board
  of Directors to separate the finance business and the real
  estate business into two separate corporations.  On December 27,
  2000, each shareholder of Apta received one share of Gavella for
  each share of Apta owned by the shareholders of record as of
  December 1, 2000. The chart below depicts the Company's
  corporate structure:

                           ------------------
                          |   Gavella Corp.  |
                           ------------------
                                  100%
                                   |
                      -----------------------------
                     | Spring Village Holdings, Inc.|
                      -----------------------------
                                   |
                                   |
                                   80%
                         ----------------------
                        | SVG Properties, L.P. |
                         ----------------------


  The following discussion of the business of the Company includes
  the business of Spring Village Holdings, Inc.

  The Company is currently engaged in one line of business; owning
  and operating income producing real estate.

                                      -11-
  <PAGE>
  On December 31, 1995, Spring Village Holdings, Inc. acquired,
  for $50,000, an 80% controlling interest in a 124 unit apartment
  complex located in Sharon Hill, Pennsylvania.  The Partnership
  secured bridge financing to make certain improvements needed to
  refinance the property.  Upon completion of the improvements,
  rents, occupancy and net cash flow increased and the property
  was successfully refinanced on September 19, 1997. Subsequent to
  the refinancing, the Partnership has used its positive operating
  cash flow to reduce debt.

  The consolidated financial statements include the accounts of
  Gavella Corp. and its wholly owned subsidiary, Spring Village
  Holdings, Inc. Spring Village Holdings, Inc. is the sole general
  partner of SVG Properties, L.P.  and completely controls the
  partnership.  Accordingly, the accounts of Spring Village
  Holdings, Inc. include its 80% partnership interest in SVG
  Properties, L.P. (T/A Spring Village Apartments). All
  significant intercompany transactions and accounts have been
  eliminated.

  For financial reporting purposes, the assets, liabilities,
  results of operations and cash flows of the partnership are
  included in the Company's consolidated financial statements.
  The outside investors' limited partnership interests have been
  reflected as minority interests.

  The Company has had a history of losses and as of June 30, 2001
  reported an accumulated deficit of $557,009.  The Company has
  generated a positive cash flow from operations in the last two
  fiscal years.  However, due to unanticipated rising costs and
  one time charges, the Company anticipates a negative cash flow
  from operations in the current fiscal year.  The Company
  projects breakeven cash flow from operations in the fiscal year
  2002.  There can be no assurance that the Company will be
  successful in its efforts to generate sufficient cash flow to
  meet its scheduled debt service or other cash requirements.

  The Company intends to utilize its contacts and business
  expertise to locate   and acquire additional properties,
  primarily apartments, preferably those  that  are undervalued or
  which can be acquired at less than fair value due to  the
  financial difficulties of their owners.  There is no assurance
  that such  properties can be obtained under terms and conditions
  that are favorable to   the Company.

  Results of Operations
  ----------------------

  The following discussion is for the six months ended June 30,
  2001 and  2000, respectively.

  The Company reported total revenues of $423,107 and $416,111 in
  2001 and 2000, respectively, an increase of $6,996 or 2%.
  Occupancy was approximately 95% and 96%, respectively. The lower
  occupancy was offset by a small increase in the average unit
  rental rate resulting in the increase in rental revenue.

  Total operating expenses increased from $298,664 in 2000 to
  $380,627 in 2001, an increase of $81,963 or 27%.

                                      -12-
  <PAGE>
  Administrative expenses increased to $121,354 in 2001 from
  $75,611 in 2000. Most of that increase resulted from increases
  in public company overhead. Utilities increased by $25,523 as a
  result of a significant increase in the price of natural gas and
  sewer fees.  Operating and maintenance expense increased from
  $53,293 in 2000 to $57,568 in 2001.  Taxes and insurance
  increased by $3,029, primarily due to increases in real estate
  taxes.  Depreciation increased by $3,394 to $62,482 in 2001,
  reflecting recent capital improvements being depreciated.
  Operating income decreased from $117,447 in 2000 to $42,480 in
  2001, primarily due to the increases in total expenses discussed
  above, which were only partially offset by higher revenues.

  Net interest expense decreased by $2,797 from $153,021 in 2000
  to $150,224 in 2001.

  The Company was notified by the township that the township had
  under billed for sewer taxes in prior years, and assessed a
  sewer tax of $64,984.  This is a one time assessment, and is
  reflected as an other expense.

  Net loss increased from ($35,574) in 2000 to ($172,728) in 2001.
   Basic net loss per share was ($.02) in 2000 and ($.09) in 2001.

  The Company is taxed as a C-corporation for federal and state
  income tax purposes.  As such, the Company will pay taxes on its
  net income as defined by the Internal Revenue Code.  No tax
  attributes of the Company flow through to the shareholders
  except for the regular taxation of dividends paid, if any.

  Liquidity and Capital Resources
  --------------------------------

  At June 30, 2001, the Company had $50,242 working capital,
  including cash held in escrow for anticipated future expenses.
  As a result of a recent equity offering and a refinancing of
  short term debt, the Company's overall financial position is
  improving.  However, the Company needs additional financing to
  expand its business, to carry out its business plan and to
  reduce debt.

  On January 1, 2000, the Company had $91,310 in cash, exclusive
  of $37,123 in cash held in escrow accounts.

  During the six months ended June 30, 2001, the Company received
  net proceeds of $50,000 from installment notes payable during
  the period.  The Company received $101,250 from the issuance of
  its common stock.  Operations used $88,027.  The Company used
  $10,250 to purchase property and equipment, and reduced mortgage
  debt by $20,145.  The net increase in cash for the period was
  $32,828.  The Company had $124,138 in cash on June 30, 2001,
  exclusive of $72,876 in cash held in escrow accounts.


                                      -13-
  <PAGE>
  The Company has generated a positive cash flow from operations
  in the last two fiscal years.  However, due to unanticipated
  rising costs and one time charges, the Company anticipates a
  negative cash flow from operations in the current fiscal year.
  The Company projects break even cash flow from operations in the
  fiscal year 2002.  The Company believes it has sufficient cash
  on hand to fund its operations for the next twelve months.
  However,  there can be no assurance that the Company will be
  successful in its efforts to generate sufficient cash flow to
  meet its scheduled debt service or other cash requirements.

  The Company's balance sheet is highly leveraged.  The Company
  plans to reduce this leverage through future equity offerings as
  well as by funds generated from operations.  The Company
  believes it can support operations and planned capital
  expenditures for at least twelve months.  Thereafter, the
  Company's continued success will be dependant upon its ability
  to maintain occupancy at 93% or above and to keep operating
  costs under control.

  In the event that the Company's plans change or its assumptions
  change or prove to be inaccurate, the Company may be required to
  seek additional financing sooner than currently anticipated.
  The Company has not identified any potential sources of debt or
  equity financing and there can be no assurance that the Company
  will be able to obtain additional financing if and when needed
  or that, if available, financing will be on terms acceptable to
  the Company.

  Forward Looking Statements
  ---------------------------

  The Company is making this statement in order to satisfy the
  "safe harbor"
  provisions contained in the Private Securities Litigation Reform
  Act of 1995.
  The foregoing discussion includes forward-looking statements
  relating to the
  business of the Company.  Forward-looking statements contained
  herein or in
  other statements made by the Company are made based on
  management's
  expectations and beliefs concerning future events impacting the
  Company and
  are subject to uncertainties and factors relating to the
  Company's operations
  and business environment, all of which are difficult to predict
  and many of
  which are beyond the control of the Company, that could cause
  actual results
  of the Company to differ materially from those matters expressed
  in or implied
  by forward-looking statements.  The Company believes that the
  following
  factors, among others, could affect its future performance and
  cause actual
  results of the Company to differ materially from those expressed
  in or implied
  by forward-looking statements made by or on behalf of the
  Company:  (a) the
  effect of changes in interest rates; (b) the rental rate and
  demand for
  apartment rental units; (c) fluctuations in the costs to operate
  the
  properties owned by the Company; (d) uninsurable risks; (e)
  unexpected losses, and (f) general economic conditions.


                                      -14-

  PART II

  OTHER INFORMATION
  ------------------


  ITEM 1    LEGAL PROCEEDINGS

  NONE


  ITEM 2    CHANGES IN SECURITIES


  Recent Sales of Unregistered Securities
  ---------------------------------------

        The  following  information  sets  forth  certain
  information  for all securities of the Company sold during the
  quarter ending June 30, 2001 without registration under the
  Securities Act of 1933 (the "Securities  Act").  The following
  pertains to each of the transactions:

       .   There were no underwriters involved in any of the
  transactions.

       .   All of the securities issued were restricted common
  stock of the Company, and each of the certificates issued was
  stamped with the following restrictive legend:

  "The shares represented by this certificate have not been
  registered under the Securities Act of 1933.  The shares have
  been acquired for investment and may not be sold, transferred or
  assigned in the absence of an effective registration statement
  for these shares under the Securities Act of 1933 or an opinion
  of the Company's counsel that registration is not required under
  such Act."

       .   No form of advertising or general solicitation was
  utilized in connection with any of the offers or sales of such
  securities.

       .   Redistribution of the common stock was subject to the
  provisions of Rule 144 of the Securities Act.

       .   Each of the offerees were furnished with the
  Registrant's latest Form 10-KSB, Form 10-QSB's for the fiscal
  periods subsequent to the end of the fiscal period, and all
  forms 8-K filed by the Registrant since the end of the fiscal
  period.

       .   Each of the purchasers represented that the purchaser
  was acquiring the securities for the purchaser's own account,
  for investment only, and not with a view toward the resale,
  fractionalization, division or distribution thereof, and
  further, the investors each represented that they had no present
  plans to enter into any contract, undertaking, agreement, or
  arrangement for any such resale, distribution, division or
  fractionalization thereof.

                                      -15-
  <PAGE>

       During June 2001, 125,000 shares of the Company's common
  stock were issued to six investors for consideration of $31,250
  cash, in reliance upon Rule 506 of Regulation D of the
  Securities Act.

       During June 2001, the Company issued to Theodora T.
  Robinson, spouse of Stephen M. Robinson, Vice President,
  Secretary and a director of the Company, 150,000 shares of the
  Company's common stock for the consideration of $37,500 in cash.
   The transaction was effected in reliance upon Rule 4(2) of the
  Securities Act.

       During June 2001, the Company issued to Harry J. Santoro,
  President, Treasurer and a director of the Company, 150,000
  shares of the Company's common stock for consideration of
  $37,500 in cash.  The transaction was effected in reliance upon
  Rule 4(2) of the Securities Act.


  ITEM 3    DEFAULTS ON SENIOR SECURITIES

  NONE


  ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  NONE

  ITEM 5    OTHER INFORMATION

       The Company has been approved by the NASD for quotation on
  the NASD OTC Bulletin Board under the symbol GVLA. Of August 1,
  2001, there were no trades of the Company's common stock, and no
  bid or ask prices have been quoted.

  ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

       (a) Exhibits

           None

       (b) Reports on Form 8-K

           None




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  <PAGE>

                                   SIGNATURES


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


                              GAVELLA CORP.


  Dated: August 8, 2001       /s/ Harry J. Santoro

  ----------------------------------------
                              Harry J. Santoro
                              President, Chief Executive Officer
  and
                              Chief Financial Officer



















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