SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-QSB/A
                                Amendment No. 2

(X)  Quarterly  Report  pursuant  to  Section  13 or l5 (d)  of  the  Securities
     Exchange Act of 1934


                  For the quarterly period ended March 31, 2001

                                       OR

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

        For the transition period from January 1, 2001 to March 31, 2001

                         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 September 12, 2001.


<PAGE>
                                      INDEX


                                                                           PAGE
                                                                          ------

Part I. FINANCIAL INFORMATION                                                3

  Item 1. Financial Statements                                               3

      Consolidated Balance Sheet as at March 31, 2001                        4
      Interim Consolidated Statement of Changes in Shareholders'
      Equity for the period ended March 31, 2001                             5
      Interim Consolidated Statement of Operations for the period
      ended March 31, 2001                                                   6
      Interim Consolidated Statement of Cash Flows for the period
      ended March 31, 2001                                                   7
      Notes to Interim Consolidated Financial Statements                 8 - 9

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



<PAGE>

                          PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                           CONSOLIDATED BALANCE SHEET

                                  (Unaudited)
                            (Stated in U.S. Dollars)


                                                       March 31     December 31
                                                         2001          2000
                                                      ----------    -----------

                          A S S E T S

 CURRENT
    Cash                                          $     67,530    $    151,835
    Accounts receivable                                  4,978           1,248
    Sales taxes receivable                               3,782          27,574
    Due from shareholder (Note 4)                       12,565          24,408
    Prepaid and sundry                                   7,002        -
                                                  ------------    ------------

                                                  $     95,857    $    205,065

 CAPITAL ASSETS (Note 3)                             1,004,450       1,060,173
                                                  ------------    ------------


                                                  $ 1,100,307     $  1,265,238
                                                  ============    ============

                     L I A B I L I T I E S

 CURRENT
    Accounts payable and accrued liabilities      $   684,446     $    599,603
    Current portion of bank term loan (Note 4)         34,479          34,479
                                                  ------------    ------------

                                                  $   718,925     $    634,082

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

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

                                                  $ 1,153,775     $  1,068,932
                                                  ------------    ------------

                      SHAREHOLDERS' DEFICIT

 SHARE CAPITAL ISSUED AND PAID UP (Note 6)        $    20,000     $     20,000
 CAPITAL IN EXCESS OF PAR VALUE                     1,024,143        1,016,983
 CUMULATIVE TRANSLATION ADJUSTMENT                    (48,885)         (41,462)
 DEFICIT                                           (1,048,726)        (799,215)
                                                  ------------    ------------

                                                  $   (53,468)    $    196,306
                                                  ------------    ------------

                                                  $ 1,100,307     $  1,265,238
                                                  ============    ============


<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 Adjustment          -            -            -                 -       (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 MARCH 31,2001
  Net Loss                                         -            -            -          (249,511)            -      (249,511)

  Foreign Currency Translation Adjustment          -            -            -                 -        (7,423)       (7,423)
  Imputed interest on shareholder loans                                  7,160                                         7,160
                                         ------------    ---------   ----------       -----------     ---------    ----------
BALANCE - March 31,2001                    20,000,000   $  20,000    1,024,143       $(1,048,726)     $(48,885)    $ (53,468)
                                         ============    =========   ==========       ===========     =========    ==========

</TABLE>


                                                      See accompanying notes.

<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
            INTERIM CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
                    FOR THE THREE MONTHS ENDED MARCH 31, 2001

                                  (Unaudited)
                            (Stated in U.S. Dollars)



 REVENUE                                                   $     222,384
                                                           -------------


 EXPENSES
    Advertising and promotion                              $      22,431
    Bad debts                                                     11,292
    Bank charges and interest                                     19,006
    General and office                                             6,560
    Insurance                                                         36
    Management salaries                                           32,734
    Professional fees                                             71,180
    Rent                                                           7,834
    Telephone and communication                                   91,273
    Travel                                                           512
    Wages, commissions and benefits                              129,221
    Amortization                                                  79,816
                                                           -------------
                                                           $     471,895


 NET LOSS                                                  $   (249,511)
                                                           -------------


 OTHER COMPREHENSIVE LOSS
    Foreign currency translation adjustment                $     (7,423)
                                                           -------------


 DEFICIT - Beginning of period                             $   (799,215)

 NET LOSS FOR THE PERIOD                                       (249,511)
                                                           -------------

 DEFICIT - End of period                                   $ (1,048,726)
                                                           =============



 LOSS PER COMMON SHARE (Note 7)                            $      (0.01)
                                                           =============

 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING         20,000,000
                                                           =============


                            See accompanying notes.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2001

                                  (Unaudited)
                            (Stated in U.S. Dollars)



CASH FROM (USED IN) OPERATIONS

    Net loss                                                      $   (249,511)
    Adjustments to reconcile net loss to net cash
    provided by operating
        activities:
        Amortization                                                    79,816
        Non-cash imputed interest                                        7,160
    Changes in assets and liabilities relating to operations
        Accounts receivable                                             (3,730)
        Accounts payable and accrued liabilities                       108,635
        Prepaid and sundry assets                                       (7,002)
                                                                  -------------

    NET CASH USED IN OPERATIONS                                   $    (64,632)
                                                                  -------------


 CASH USED IN INVESTING ACTIVITIES

    Purchase of capital assets                                    $    (24,093)
                                                                  -------------


 CASH FROM IN FINANCING ACTIVITIES
    Net amounts from shareholder                                  $      11,843
                                                                  -------------


 EFFECT OF EXCHANGE RATE CHANGES ON CASH                          $     (7,423)
                                                                  -------------



 NET DECREASE IN CASH DURING THE PERIOD                           $    (84,305)


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


 CASH - End of period                                             $      67,530
                                                                  =============


                            See accompanying notes.

<PAGE>
                      YAPALOT COMMUNICATIONS HOLDINGS INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                  (Unaudited)
                            (Stated in U.S. Dollars)


The financial  information for the period ended March 31, 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 March 31, 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.


<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 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
<TABLE>

                                                 Accumulated       Net         Net
                                       Cost     Amortization      2001        2000
                                      ------   ---------------   ------      ------
    <S>                             <C>         <C>            <C>          <C>
    Computer equipment              $  146,111     $ 22,973    $  123,138  $  139,835
    Computer software                   72,867       26,754        46,113      52,355
    Furniture and fixtures              67,152        6,906        60,246      63,417
    Leasehold improvements              70,510        7,238        63,272      66,434
    Network communication equipment    847,818      136,137       711,681     738,132
                                     ----------    ---------   ----------- -----------
                                    $1,204,458     $200,008    $1,004,450  $1,060,173
                                     ==========    =========   =========== ===========
</TABLE>

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 of Canada 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 amounts due
    from a  shareholder.  This balance is being offset with salary  amounts that
    have been accrued  toward Mr.  Barzakay in  connection  with his  management
    agreement with the company.

<PAGE>


                      YAPALOT COMMUNICATIONS HOLDINGS INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                  (Unaudited)
                            (Stated in U.S. Dollars)


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.

<PAGE>


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

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.

Significant  Developments

For the fiscal  period  ended March 31,  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.  In addition,  we
are also  working on  Approved  Agent  Agreements  which we  anticipate  will be
completed  by  year  end.   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 matrialize  until 3rd or 4rth
quarter of this year. The customer growth is expected to be accomplished through
a planned increase in advertising  expenditures in 3rd quarter and the hiring of
additional sales staff during the 2nd quarter.  If we do 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.

Management  has also detected a discrepancy  in the initial  liability  shown as
owing to Yuval Barzakay. Although the liability still exists, it is held through
a financial institution,  under the name of the corporation, as opposed to Yuval
Barzakay. This liability is a Canadian  government-guarantee Small Business Loan
with Yuval Barzakay personally guaranteeing  twenty-five percent of the original
loan  balance  to  the  financial   institution  with  the  Canadian  government
guaranteeing  the remaining  seventy-five  percent of the original loan balance.
Notwithstanding  above,  Mr. Barzakay entered into an agreement with the Company
whereby he is  responsible  for repaying all principal and interest  payments on
the loan to Yapalot on an annual  basis.  We are a holding  company  and have no
independent  operating history other than through Yapalot  Communications.  Inc.
Expenses for the period ended  December 31, 2000  represent  consolidated  costs
since inception.

COMPARISON  OF THE PERIOD ENDED MARCH 31, 2001 TO THE PERIOD ENDED  DECEMBER 31,
2000.

During the current  quarter  ended March 31,  2001,  we  maintained  our current
customer base. No additional  gateways were  installed at this time.  During the
quarter, we increased our customer contracts by $59,350.  Marketing  initiatives
have been reduced.  We have also minimized our staffing to core essentials which
include programming,  IT, customer service, and administrative.  This was a cost
cutting initiative  coherent with current market trends of reducing overhead and
streamlining  operations towards faster  profitability.  Many of todays 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 NASDQ 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 than later.

RESULTS OF OPERATIONS

For the 3 months ended March 31,2001:

During this quarter ended March 31, 2001,  we increased our revenue  activities,
signing customers to contracted  revenues  amounting to $222,384.  Our resulting
loss for this  period of  $249,511  reflects a  significant  increase 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 cost of ongoing  organizational  development to ensure
we  meet  the  needs  of our  current  and  projected  operations,  as  well  as
anticipated  costs from our advertising  program,  which cost us $22,431 in this
quarter. In addition,  we also developed the remaining proportion of our planned
staffing  level this  quarter,  resulting in $129,221 of wages and other payroll
costs this quarter.

Amortization  of  capital  assets in the  amount of $79,816  this  quarter  also
represents a significant  cost,  due to the increased  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.

For the cumulative 12 months ended March 31,2001

For the cumulative period from incorporation,  April 6, 2000, to March 31, 2001,
we began increasing our contracted revenues to $390,657. Our cumulative net loss
of  $1,048,726  for the twelve months ended March 31,2001 is largely a result of
anticipated costs of $411,517 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
$356,181.  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
$200,008  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  set  forth in Part III
hereto. Current assets totaled $95,857 at March 31, 2001 compared to $205,065 at
December 31,  2000.  The  decrease in the last  quarter is  attributable  to the
utilization of cash for additional  payments on gateway  purchases,  maintaining
our infrastructure as the business develops,  and our acquiring customer service
contracts to be collected over the current  operating  cycle. At March 31, 2001,
we had cash 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 as of March 31, 2001.

As of March 31, 2001, current  liabilities totaled $718,925 compared to $634,082
at December 31, 2000.  The increase is largely  attributable  to  recognizing an
increasing portion of our contracted  revenues as current deferred revenues,  as
the service  period  relates to the coming  current  periods.  In addition,  the
current  liabilities are also reduced by the  continuation  of payments  against
current supplier balances, under initial financing terms on the gateway hardware
received by us, and increased  from carrying a bank overdraft as a result of the
increasing carrying costs of our developing  infrastructure.

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.
<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: September 12, 2001


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