SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


     (X)  Quarterly  Report  pursuant to Section 13 or l5 (d) of the  Securities
          Exchange Act of 1934 For the quarterly period ended September 30,2000

                                       OR

     ( )  Transition  Report  pursuant to Section 13 or 15 (d) of the Securities
          Exchange Act of 1934

             For the transition period from April 6, 2000 to September 30, 2000

                         Commission File Number: 0-28514
                                                 -------


                      YAPALOT COMMUNICATIONS HOLDINGS INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                       DELAWARE                        98-0160284
                       --------                        ----------
             (State or Other Jurisdiction            (I.R.S. Employer
            Incorporation or Organization)         Identification Number)


             4884 DUFFERIN STREET, UNIT 1, TORONTO, ONTARIO M3H 5S8
             ------------------------------------------------------
                    (Address of Principal Executive Offices)

Issuer's Telephone Number, Including Area Code:                     416-736-8882
                                                                    ------------

                                       N/A
--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)


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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable  date:  16,000,000 shares of Common Stock,
par value $0.001 per share were outstanding as of September 30, 2000.



                                                                              1.

<PAGE>

                                      INDEX




                                                                         PAGE

PART I. FINANCIAL INFORMATION                                              3

  Item 1. Financial Statements                                             3

      Consolidated Balance Sheet as at September 30,2000                   4
      Interim Consolidated Statement of Changes in Shareholders'
         Equity for the period ended September 30,2000                     5
      Interim Consolidated Statement of Operations for the period
         ended September 30,2000                                           6
      Interim Consolidated Statement of Cash Flows for the period
         ended September 30,2000                                           7
      Notes to Interim Consolidated Financial Statements                 8 - 9

  Item 2. Management's Discussion and Analysis or Plan of Operation     11 - 12


PART II. OTHER INFORMATION                                                 12

  Item 3. Certain Relationships and Related Transactions                   12

  Item 4. Description of Securities                                        12

  Item 5. Changes in Auditors'                                             12


                                                                              2.
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS







                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000
                                   (Unaudited)

                            (Stated in U.S. Dollars)




                                                                              3.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEET

                               SEPTEMBER 30, 2000
                            (Stated in U.S. Dollars)

================================================================================


                                                                     (Unaudited)

                                   A S S E T S

CURRENT
    Cash                                                            $   605,277
    Accounts receivable                                                   1,433
    Sales taxes receivable                                               26,176
    Prepaid and deposits                                                  7,427
                                                                    -----------

                                                                    $   640,313

CAPITAL ASSETS (Note 3)                                                 624,446

INCORPORATION COSTS                                                       3,845
                                                                    -----------

                                                                    $ 1,268,604
                                                                    ===========


                              L I A B I L I T I E S

CURRENT
    Accounts payable                                                $   310,326
    Employee withholdings payable                                         4,189
                                                                    -----------

                                                                    $   314,515

SHAREHOLDERS' ADVANCES (Note 4)                                         471,587
                                                                    -----------

                                                                    $   786,102
                                                                    -----------

                              SHAREHOLDERS' EQUITY


SHARE CAPITAL (Note 5)                                              $ 1,016,000

DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE                           (421,823)

CUMULATIVE TRANSLATION ADJUSTMENT                                      (111,675)
                                                                    -----------

                                                                    $   482,502
                                                                    -----------

                                                                    $ 1,268,604
                                                                    ===========

                             See accompanying notes.


                                                                              4.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

        INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                   FROM DATE OF INCORPORATION, APRIL 6, 2000,
                              TO SEPTEMBER 30, 2000
                            (Stated in U.S. Dollars)

<TABLE>
<CAPTION>
===================================================================================================================================
                                                                                                   (Unaudited)
                                                                      Deficit
                                                                    Accumulated     Accumulated
                                                                       During           Other
                                            Common Shares            Development    Comprehensive                   Comprehensive
                                        Number          Amount          Stage            Loss          Total            Loss
                                     ----------------------------------------------------------------------------------------------
<S>                                  <C>             <C>              <C>             <C>            <C>            <C>
ISSUE OF COMMON SHARES               16,000,000      $ 1,016,000      $      -          $    -      $ 1,016,000            -

COMPREHENSIVE LOSS
    NET LOSS                              -               -              (421,823)           -         (421,823)    $  (421,823)

    FOREIGN CURRENCY TRANSLATION
      ADJUSTMENTS                         -               -                  -           (111,675)     (111,675)       (111,675)
                                                                                                                    -----------

COMPREHENSIVE LOSS $                                                                                                $  (533,498)
                                                                                                                    ===========
                                     --------------------------------------------------------------------------

BALANCE - End of period              16,000,000      $ 1,016,000      $  (421,823)     $ (111,675)  $   482,502
                                     ==========================================================================
</TABLE>

                             See accompanying notes.


                                                                              5.


<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

                  INTERIM CONSOLIDATED STATEMENT OF OPERATIONS

                   FROM DATE OF INCORPORATION, APRIL 6, 2000,
                              TO SEPTEMBER 30, 2000
                            (Stated in U.S. Dollars)

================================================================================

                                                                     (Unaudited)

REVENUE                                                            $     17,523
                                                                   ------------
EXPENSES
    Advertising and promotion                                      $    144,485
    Bank charges and interest                                            16,463
    General and office                                                   28,828
    Professional fees                                                    72,499
    Rent                                                                 16,201
    Telephone and communication                                          54,189
    Travel                                                                8,003
    Wages                                                                82,003
    Loss on foreign exchange                                             21,540
    Amortization                                                         34,909
                                                                   ------------

                                                                   $    457,580
                                                                   ------------

NET LOSS                                                           $   (421,823)
                                                                   ============

LOSS PER COMMON SHARE (Note 6)                                     $      (0.03)
                                                                   ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                 16,179,774
                                                                   ============


                             See accompanying notes.



                                                                              6.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

                   FROM DATE OF INCORPORATION, APRIL 6, 2000,
                              TO SEPTEMBER 30, 2000
                            (Stated in U.S. Dollars)

================================================================================

                                                                     (Unaudited)

CASH FROM (USED IN) OPERATIONS

    Net loss                                                        $  (421,823)
    Adjustments to reconcile net loss to net cash
        provided by operating activities:
          Amortization                                                   34,909
    Changes in assets and liabilities relating to operations
        Increase in accounts payable and accrued liabilities            288,337
        Increase in prepaid and sundry assets                            (7,427)
                                                                    -----------

    NET CASH FROM OPERATIONS                                        $  (106,004)
                                                                    -----------

CASH USED IN INVESTING ACTIVITIES

    Purchase of capital assets                                      $  (659,355)
    Incorporation costs paid                                             (3,845)
                                                                    -----------

NET CASH USED IN INVESTING ACTIVITIES                               $  (663,200)
                                                                    -----------

CASH FROM FINANCING ACTIVITIES

    Advances from shareholders                                      $   471,587
    Capital shares issued                                             1,016,000
                                                                    -----------

NET CASH USED IN FINANCING ACTIVITIES                               $ 1,487,587
                                                                    -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                             $  (111,675)
                                                                    -----------

NET INCREASE IN CASH DURING THE PERIOD                              $   606,708

CASH - Beginning of period                                                -
                                                                    -----------

CASH - End of period                                                $   605,277
                                                                    ===========


                             See accompanying notes.


                                                                              7.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000
                                   (Unaudited)
                            (Stated in U.S. Dollars)

================================================================================


The financial  information for the period ended September  30,2000  presented in
this  Form  10-QSB  has  been  prepared  from  accounting   records  of  Yapalot
Communications  Holdings Inc. (the  "Company")  without audit.  The  information
furnished  reflects  all  adjustments  which are, in the opinion of  management,
necessary  for a fair  statement  of the  results of this  interim  period.  The
results of operations for the period ended September 30,2000 are not necessarily
indicative of the results to be expected for a full year.


1.  NATURE OF OPERATIONS

    Yapalot  Communications  Holdings  Inc. a  development  stage  company,  was
    incorporated under the laws of the State of Delaware on April 6,2000 and has
    adopted  a  fiscal  year  end of  December  31.  The  company's  development
    activities  consist of the deployment of Voice Over Internet Protocol (VoIP)
    network   services  around  the  world  as  well  as  developing   different
    communications solutions utilizing VoIP technology.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    a)  Basis of Consolidation
        These interim consolidated  financial statements present the combination
        of the interim financial statements of Yapalot  Communications  Holdings
        Inc., a United States company, and its wholly-owned subsidiary,  Yapalot
        Communications  Inc.,  a  company  incorporated  under  the  laws of the
        Province of Ontario, Canada on March 8,2000.

    b)  Basis of Financial Statements
        These interim  consolidated  financial  statements  are stated in United
        States dollars, the "reporting currency". The consolidated  transactions
        of Yapalot  Communications  Holdings Inc. have been recorded in Canadian
        dollars, the "functional  currency",  and have been restated into United
        States  dollars at the period end exchange rates for balance sheet items
        and the average  exchange  rate for the period for  revenues,  expenses,
        gains and losses.  Translation adjustments to the reporting currency are
        included in equity.

    c)  Capital Assets and Amortization
        Capital  assets  are  carried  at  acquisition   cost  less  accumulated
        amortization.  Amortization is provided annually by the company at rates
        intended to amortize  the assets over their  estimated  useful  lives as
        follows:

           Computer equipment                  -   30%  Declining balance basis
           Computer software                   -  100% Declining balance basis
           Furniture and fixtures              -   20%  Declining balance basis
           Leasehold improvements              -   20%  of cost
           Network communications equipment    -   20%  Declining balances basis

        Where  the  company  determines  that  circumstances  indicate  that the
        carrying  value of certain  capital assets may not be  recoverable,  the
        company's policy is to write the asset down to an estimate of the future
        cash flows expected to result from the use of the asset and its eventual
        disposition.  Such an  impairment  loss will be charged to operations in
        the current year.

    d)  Revenue Recognition
        The  Company  recognizes  revenue  as the  service  is used and  becomes
        billable.


                                                                              8.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                SEPTEMBER 30,2000
                                                             (Unaudited)
                            (Stated in U.S. Dollars)

================================================================================

    e)  Estimates
        The  preparation  of financial  statements in conformity  with generally
        accepted accounting  princiles requires management to make estimates and
        assumptions  that affect the reported  amounts of assets and liabilities
        and revenues and expenses  during the reporting  period.  Actual results
        could differ from those estimates.

    f)  Start-up and Other Pre-operating Expenses
        Start-up and pre-operating expenses incurred by the Company are expensed
        as incurred.

    g)  Comprehensive Income
        In June 1997, the Financial  Accounting  Standards Board ("FASB") issued
        SFAS No. 130, "Reporting Comprehensive Income", which was adopted by the
        Company. SFAS No. 130 establishes standards for reporting and display of
        comprehensive  income  and  its  components  in  an  entity's  financial
        statements.  Comprehensive  income as defined  includes  all  changes in
        equity (net assets) during a period from non-owner sources.

    h)  Earnings (Loss) Per Share
        Earnings (loss) per common share is based on the weighted average number
        of common shares outstanding during the period.

    i)  General
        These financial  statements have been prepared in accordance with Unites
        States generally accepted  accounting  principles (GAAP), as they relate
        to these financial statements.


3.  CAPITAL ASSETS
                                                   ACCUMULATED           NET
                                         COST     AMORTIZATION          2000
                                     ------------------------------------------
    Computer equipment               $  123,897      $   9,292      $   114,605
    Computer software                    27,760          6,940           20,820
    Furniture and fixtures               67,247            630           66,617
    Leasehold improvements               65,618            822           64,796
    Network communication equipment     374,833         17,225          357,608
                                     ------------------------------------------

                                     $  659,355      $  34,909      $   624,446
                                     ==========================================


4.  SHAREHOLDERS' ADVANCES

    The  balances  due to  shareholders  are  non-interest  bearing , however in
    accordance with generally accepted accounting policies,  an interest rate of
    7% was imputed in this non arms length arrangement.  The imputed interest is
    charged to operations and credited to shareholders' advances.


                                                                              9.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                          (A DEVELOPMENT STAGE COMPANY)

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                SEPTEMBER 30,2000
                                                            (Unaudited)
                            (Stated in U.S. Dollars)

================================================================================

5.  SHARE CAPITAL

    Authorized
          50,000,000   Common shares at $.001 par value
    Issued
          20,000,000   Common shares                             $    1,016,000
                                                                 ==============


6.  LOSS PER COMMON SHARE

    Loss per common share is  calculated  as the loss for the period  divided by
    the weighted  average  number of the  Company's  common  stock  outstanding.
    Diluted loss per share does not differ from basic loss per share.




                                                                             10.
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

    The  information  contained  in this  Item 2,  Management's  Discussion  and
    Analysis or Plan of Operation,  contains "forward looking statements" within
    the meaning of Section 27A of the  Securities  Act of 1933,  as amended (the
    "Securities  Act"), and Section 21E of the Securities  Exchange Act of 1934,
    as amended (the "Exchange Act").  Actual results may materially  differ from
    those  projected in the forward  looking  statements  as a result of certain
    risks  and  uncertainties  set  forth in this  report.  Although  management
    believes that the assumptions made and expectations reflected in the forward
    looking statements are reasonable, there is no assurance that the underlying
    assumptions will, in fact, prove to be correct or that actual future results
    will not be different from the expectations expressed in this report.

    Through  its  wholly-owned  subsidiary,  Yapalot  Communications  Inc.,  the
    Company   is   creating   and   marketing   a   global   Internet   Protocol
    telecommunications  network.  By the end of fiscal  year 2000,  the  company
    anticipates  completing the launch of ten initial  gateways,  plus beginning
    the launch of an  additional  22  gateways.  The ten initial  gateways  were
    financed using the private funds of our founding  shareholders.  The Company
    believes that it will generate sufficient positive cash flow from operations
    to meet operating  requirements and the purchase of the 22 gateways over the
    next 12 months.  If the Company does not generate  sufficient  positive cash
    flow to meet cash  requirements,  it may,  from time to time,  seek to raise
    capital  from  additional  sources,  including  setting  up lines of credit,
    project specific financings and public or private debt or equity financings.
    However,  there can be no assurance  that the Company will be able to obtain
    any sort of  financing  on  commercially  acceptable  terms,  if at all.  To
    achieve the Company's business plan, it has built a customer service team of
    12  full  time  employees  and  20  full  time  employees  in the  areas  of
    administration, marketing and sales.

    The Company is a holding  company and has no independent  operating  history
    other than  Yapalot  Communications.  Inc.  Expenses  for the  period  ended
    September 30,2000 represent consolidated costs since inception.

COMPARISON  OF THE PERIOD  ENDED  SEPTEMBER  30,2000  TO THE  PERIOD  ENDED JUNE
30,2000.

    During the period ended  September  30,2000 the Company  completed  contract
    negotiations with its major Network equipment supplier, Clarent Corporation,
    based in  Redwood  City,  California.  The  company  also took  delivery  of
    hardware for the Montreal,  Vancouver,  Toronto,  Hong Kong and Israel,  New
    York City,  Miami,  Italy, and Greece gateways.  Under terms of the supplier
    agreement, initial deposits of 25% were paid to Clarent Corporation,  with a
    portion  of the  balance  due in  each  of  February  2000.  This  financial
    information reflects the initial deposits paid on these two latter gateways.
    During this period the Company also completed most of the renovations of its
    offices and the acquisition of furniture and equipment  workstations for the
    Company's employees.

RESULTS OF OPERATIONS

    During this quarter ended September 30,2000 the Company commenced generating
    revenues, as reflected in these financial statements.

LIQUIDITY AND CAPITAL RESOURCES

    The primary  sources of  liquidity  for the Company are funds  generated  by
    loans from the founding  shareholders.  Additional  information  on the loan
    agreement  is  described  in note 4 to the  Company's  Interim  Consolidated
    Financial Statements set forth in Part II hereto.

    Current assets totaled $640,313 at September 30,2000 compared to $602,799 at
    June 30,2000.  The increase is attributable to additional hardware equipment
    purchased for the New York and Miami gateways, as well as additional prepaid
    Canadian  Goods  and  Services  Taxes  refundable  to  the  corporation.  At
    September  30,2000  the  Company  had cash but no  short-term  deposits.  As
    operating  activities  had just  begun,  there  were only a small  amount of
    Accounts Receivable on hand at September 30, 2000.


                                                                             11.
<PAGE>

    As at September 30,2000,  current  liabilities  totaled $314,515 compared to
    $396,113 at June  30,2000.  The  decrease is  attributable  to the  payments
    having begun against  current  supplier  balances,  under initial  financing
    terms on the gateway hardware received by the company.

    The Company's  operations are carried out in Canadian dollars. The company's
    reporting currency is in Unites States dollars. As indicated in the notes to
    this  financial  information,  any  translation  adjustment to the reporting
    currency would be included in equity.

    During the period ended September  30,2000 the company conducted an offering
    pursuant  to  Regulation  D,  Rule 504 of the  Securities  Act of  1933,  as
    amended,  of 4,000,000  shares of common stock at $0.25 to raise  $1,000,000
    for working capital.


                                     PART II

                                OTHER INFORMATION

ITEM 3. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    Yapalot  Communications  Inc. currently has two outstanding loans to its two
    founders:  Yuval Barzakay $168,000 and Marilyn Benlolo $303,000.  Both loans
    are interest free and the funds were used to finance Yapalot  Communications
    Inc. since its inception in March 2000. Both loans are for a term of no less
    than one year and are payable after one year or when revenues  reach a level
    in which the loans can be repaid. They are non-interesting bearing loans.

ITEM 4. DESCRIPTION OF SECURITIES

    The Company has  authorized  50,000,000  shares of common  stock,  $.001 par
    value per share.  As of  September  30,2000,  there were  16,000,000  shares
    issued and  outstanding.  All shares are of the same class and have the same
    rights,  preferences  and  limitations.  Holders of shares are  entitled  to
    receive  dividends  in cash,  property or shares when and if  dividends  are
    declared by the Board of Directors out of funds legally available therefore.
    The By-Laws impose no limitations on the payment of dividends.  A quorum for
    any  meeting  of  shareholders  is a  majority  of shares  then  issued  and
    outstanding  and entitled to be voted at the meeting.  Holders of shares are
    entitled to one vote per share. Upon liquidation,  dissolution or winding up
    of the  business  of the  Company,  any assets  will be  distributed  to the
    holders of shares  after  payment  or  provision  for  payment of all debts,
    obligations or liabilities of the Company.  There are no preemptive  rights,
    subscription  rights,  or redemption  provisions  relating to the shares and
    none of the shares carries any liability for further calls.

ITEM 5. CHANGES IN AUDITORS

    During the period ended September  30,2000 the Company  retained the firm of
    Weisbrod Goldmacher,  LLP., Chartered  Accountants as its new auditors.  All
    figures  in  this  financial  information  has  been  reviewed  by  Weisbrod
    Goldmacher,  LLP., in anticipation of their Auditors' Report to be expressed
    on the Company's  financial  statements  for the fiscal year ended  December
    31,2000.



                                                                             12.

<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.


                                         YAPALOT COMMUNICATIONS HOLDINGS INC.






Dated: November 13, 2000                     By  /s/ Yuval Barzakay
                                                -------------------------------
                                                   Yuval Barzakay, Chairman and
                                                   Chief Executive Officer






                                                                             13.