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

                              FORM 10-QSB

(Mark One)

XX  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

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

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

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

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

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

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

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

Yes  XX      No
    ----         ----

The Company had 4,125,000 shares of common stock, par value $.001 per share,
outstanding as of July 15, 2003.

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


                                 -1-
<PAGE>


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

      ITEM 1.   FINANCIAL STATEMENTS

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

                CONSOLIDATED BALANCE SHEETS AS OF
                JUNE 30, 2003 AND DECEMBER 31, 2002..................3

                CONSOLIDATED STATEMENTS OF OPERATIONS FOR
                THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002..........4

                CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
                THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002..........5-6

                CONSOLIDATED STATEMENT OF CHANGES IN
                STOCKHOLDERS' DEFICIT FOR THE SIX MONTHS
                ENDED JUNE 30, 2003 .................................7

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...........8


      ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OR PLAN OF OPERATION ...............................9

      ITEM 3.   CONTROLS AND PROCEDURES .............................14

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

          ITEM 1    LEGAL PROCEEDINGS ...............................15

          ITEM 2    CHANGES IN SECURITIES ...........................15

          ITEM 3    DEFAULTS ON SENIOR SECURITIES ...................15


          ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF
                    SECURITY HOLDERS ................................15

          ITEM 5    OTHER INFORMATION ...............................15

          ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K ................15

      SIGNATURES.....................................................16



                                 -2-
<PAGE>
                      GAVELLA CORP. AND SUBSIDIARY
                       CONSOLIDATED BALANCE SHEETS
                   JUNE 30, 2003 AND DECEMBER 31, 2002
                               (Unaudited)

                                  ASSETS
                                                  June 30,       December 31,
                                           2003            2002
                                               -----------        -----------
Rental property, net                           $ 3,105,726        $ 3,084,321
Cash                                                94,215             88,849
Cash held in escrow                                 89,353             44,493
Accounts receivable, net of
  allowance for doubtful accounts
  of $2,000 and $4,000                               8,858             30,791
Prepaid expenses                                    50,094             63,405
Deferred financing costs, net                       36,651             40,970
Notes receivable                                   188,719                -0-
Interest receivable                                  2,720                -0-
Investments, at cost                                22,000                -0-
                                               -----------        -----------
    Total Assets                               $ 3,598,336        $ 3,352,829
                                               ===========        ===========

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities
  Mortgage notes payable                       $ 3,208,091        $ 3,231,844
  Notes payable - related party                    453,500            335,500
  Accrued interest                                  28,035             22,035
  Accounts payable                                  42,069             18,951
  Accrued expenses                                  64,881             68,637
  Security deposits payable                         88,377             74,597
  Deferred revenue                                  18,750                -0-
  Other liabilities                                  8,944             10,127
                                               -----------        -----------
     Total Liabilities                           3,912,647          3,761,691
                                               -----------        -----------

Minority interest                                      -                   -
                                               -----------        -----------
Stockholders' Deficit
 Common stock, $.001 par value,
  5,000,000 shares authorized,
  4,125,000 and 2,575,000 shares issued
  and outstanding in 2003 and 2002,
   respectively                                      4,125              2,575
 Additional paid in capital                        567,825            364,675
 Accumulated deficit                           (   866,561)        ( 776,112)
                                               -----------        -----------
                                               (   294,611)        ( 408,862)
     Less common stock subscriptions           (    19,700)               -0-
                                               -----------        -----------
     Total stockholders' deficit               (   314,311)        ( 408,862)
                                               -----------        -----------
Total Liabilities and Stockholders'
  Deficit                                       $3,598,336        $ 3,352,829
                                               ===========        ===========

                                 -3-
<PAGE>
                       GAVELLA CORP. AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                               (Unaudited)

                                          	        2003            2002
                                                 -----------      -----------
Revenues
  Rental real estate                               $ 441,084      $   441,605
  Other revenue                                       56,250              -0-
                                                 -----------      -----------
    Total revenues                                   497,334          441,605

Operating expenses
  Administrative expenses                            145,514          104,981
  Utilities expense                                   77,294           66,927
  Operating and maintenance                           69,924           42,261
  Taxes and insurance                                 79,594           74,570
  Depreciation and amortization                       68,893           62,482
                                                 -----------      -----------
     Total operating expenses                        441,219          351,221
                                                 -----------      -----------

Operating income                                      56,115           90,384
                                                 -----------      -----------
Other income (expense)
  Interest income                                      7,944              507
  Interest expense                              (    154,508)   (     151,187)
  Equity in earnings of
   investments, net                                      -0-            2,476
                                                 -----------      -----------
      Total other income (expense)              (    146,564)   (     148,204)
                                                 -----------      -----------
Net loss                                        ( $   90,449)   (   $  57,820)
                                                 ===========      ===========



Basic net loss per share                        ($      .03)     ($      .02)
                                                 ===========      ===========

Average number of common shares outstanding -
  Basic                                            2,923,343        2,486,500
                                                 ===========      ===========

                                 -4-
<PAGE>

                       GAVELLA CORP. AND SUBSIDIARY
             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                 FOR THE SIX MONTHS ENDED JUNE 30, 2003

                                   (UNAUDITED)


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

Balance, January 1, 2003       2,575,000   2,575   $ 364,675    $(776,112)                       $(408,862)

Increase in additional
  paid-in capital                                     50,000                                        50,000

Issuance of common stock,
 net of stock issuance
 costs                         1,550,000   1,550     153,150                                       154,700

Common Stock subscribed                                                           (19,700)        ( 19,700)

Net Loss                                                         ( 90,449)                        ( 90,449)
                               ---------  -------  ---------    ----------     --------------  -------------
Balance, June 30, 2003         4,125,000  $ 4,125  $ 567,825    $(866,561)     $  (19,700)       $(314,311)
                               =========  =======  =========    ==========    =============    =============

</TABLE>





                                    -5-
<PAGE>
                       GAVELLA CORP. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                               (Unaudited)

                                                       2003            2002
                                                 -----------     -----------
Cash flows from operating activities:
  Net loss                                       ($   90,449)      ($ 57,820)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation                                      68,893          62,482
    Bad debt provision                            (    2,000)      (   7,068)
    Interest income on note receivable            (    5,000)            -0-
    Loan facilitation fee                         (   50,000)            -0-
    Equity in earnings of investments, net               -0-       (   2,476)
    (Increase) decrease in:
      Accounts receivable                             23,933           2,144
      Prepaid expenses                                21,311          22,784
      Cash held in escrow                         (   44,860)      (   1,190)
      Interest receivable                         (    2,720)            -0-
     Increase (decrease) in:
      Accounts payable                            (   18,101)      (   5,578)
      Accrued interest                                 6,000             -0-
      Accrued expenses                            (    3,756)          1,803
      Deferred revenue                            (    6,250)            -0-
      Other liabilities                           (    1,183)      (  19,324)
      Security deposits payable                       13,780       (     525)
                                                 -----------     -----------
Net cash used in operating activities             (   90,402)      (   4,768)
                                                 -----------     -----------
Cash flows from investing activities:
  Purchases of property and equipment           (     85,979)     (   21,375)
  Loans made                                    (     97,500)            -0-
  Purchases of investments                               -0-      (    5,250)
                                                 -----------     -----------
Net cash used in investing activities           (    183,479)     (   26,625)
                                                 -----------     -----------
Cash flows from financing activities:
  Repayment of mortgage notes payable           (     23,753)    (    21,874)
  Proceeds from notes payable                        125,000          40,000
  Payments on notes payable                     (      7,000)    (    11,500)
  Issuance of common stock                           135,000          35,500
  Increase in additional paid-in capital              50,000             -0-
                                                 -----------     -----------
Net cash provided by financing activities            279,247          42,126
                                                 -----------     -----------
Increase in cash                                       5,366          10,733

Cash, beginning                                       88,849          87,997
                                                 -----------     -----------
Cash, ending                                      $   94,215       $  98,370
                                                 ===========     ===========





                                 -6-
<PAGE>
                       GAVELLA CORP. AND SUBSIDIARY
            CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
             FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002

                             (UNAUDITED)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                                          2003                2002
                                        --------          ---------
 Cash paid for interest                   $148,508        $151,187
                                        ========          ========

Proceeds from issuance of common stock during the six months ended
June 30, 2003 and 2003 follows:

    Issuance of common stock                      $155,000         $   45,000
    Common stock subscription                     ( 19,700)               -0-
    Stock issuance costs                          (    300)         (   9,500)
                                                  --------          ---------
    Net proceeds from issuance of common
      stock                                       $135,000         $   35,500
                                                  ========          =========

 Non-cash investing and financing activities:
                                          2003                2002
                                        --------          ---------
    Purchase of property and equipment  $ 85,979         $   51,375

    Debt incurred                           -0-           (  30,000)
                                        --------          ---------
    Cash paid for purchases of property
      and equipment                     $ 85,979         $   21,375
                                        ========          =========

During the six months ended June 30, 2003, the Company entered into the
following agreements with Apta Holdings, Inc., ("APTA"), an unrelated entity:

The Company will provide consulting services to Apta over a two year period.
In exchange for its services, the Company received 500,000 shares of Apta's
common stock valued at $.05 per share, or $25,000.  As of June 30, 2003, the
Company recognized $6,250 of consulting fee revenue which is included in
other revenue.

The Company loaned Apta $50,000 in the form of $25,000 cash and via
assumption of $25,000 of Apta's accounts payable to a related party.  As
consideration for making the loan, the Company received 100,000 shares of
Apta's common stock valued at $.05 per share, or $5,000.  The $5,000 fee is
recorded as interest income.

The Company  assumed an additional $16,219 of Apta's accounts payable to a
related party in exchange for a promissory note receivable from Apta.

The Company also loaned Apta $72,500 in order to settle certain bank debt of
Apta at a discount.  For its efforts in favorably settling Apta's debt, the
Company received a $50,000 loan facilitation fee in the form of a promissory
note receivable from Apta.   The promissory note is convertible into
1,000,000 shares of Apta's common stock.  The $50,000 loan facilitation fee
is recorded as other revenue.

                                    -7-
<PAGE>
GAVELLA CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003 AND 2002

(UNAUDITED)

Note 1 - Organization

              Gavella Corp. was incorporated on June 21, 2000 in the state of
Delaware as a wholly owned subsidiary of Apta Holdings, Inc. ("APTA"). On August
7, 2000, APTA transferred all of the assets and liabilities of its 100% wholly
owned subsidiary, Spring Village Holdings, Inc. to Gavella in exchange for
2,000,000 shares of $.001 par value Gavella common stock. Spring Village
Holdings, Inc. owns a 31% controlling interest in SVG Properties, L.P., a New
Jersey limited partnership. The Partnership owns a 124 unit apartment complex.
On December 27, 2000, each shareholder of APTA received one share of Gavella for
each share of APTA owned by the shareholders of record as of December 1, 2000.

Note 2   Summary of Significant Accounting Policies

     The summary of significant accounting policies is included in the notes to
the consolidated financial statements for the years ended December 31, 2002 and
2001, which were audited and appear in the Form 10-KSB previously filed by the
Company.

Note 3   Unaudited Financial Statements

     The consolidated balance sheet as of June 30, 2003 and the related
consolidated statements of operations and changes in stockholders' deficit, and
cash flows for the six months ended June 30, 2003 and 2002, and the related
information contained in these notes have been prepared by management without
audit.  In the opinion of management, all accruals (consisting of normal
recurring accruals), which are necessary for a fair presentation of financial
position and results of operations for such periods, have been made.  Results
for an interim period should not be considered as indicative of results for a
full year.

Note 4   Stockholders' Equity

     During the six months ended June 30, 2003, Spring Villages Holdings, Inc.
sold a 49% limited partnership interest in SVG Properties, LP to an
officer/stockholder/director of the Company for $50,000.  The Company recorded
the $50,000 gain on sale of investment as additional paid-in capital.  The
officer/stockholder/director also loaned the Company $15,000 and recast the
terms of an $85,000 loan previously advanced by him.


Note 5 - Reclassification

      Certain items in the June 30, 2002 financial information were reclassified
to conform with the June 30, 2003 financial classification.

                                    -8-
<PAGE>
ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere in
this Form 10-QSB and in the previously filed Form 10-KSB for the period
ending December 31, 2002.

General
--------

Gavella Corp. ("we", "our", "Gavella" or the "Company") is a real estate
holding company.  We have one wholly owned subsidiary, Spring Village
Holdings, Inc.  Spring Village Holdings, Inc. owns a 31% controlling interest
in SVG Properties, L.P., a New Jersey limited partnership (the
"Partnership").  The Partnership owns a 124 unit apartment complex.  The
chart below depicts our corporate structure:

                         ------------------
                        |   Gavella Corp.  |
                         ------------------
                                100%
                                 |
                    -----------------------------
                   | Spring Village Holdings, Inc.|
                    -----------------------------
                                 |
                                 |
                                 31%
                       ----------------------
                      | SVG Properties, L.P. |
                       ----------------------

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

We are currently engaged in two lines of business; owning and operating
income producing real estate, and making investments in and providing
consulting services to other companies.

On December 31, 1995, Spring Village Holdings, Inc., our wholly owned
subsidiary, acquired a 4.5% general partnership interest and a 75.5% limited
partnership interest (80% total) in SVG Properties, L.P. which owns the
Spring Village Apartments complex in Sharon Hill, Pennsylvania from Harry J.
Santoro and companies affiliated with Mr. Santoro, our President, for
$50,000.

On March 24, 2003, we offered for sale to the limited partners of SVG
Properties, L.P., a 49% limited partnership interest.  The 49% interest was
acquired by Harry J. Santoro, our President, for $50,000.  Mr. Santoro also
loaned us $15,000, and recast the terms of an $85,000 loan previously
advanced by him.  The proceeds of the sale and the loan were reinvested into
our apartment complex.  After the sale, we retained a 31% interest in SVG
Properties, L.P., consisting of a 4.5% general partnership interest plus a
26.5% limited partnership interest.


                                      -9-
<PAGE>
The consolidated financial statements include the accounts of Gavella Corp.
and our wholly owned subsidiary, Spring Village Holdings, Inc. Spring Village
Holdings, Inc. is the sole general partner of SVG Properties, L.P.  and
completely controls the partnership.  Accordingly, the accounts of Spring
Village Holdings, Inc. include its 31% partnership interest in SVG
Properties, L.P. (T/A Spring Village Apartments). All significant
intercompany transactions and accounts have been eliminated.

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

We have had a history of losses and as of June 30, 2003 reported an
accumulated deficit of $866,561.  We did not generate a positive cash flow
from operations in the last two fiscal years, due to unanticipated rising
costs and one time charges.  In 2001 and 2002, we had a negative cash flow
from operations of $111,168 and $35,166, respectively.  We anticipate a
$30,000 negative cash flow from operations in the fiscal year 2003.  We
estimate that we will need approximately $150,000 to fund anticipated capital
improvements and scheduled mortgage principal payments due in 2003.  On March
26, 2003, we began to offer for sale 1,500,000 shares of our common stock at
$.10 per share, pursuant to the terms of a private offering memorandum.
Approximately $90,000 will be invested into SVG Properties, L.P., $50,000
will be used to make investments, and the remainder will be used for general
corporate purposes.  The offering was completed in July and the entire
$150,000 was raised.  There can be no assurance that we will be successful in
our efforts to generate sufficient cash flow or to raise capital in the
future to meet our scheduled debt service or other cash requirements.

We have no plans to acquire additional single family or multi-family
residential properties in the foreseeable future.  We do not currently have
any specific plans for acquisitions, and no potential acquisitions are
currently under review.  We are currently focused on using our cash flow from
operations, if any, to reduce debt, with the remainder, if any, being
reinvested in our existing property.

We also intend to utilize our contacts, business expertise and knowledge of
the securities markets to identify and invest in small, established private
companies with well defined growth plans. We may also assist such companies
by utilizing various strategies to maximize their long term value.  These
strategies may include preparing the company to become a public company,
assisting with mergers and acquisitions, and facilitating additional capital
raising activities.  In order to enhance our shareholder value, we intend to
liquidate our interest in such companies over time. There is no assurance
that such companies can be identified or once identified, that any
investments made in such companies will prove to be profitable.

On September 30, 2001, we invested $25,000 in DATANET Office Solutions, Inc.
in exchange for 500,000 shares of common stock.   On July 31, 2002, we sold
our investment in DATANET for $50,000.





                                      -10-
<PAGE>
DATANET Office Solutions, Inc. is in the business of providing office
supplies, printing, print management, ad specialties and a number of related
services.  The investment in DATANET was accounted for using the equity
method of accounting.  Accordingly, our proportionate share of DATANET's net
profit or loss subsequent to September 30, 2001 is reflected in our financial
statements.

On October 31, 2001, we invested $3,750 in Eastern Envelopes & Graphics, Inc.
("Eastern").  We invested an additional $5,250 in 2002.  Eastern is in the
business of commercial printing, primarily envelopes.  The investment in
Eastern has been written off.

On March 25, 2003, we invested $50,000 into Apta Holdings, Inc. in the form
of a secured promissory note.  We received 100,000 shares of Apta's
restricted common stock, valued at $5,000, as a fee for making the loan.
Apta's stock is quoted on the NASD OTC Bulletin Board under the symbol
"APTA".  We also entered into an agreement with Apta whereby we shall provide
certain consulting services to Apta over a two-year period to help Apta make
the transition to becoming a public company.  We received 500,000 shares of
Apta's restricted common stock, valued at $25,000, pursuant to this
agreement.  During the second quarter, we invested an additional $88,719 in
the form of secured promissory notes.  Of the proceeds, $72,500 was used by
Apta to settle certain bank debt.  For our efforts in assisting Apta in
settling the bank debt, we received a loan facilitation fee in the form of a
$50,000 convertible promissory note.  The note is convertible into 1,000,000
shares of Apta restricted common stock. Apta, through its wholly owned
subsidiary, InteliSys Aviation Systems, is a provider of integrated software
and hosting services to regional, mid-size airlines and fleet operators.
Apta is not yet profitable, and the investment in Apta is highly speculative.
The investment in Apta will be carried at cost.

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

The following discussion is for the six months ended June 30, 2003 and 2002,
respectively.

We reported total revenues of $497,334 and $441,605 in 2003 and 2002,
respectively, an increase of $55,279 or 12.6%.  Our real estate revenues
declined slightly to $441,084 in 2003.  Occupancy was approximately 93% and
96%, respectively. A small increase (approximately 3%) in the average unit
rental rate was not enough to offset a significant decrease in occupancy.  We
had unusually high vacancy in the first quarter of 2003.  Certain management
and operating policy changes were implemented in the second quarter; as a
result, our occupancy improved considerably in the second quarter.  By June
our occupancy was 99%, considerably better than our historical averages.   We
expect to be able to maintain occupancy at 95% or higher for the remainder of
the year.  Other revenue in 2003, which totaled $56,250, consisted of fees
for consulting services provided to other companies.

Total operating expenses increased from $351,221 in 2002 to $441,219 in 2003,
an increase of $89,998 or 25.6%.

Administrative expenses increased to $145,514 in 2003 from $104,981 in 2002.
The increase in administrative expenses arose from added public company
overhead and increases in bad debts and advertising expenses in our real
estate business.  Utilities increased by $10,367 as a result of a significant
increase in gas heating costs and rising water and sewer costs.  We expect
these costs to continue to rise.  Operating and maintenance expense increased
from $42,261 in 2002 to $69,924 in 2003, primarily due to severe and numerous
winter snowstorms which increased our labor and snow removal costs well above
historical averages and higher unit

                                    -11-
<PAGE>
turnover. Taxes and insurance increased by $5,024, from $74,570 in 2002 to
$79,594 in 2003, primarily due to increases in real estate taxes.
Depreciation increased by $6,411 to $68,893 in 2003, as a result of recent
capital improvements being depreciated.

Operating income decreased from $90,384 in 2002 to $56,115 in 2003, primarily
due to the decrease in rental real estate revenue and the increases in total
expenses discussed above.

Now that the unusually severe weather is over, we are expecting our operating
results to slowly improve over the next few quarters.

Net interest expense decreased by $4,116 from $150,680 in 2002 to $146,564 in
2003.  We are exploring the possibility of refinancing our mortgage debt to
take advantage of today's lower interest rates.

Equity in earnings (loss) of investments, net, is summarized below:

                                   Gavella's proportionate share of
                                   net income or (loss) under the
                                   equity method of accounting
       Entity                          2003             2002
       ------                      --------------------------------

DATANET Office Solutions, Inc.           0             7,726
Eastern Envelopes & Graphics LLC         0            (5,250)
                                     -------         -------
Net earnings from
  equity investments (loss)              0            (2,476)

Net loss increased from ($57,820) in 2002 to ($90,449) in 2003.  Basic net
loss per share increased from ($.02) in 2002 to ($.03) in 2003.

We are taxed as a C-corporation for federal and state income tax purposes.
As such, we will pay taxes on our net income as defined by the Internal
Revenue Code.  None of our tax attributes flow through to our shareholders
except for the regular taxation of dividends paid, if any.

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

At June 30, 2003, we had a $119,103 deficit in working capital, including
cash held in escrow for anticipated future expenses.  We need additional
financing to expand our business, to carry out our business plan and to
reduce debt.

On January 1, 2003, we had $88,849 in cash, exclusive of $44,493 in cash held
in escrow accounts.

During the six months ended June 30, 2003, we received proceeds of $50,000
from the sale of investments during the period. We received $135,000 from the
issuance of our common stock.  We received $125,000 from notes payable.
Operations used $90,402.  We used $85,979 to purchase property and equipment,
and reduced mortgage debt by $23,753, and other notes payable by $7,000. We
made an investment in another company in the form of loans totaling $97,500.
The net increase in cash for the period was $5,366.  We had $94,215 in cash
on June 30, 2003, exclusive of $89,353 in cash held in escrow accounts.



                                    -12-
<PAGE>
We project negative cash flow from operations in the fiscal year 2003.  We
believe we have sufficient cash on hand to fund our operations for the next
twelve months.  However,  there can be no assurance that we will be
successful in our efforts to generate sufficient cash flow to meet our
scheduled debt service or other cash requirements.

On March 26, 2003, we commenced a private offering of 1,500,000 shares of our
common stock at $.10 per share, and raised $135,000 in cash prior to June 30,
2003.  On May 30, 2003, Harry J. Santoro, our President, Treasurer and a
director, acquired 50,000 shares of our common stock for $5,000.  He also
provided us a loan of $15,000 and recast an $85,000 promissory note.  We
raised an additional $85,000 by issuing convertible promissory notes.  The
proceeds of these offerings will be used to fund our operations and make
investments in other companies.

We are pursuing options to refinance our mortgage debt.  Our goal is to
reduce our interest expense which would enhance the results from our
operations and increase our operating cash flow.

Our balance sheet is highly leveraged.  We plan to reduce this leverage
through future equity offerings as well as by funds generated from
operations.  We believe we can support operations and planned capital
expenditures for at least twelve months.  Thereafter, our continued success
will be dependant upon our ability to maintain occupancy at 95% or above and
to keep operating costs under control.

In the event that our plans change or our assumptions change or prove to be
inaccurate, we may be required to seek additional financing sooner than
currently anticipated.  We have not identified any potential sources of debt
or equity financing and there can be no assurance that we will be able to
obtain additional financing if and when needed or that, if available,
financing will be on acceptable terms.  We are currently exploring the
possibility of refinancing our debt.

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

We are making this statement in order to satisfy the "safe harbor"
provisions contained in the Private Securities Litigation Reform Act of 1995.

The foregoing discussion includes forward-looking statements relating to our
business.  Forward-looking statements contained herein or in other statements
made by us herein are made based on our management's expectations and beliefs
concerning future events impacting our business and are subject to
uncertainties and factors relating to our operations  and business
environment, all of which are difficult to predict and many of  which are
beyond our control, that could cause our actual results to differ materially
from those matters expressed in or implied  by forward-looking statements.
We believe that the following  factors, among others, could affect our future
performance and cause our actual results to differ materially from those
expressed in or implied by forward-looking statements made by us or on our
behalf:  (a) the effect of changes in interest rates; (b) the rental rate and
demand for apartment rental units; (c) fluctuations in the costs to operate
the properties we own; (d) uninsurable risks; (e) unexpected losses, and (f)
general economic conditions.


                                    -13-
<PAGE>

ITEM 3    CONTROLS AND PROCEDURES

     The Company maintains disclosure controls and procedures designed to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Securities Exchange Act of 1934
(the "1934 Act") is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the Securities and Exchange
Commission (the "SEC"). Those disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it
files or submits under the 1934 Act is accumulated and communicated to the
Company's management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate,
to allow timely decisions regarding required disclosure. Based upon the
evaluation of those controls and procedures performed as of June 30, 2003,
the Company's management, with the participation of its chief executive
officer and chief financial officer, concluded that the Company's disclosure
controls and procedures were adequate.

     The Company has implemented a process designed by, or under the
supervision of, its principal executive and principal financial officers, or
persons performing similar functions, and effected by the Company's board of
directors, management or other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures
that: (1) pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
Company's assets; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that the
Company's receipts and expenditures are being made only in accordance with
authorizations of the Company's management and directors; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a
material effect on the financial statements. The Company's management, with
the participation of its chief executive officer and chief financial officer,
has determined that there has been no change in the Company's internal
control over financial reporting that occurred during the Company's last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.


                                    -14-
<PAGE>

PART II

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


ITEM 1    LEGAL PROCEEDINGS

NONE


ITEM 2    CHANGES IN SECURITIES


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

      The  following  information  sets  forth  certain  information  for all
securities of the Company sold during the quarter ending June 30, 2003
without registration under the Securities Act of 1933 (the "Securities
Act").  The following pertains to each of the transactions:

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

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

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

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

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

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

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

                                    -15-
<PAGE>


     We issued 1,500,000 shares of our common stock to fourteen investors
for consideration of $150,000, of which $135,300 was paid in cash, and
$19,700 was in the form of subscriptions receivable, in reliance upon Rule
506 of Regulation D of the Securities Act.

     We issued 50,000 shares of our common stock to Harry J. Santoro,
President, Treasurer and a director, for consideration of $5,000 in cash, in
reliance upon Rule 4(2) of the Securities Act.

     We issued $85,000 of convertible promissory notes to three investors
for consideration of $85,000 in cash, in reliance upon Rule 506 of Regulation
D of the Securities Act.


ITEM 3    DEFAULTS ON SENIOR SECURITIES

NONE


ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NONE

ITEM 5    OTHER INFORMATION

     Gavella has been approved by the NASD for quotation on the NASD OTC
Bulletin Board under the symbol GVLA. As of July 15, 2003, the Company's
common stock has been thinly traded at a price range between $.06 and $.16
per share.

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits


      Exhibit 31.1(a) and (b) Rule 13a-14(a)/15d-14(a) Certifications
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

      Exhibit 32.1 Section 1350 Certification pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 (furnished but not filed for purposes of the
      Securities Exchange Act of 1934)

     (b) Reports on Form 8-K

         None




                                    -16-
<PAGE>
                                 SIGNATURES


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


                            GAVELLA CORP.


Dated: August 13, 2003      /s/ Harry J. Santoro
                            ----------------------------------------
                            Harry J. Santoro
                            President, Chief Executive Officer and
                            Principal Financial Officer




                                      -17-