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 30,2001

                                       OR

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

                         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:  20,000,000 shares of Common Stock,
par value $0.001 per share were outstanding as of November 19, 2001.

<PAGE>

                                      INDEX


                                                                          PAGE
                                                                         -------

Part I. FINANCIAL INFORMATION                                                 3

  Item 1.  Financial Statements                                               3

    Consolidated Balance Sheet as of September 30, 2001                       4

    Interim Consolidated Statement of Operations for the period
    ended September 30, 2001 and from date of inception to September
    30, 2000                                                                  5

    Interim Consolidated Statement of Changes in Shareholders'
    Equity for the nine month period ended September 2001
    and from date of inception to December 31, 2000                           6

    Interim Consolidated Statement of Cash Flows for the period ended
    September 30, 2000  and from date of inception to September 30, 2000      7

    Notes to Interim Consolidated Financial Statements                    8 - 9

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

Part II.  Other Information

  Item 5. Other Information                                                  12



<PAGE>

                          PART I. FINANCIAL INFORMATION


Item 1. Financial Statements

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                           CONSOLIDATED BALANCE SHEET

                                   (Unaudited)
                            (Stated in U.S. Dollars)
<TABLE>

                                                               September 30    December 31
                                                                   2001           2000
                                                               -------------   ------------
<S>                                                       <C>                  <C>

                                   A S S E T S

 CURRENT
    Cash                                                   $       2,536    $       151,835
    Accounts receivable                                           49,618              1,248
    Sales taxes receivable                                             -             27,574
    Due from shareholder (Note 4)                                 30,459             24,408
    Prepaid and sundry                                             9,687                  -
                                                           -------------    ---------------

                                                           $      92,300    $       205,065

 CAPITAL ASSETS (Note 3)                                         862,686          1,060,173
                                                           -------------    ---------------


                                                           $      954986    $    $1,265,238
                                                           =============    ===============

                              L I A B I L I T I E S

 CURRENT
    Accounts payable and accrued liabilities               $     781,933    $       599,603
    Current portion of bank term loan (Note 4)                    34,479             34,479
                                                           -------------    ---------------

                                                           $     816,412    $       634,082

 BANK TERM LOAN, Less current portion (Note 4)                    79,267            133,739

 SHAREHOLDERS' ADVANCES (Note 5)                                 301,111            301,111
                                                           -------------    ---------------

                                                           $   1,196,790    $     1,068,932
                                                           -------------    ---------------

                              SHAREHOLDERS' DEFICIT

 SHARE CAPITAL ISSUED AND PAID UP (Note 6)                 $      20,000    $        20,000
 CAPITAL IN EXCESS OF PAR VALUE                                1,033,806          1,016,983
 CUMULATIVE TRANSLATION ADJUSTMENT                               (37,989)           (41,462)
 DEFICIT                                                      (1,257,621)          (799,215)
                                                           -------------    ---------------

                                                           $    (241,804)    $      196,306
                                                           -------------    ---------------

                                                           $     954,986    $     1,265,238
                                                           =============    ===============
</TABLE>

                                       3
<PAGE>



                      YAPALOT COMMUNICATIONS HOLDINGS INC.
            INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT

                                  (Unaudited)
                            (Stated in U.S. Dollars)
<TABLE>

                                                                            For the Period Ended
                                                                      September 30    September 30
                                                                          2001           2000
                                                                      -------------   -------------
<S>                                                                   <C>             <C>



 REVENUE                                                            $     660,706    $     17,523
                                                                    -------------    ---------------


 EXPENSES
    Selling, general and administrative expenses                    $     862,273    $    406,208
    Bank charges and interest                                              28,887          16,463
    Amortization                                                          227,952          34,909
                                                                    -------------    ---------------

                                                                    $   1,119,112    $    457,580
                                                                    -------------    ---------------


 NET LOSS                                                           $   (458,406)    $   (421,823)
                                                                    -------------    ---------------


 OTHER COMPREHENSIVE INCOME
    Foreign currency translation adjustment                         $       3,473    $         -
                                                                    -------------    ---------------


 DEFICIT - Beginning of period                                      $   (799,215)    $         -

 NET LOSS FOR THE PERIOD                                                (458,406)       (421,823)
                                                                    -------------    ---------------

 DEFICIT - End of period                                            $ (1,257,621)    $  (421,823)
                                                                    =============    ===============



 LOSS PER COMMON SHARE (Note 7)                                     $      (0.02)    $     (0.03)
                                                                    =============    ===============

 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                  20,000,000     16,179,774
                                                                    =============    ===============

</TABLE>
                            See accompanying notes.
                                       4
<PAGE>



                      YAPALOT COMMUNICATIONS HOLDINGS INC.
        INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                  (Unaudited)
                            (Stated in U.S. Dollars)



<TABLE>
                                                                                                      Accumulated
                                                Common Shares          Capital in                         Other
                                                          Paid Up      Excess of      Accumulated    Comprehensive
                                            Number        Amount       Par Value        Deficit          Loss            Total
                                           --------      ---------    ------------   -------------  ---------------    ----------
<S>                                        <C>           <C>          <C>            <C>            <C>                 <C>

FROM INCEPTION TO DECEMBER 31, 2000

  ISSUE OF COMMON SHARES
    Founder shares issued at inception    16,000,000    $  16,000             -         $     -         $     -        $   16,000
    Shares issued in August,2000           4,000,000        4,000       996,000               -               -         1,000,000

  Net loss                                         -            -             -        (799,215)              -          (799,215)

  Foreign currency translation adjustments         -            -             -               -         (41,462)          (41,462)
  Imputed interest on shareholder loans                                  20,983                                            20,983

BALANCE - December 31, 2000               20,000,000    $  20,000     1,016,983       $(799,215)       $(41,462)       $  196,306


FROM JANUARY 1, 2001 TO September 30, 2001

  Net loss                                         -            -             -        (458,408)              -          (458,406)

  Foreign currency translation adjustments         -            -             -               -           3,473             3,473
  Imputed interest on shareholder loans                                  16,823                                            16,823

BALANCE - September 30, 2001              20,000,000    $  20,000     1,033,806     $(1,257,621)   $    (37,989)       $ (241,804)

</TABLE>

                             See accompanying notes.
                                        5
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

                                  (Unaudited)
                            (Stated in U.S. Dollars)
<TABLE>

                                                                    For the Period Ended
                                                             September 30         September 30
                                                                  2001                2000
                                                             --------------      --------------
<S>                                                          <C>                 <C>

CASH FROM (USED IN) OPERATIONS

    Net loss                                                   $  (458,406)    $     (421,823)
    Adjustments to reconcile net loss to net cash provided
    by operating activities:
        Amortization                                                227,952            34,909
        Non-cash imputed interest                                    16,823                 -
    Changes in assets and liabilities relating to operations
        Accounts receivable                                        (48,370)                 -
        Accounts payable and accrued liabilities                    182,330           288,337
        Prepaid and sundry assets                                    17,887            (7,427)
                                                               ------------    ---------------

    NET CASH FROM (USED IN) OPERATIONS                         $   (61,784)    $      106,004
                                                               ------------    ---------------


 CASH USED IN INVESTING ACTIVITIES

    Purchase of capital assets                                 $   (30,465)    $     (659,355)
    Incorporation costs paid                                             -             (3,845)
                                                               ------------    ---------------

    NET CASH USED IN INVESTING ACTIVITIES                      $   (30,465)    $     (663,200)
                                                               ------------    ---------------


 CASH FROM FINANCING ACTIVITIES

    Advances from shareholders                                 $        -     $       471,587
    Loan proceeds                                                 (54,472)
    Amounts due from shareholder                                   (6,051)                  -
    Capital shares issued                                               -           1,016,000
                                                               ------------    ---------------

    NET CASH FROM (USED IN) FINANCING ACTIVITIES               $  (60,523)    $     1,487,587
                                                               ------------    ---------------


 EFFECT OF EXCHANGE RATE CHANGES ON CASH                       $    3,473     $      (111,675)
                                                               ------------    ---------------



 NET INCREASE (DECREASE) IN CASH DURING THE PERIOD             $ (149,299)    $       606,708


 CASH - Beginning of period                                       151,835                   -
                                                               ------------    ---------------


 CASH - End of period                                          $   2,536      $       605,277
                                                               ============    ===============
</TABLE>

                                       6
<PAGE>


                      YAPALOT COMMUNICATIONS HOLDINGS INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                SEPTEMBER 30,2001
                                  (Unaudited)
                            (Stated in U.S. Dollars)


The financial  information  for the period ended September 30, 2001 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,  2001  are  not
necessarily indicative of the results to be expected for a full year.


1.  NATURE OF OPERATIONS

    Yapalot Communications  Holdings Inc. 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  activities  consist  of the  development  and
    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 records its revenue from customer  contracts as services are
provided.

                                       7
<PAGE>


                      YAPALOT COMMUNICATIONS HOLDINGS INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                SEPTEMBER 30,2001
                                  (Unaudited)
                            (Stated in U.S. Dollars)


    e)  Estimates
        The  preparation  of financial  statements in conformity  with generally
        accepted accounting principles 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        Net
                                       Cost    Amortization    2001       2000
                                      ------  --------------  ------     ------

    Computer equipment             $ 146,919     $41,774     $105,145  $ 139,835
    Computer software                 72,867      53,104       19,763     52,355
    Furniture and fixtures            67,152      12,931       54,221     63,417
    Leasehold improvements            71,000      14,518       56,482     66,434
    Network communication equipment  852,893     225,818      627,075    738,132


                                  $1,210,831    $348,145    $ 862,686 $1,060,173


4.  BANK TERM LOAN

    One of the  founding  shareholders,  Mr.  Barzakay,  arranged for a Canadian
    Small Business Loan for the Company,  as part of his initial  advance to the
    Company. As the Company is liable for the debt and interest repayments,  the
    loan facility has been reflected as long term debt of the Company.  However,
    as part of the intial funding  agreement with the Company,  Mr. Barzakay has
    agreed to  reimburse  the Company  annually for all  principal  and interest
    payments.  The loan is  repayable  in monthly  payments  of  CDN$4,165  plus
    interest at the Royal Bank prime rate plus 1.5 percent.  The loan matures in
    March,2005 and is personally guaranteed by Mr. Barzakay. The moneys that are
    to be  reimbursed  to the  Company  are  included  in the  amount due from a
    shareholder. This balance is being offset with salary amounts that have been
    accrued toward Mr. Barzakay in connection with his employment agreement with
    the Company.
                                       8
<PAGE>

5.  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 stockholders'  equity.  The individual
    shareholder advance amounts are as follows:

      Marilyn Benlolo                                            $  301,111
                                                                  ===========


6.  SHARE CAPITAL

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


7.  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.
                                       9
<PAGE>


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

This report contains statements that are not historical facts which are "forward
looking  statements"  within the meaning of Section 27A of the Securities Act of
1933, as amended and Section 21E of the  Securities and Exchange Act of 1934, as
amended.  The Company's results involve risks and uncertainties that could cause
actual to differ from projected  results.  Such statements  address  activities;
events or developments that we expect,  believe,  project,  intend or anticipate
will  or  may  occur,  including  such  matters  as  future  capital,   business
strategies,  expansion and growth of our  operations  and future net cash flows.
Factors  that could cause  actual  results to differ  materially  are  described
throughout this statement. Cautionary disclosures include, among others: general
economic  conditions,  the markets  for and market  price of our  services,  the
strength and  financial  resources of our  competitors,  our ability to find and
retain  skilled  personnel,  the results of  financing  efforts  and  regulatory
developments and compliance.  We disclaim any obligation to update or revise any
forward-looking statement to reflect events or circumstances occurring hereafter
or to reflect the occurrence of anticipated or unanticipated  events, other than
as required by law.

Overview

We are a Voice Over IP  telecommunications  Company whose objective is to create
shareholder value by developing  operations and proprietary assets that generate
sustainable revenues and which yield long-term growth potential.  Our operations
are located primarily in North America.


During  the next few  years,  we expect to  continue  to  implement  our  growth
strategy.  Our growth  strategy  includes  a global  deployment  of the  Yapalot
Network  through  the  following:  (i) allow us to gain  strategic  position  by
deploying  Network Gateways in different parts of the world,  (ii) improve asset
productivity,  and (iii) improve growth potential in both emerging  technologies
and key targeted vertical market sectors.  To increase market share, we may also
attempt to acquire key  competitors,  as well as  companies  and assets that may
have important products and synergies with our existing operations and products.
Previous  filings  have talked about a franchise  program.  This program has not
materialized and as such the services of Michael Seruya were not utilized.

Significant Developments

For the fiscal  period ended  September 30, 2001, we completed the launch of ten
initial  gateways  at a cost of  $1,000,000.  We have  delayed the launch of the
previously  proposed  22  additional  gateways  pending  adequate  financing  of
approximately  $2,500,000.  The ten initial  gateways  were  financed  using the
private  funds of our founding  shareholders.  We believe that we will  generate
sufficient  positive cash flow from  operations to meet operating  requirements.
This belief is founded on our current customer base revenue stream.  Yapalot may
acquire Clarent  equipment at reduced prices and favorable  installment  payment
terms on each Gateway, which will allow for future development.

Management  has also put plans into  effect to  significantly  build the current
monthly  customer  acquisition  base to  approximately  700.  This growth is not
expected to  materialize  until Q2 2002.  The customer  growth is expected to be
accomplished  through a planned increase in advertising  expenditures in the 1st
quarter,  as well as a hiring  program  for  additional  staff.  The Company had
entered into a merger  agreement  with Internet VIP but as of November 13, 2001,
management  of  Internet  VIP has decided  not to proceed  with the  merger.  If
Yapalot  does  not  generate   sufficient   positive  cash  flow  to  meet  cash
requirements,  we 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 we will be able to obtain any sort of financing on commercially  acceptable
terms, if at all. 10
<PAGE>

We are a holding  Company and have no independent  operating  history other than
through Yapalot Communications. Inc.

COMPARISON OF THE PERIOD ENDED  SEPTEMBER 30, 2001 TO THE PERIOD ENDED SEPTEMBER
30, 2000.

During the nine months ended  September  30,  2001,  we  maintained  our current
customer base. No additional  gateways were installed  during this time.  During
the nine months ended September 30, 2001, we increased our customer contracts by
1,056  subscribers.  There are no print or media  marketing  initiatives at this
time, except a small  telemarketing  initiative to maintain customer loyalty and
acquire new  customers.  Staffing  remains  unchanged  from Q1 2001. Our Q1 cost
cutting  initiative  is working to allow the  Company to  maintain  its  present
operations  while the  Company is seeking  financing.  While the  Company  seeks
additional  financing,  only payables integral to maintaining network operations
and customer satisfaction are being addressed.  The cost cutting initiative that
started in Q1 2001 is coherent with current  market trends of reducing  overhead
and  streamlining  operations  towards  faster  profitability.  Many of  today's
start-up  companies  are faced with the hard  reality  that  investment  banking
financing  and  VC  financing  is a lot  more  difficult  to  come  by as  these
institutions  are more  reluctant to invest as they have seen the NASDAQ and the
DOW  decline so  sharply.  Institutions  are  listening  to  companies  that can
demonstrate that they have the resolve to reduce costs,  streamline  operations,
and show a road to profitability sooner rather than later.

RESULTS OF OPERATIONS

For the 9 months ended September 30, 2001: During the period ended September 30,
2001,  we increased  our revenue  activities,  signing  customers to  contracted
revenues  amounting to $660,706.  Our resulting loss for this period of $458,406
reflects a nominal decrease in various corporate expenses in the period compared
with the prior periods,  as operations  continue to roll out. This period's loss
is largely a result of anticipated  costs from  professional  advisors due to an
increase in the need for contract and agreement  reviews and the ongoing cost of
utilizing the network systems in this period.

For the cumulative 18 months ended September 30, 2001

Our cumulative net loss of $1,257,621  for the eighteen  months ended  September
30, 2001 is largely a result of  anticipated  costs of $400,260 from the initial
advertising program, as well the development of a significant  proportion of our
planned  staffing level,  resulting in  administration  and sales wages paid out
during  this  cumulative  period  of  $505,457.  The net  loss  for the  current
cumulative  period also reflects the  accumulated  cost of  professional  legal,
accounting  and other  services  required to ensure our  ongoing  organizational
development  meets  the  needs of our  current  and  projected  operations.  The
accumulated  amortization  cost of capital assets of $348,145 also  represents a
significant charge against revenues, due to the cumulative  installation cost of
our gateways.  Most other expenses have developed  rather  normally  during this
period, considering our increased infrastructure  requirements as we continue to
develop our client base and resulting operating costs.

LIQUIDITY AND CAPITAL RESOURCES

Our primary  sources of liquidity are funds generated by loans from the founding
shareholders.  Additional information on the loan agreement is described in note
4 to the Company's  Consolidated  Financial  Statements.

Current  assets  totaled  $92,300 at September  30, 2001 compared to $205,065 at
December  31,  2000.  The  decrease  in current  assets is  attributable  to the
utilization of cash for additional  payments on gateway  purchases,  maintaining
our  infrastructure  as the business  develops,  and our acquisition of customer
service  contracts to be collected over the current operating cycle. The current
assets are  increased  in the period by prepaid  rental  payments and by the net
servicing  of the  Small  Business  Loan  owed by the  Company,  which  had been
arranged by Yuval  Barzakay.  Pursuant to his  agreement  with the Company,  Mr.
Barzakay is responsible  for the principal and interest  repayments.  During the
nine months ended  September 30, 2001,  approximately  $96,150 of accrued salary
owed to Mr. Barzakay was applied  against the principal and interest  repayments
owed by Mr.  Barzakay in connection  with the Small  Business Loan. At September
30, 2001, we had cash of $2,536 and no short-term deposits. As customers pay for
the  service  by  automatic  credit  card  payments,  we  anticipate  an orderly
collection of the balance of Accounts Receivable.

                                       11
<PAGE>

As of September  30, 2001,  current  liabilities  totaled  $816,412  compared to
$634,082 at December 31, 2000. The increase is largely attributable to a reduced
level of payments  against  balances owing under the initial  financing terms on
the gateway hardware received by us and from an increase in recent  professional
fees as a result of the  increasing  amount of  contracts  and  agreements  that
require legal scrutiny.

Our operations are carried out in Canadian dollars. Our reporting currency is in
United States dollars. As indicated in the notes to this financial  information,
any  translation  adjustment  to the  reporting  currency  would be  included in
equity.

                           PART II. OTHER INFORMATION

Item 5. Other Information

The Company had entered  into a merger  agreement  with  Internet  VIP but as of
November  13, 2001,  management  of Internet VIP has decided not to proceed with
the merger.



                                   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 19, 2001

                                       By  /s/ Yuval Barzakay
                                          --------------------------------------
                                               Yuval Barzakay, Chairman and
                                               Chief Executive Officer


                                       12