SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-QSB/A



(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 July 20,2001.

<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 and for the period from
      date of inception to December 31,2000                                 5

      Interim Consolidated Statement of Operations for the period ended
      March 31,2001 and for the period from date of inception to December
      31,2000                                                               6

      Interim Consolidated Statement of Cash Flows for the period ended
      March 31,2001 and for the period from date of inception to December
      31,2000                                                               7

      Notes to Interim Consolidated Financial Statements                  8 - 9

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


Part II. OTHER INFORMATION                                                 14

  Item 3. Certain Relationships and Related Transactions                   14

  Item 4. Description of Securities                                        14

  Item 5. Changes in Auditors'                                             14

<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>


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


                                                          March 31        December 31
                                                            2001             2000
                                                          --------        -----------
<S>                                                     <C>              <C>

                                   A S S E T S
 CURRENT
    Cash                                               $        -        $    151,835
    Accounts receivable                                     4,978               1,248
    Sales taxes receivable                                  3,782              27,574
    Prepaid and sundry                                     39,590              24,408
                                                         ---------        -----------

                                                       $    48,350       $    205,065
 CAPITAL ASSETS (Note 3)                                 1,004,450          1,060,173
                                                         ----------       -----------

                                                       $ 1,052,800       $  1,265,238
                                                         ==========       ===========

                              L I A B I L I T I E S

 CURRENT
    Bank indebtedness                                  $   102,716       $          -
    Accounts payable and accrued liabilities               499,251            599,603
    Current portion of bank term loan (Note 4)              34,479             34,479
                                                         ----------       -----------

                                                       $   636,446       $    634,082

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

 SHAREHOLDERS' ADVANCES (Note 5)                           302,793            301,111
                                                         ----------       ------------

                                                       $ 1,072,978       $  1,068,932
                                                         ----------       ------------

                              SHAREHOLDERS' DEFICIT

 SHARE CAPITAL ISSUED AND PAID UP (Note 6)             $    20,000       $     20,000
 CAPITAL IN EXCESS OF PAR VALUE                            996,000            996,000
 CUMULATIVE TRANSLATION ADJUSTMENT                         (82,600)           (41,462)
 CUMULATIVE IMPUTED INTEREST                                28,888             20,983
 DEFICIT                                                  (982,466)          (799,215)
                                                         ----------       -------------
                                                       $   (20,178)      $    196,306
                                                         ----------       -------------
                                                       $ 1,052,800       $  1,265,238
                                                         ==========       =============
</TABLE>

                            See accompanying notes.
<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         Income            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)         (20,479)      (819,694)

BALANCE - December 31,2000                20,000,000    $  20,000      996,000     $(799,215)     $   (20,479)     $ 196,306

FROM JANUARY 1,2001 TO MARCH 31,2001

  NET LOSS                                         -            -            -      (183,251)         (33,233)      (216,484)

BALANCE - March 31,2001                   20,000,000    $  20,000      996,000     $(982,466)     $   (53,712)     $ (20,178)



                             See accompanying notes.
</TABLE>


<PAGE>


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

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

                                                   For the Period Ended
                                                March 31        December 31
                                                 2001             2000
                                               -----------      ------------
                                                (3 Months)      (12 Months)

 REVENUE                                      $    222,384     $   168,273
                                               ------------     -----------

 EXPENSES
    Advertising and promotion                 $     22,431     $   389,086
    Bad debts                                       11,292
        -
    Bank charges and interest                       19,006          40,962
    General and office                               6,560          59,924
    Insurance                                           36           5,862
    Professional fees                               71,180         161,182
    Rent                                             7,834          24,892
    Telephone and communication                     91,273         223,359
    Travel                                             512          20,411
    Wages, commissions and benefits                128,241         226,960
    Amortization                                    79,816         120,192
    Less - Gain on foreign exchange                (32,546)       (305,342)
                                               ------------   -------------

                                              $    405,635      $  967,488
                                               ------------   -------------


 NET EARNINGS (LOSS)                          $   (183,251)     $ (799,215)
                                               ------------   -------------

 OTHER COMPREHENSIVE LOSS
    Foreign currency translation adjustment   $    (41,138)     $  (41,462)
    Imputed interest on shareholder loans            7,905          20,983
                                               ------------   -------------

                                              $    (33,233)     $  (20,479)
                                               ------------   -------------

 DEFICIT - Beginning of period                $   (799,215)     $        -
 NET EARNINGS (LOSS) FOR THE PERIOD               (183,251)       (799,215)
                                               ------------   -------------

 DEFICIT - End of period                      $   (982,466)     $ (799,215)
                                               ============   =============

 LOSS PER COMMON SHARE (Note 7)               $      (0.01)     $    (0.05)
                                               ============   =============

 WEIGHTED AVERAGE NUMBER OF COMMON SHARES
    OUTSTANDING                                 20,000,000      17,529,412
                                               ============   =============

                             See accompanying notes.
<PAGE>

                      YAPALOT COMMUNICATIONS HOLDINGS INC.
                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

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

                                                                             For the Period
                                                                                 Ended
                                                                        March 31        December 31
                                                                          2001             2000
                                                                       ----------      -------------
                                                                       (3 Months)       (12 Months)
<S>                                                                    <C>             <C>

CASH FROM (USED IN) OPERATIONS

    Net loss                                                         $   (183,251)      $  (799,215)
    Adjustments  to  reconcile  net  loss  to net  cash  provided
        by  operating activities:
        Amortization                                                       79,816           120,192
        Non-cash imputed interest                                           7,905            20,983
    Changes in assets and liabilities relating to operations
        Accounts receivable                                                (3,730)           (1,248)
        Accounts payable and accrued liabilities                          (76,560)          572,028
        Prepaid and sundry assets                                         (15,182)          (24,408)
                                                                       ------------      ------------

    NET CASH USED IN OPERATIONS                                      $   (191,002)      $  (111,668)
                                                                       ------------      ------------

 CASH USED IN INVESTING ACTIVITIES

    Purchase of capital assets                                       $    (24,093)      $(1,180,364)
                                                                       ------------      ------------

 CASH FROM FINANCING ACTIVITIES

    Advances from shareholders                                       $      1,682       $   301,111
    Loan proceeds                                                               -           168,218
    Capital shares issued                                                       -         1,016,000
                                                                       -----------      -------------
    NET CASH FROM FINANCING ACTIVITIES                               $      1,682       $ 1,485,329
                                                                       -----------      -------------

 EFFECT OF EXCHANGE RATE CHANGES ON CASH                             $    (41,138)      $   (41,462)
                                                                       -----------      -------------


 NET INCREASE IN CASH DURING THE PERIOD                              $   (254,551)      $   151,835

 CASH - Beginning of period                                               151,835                 -
                                                                      ------------      -------------
 CASH (INDEBTEDNESS) - End of period                                 $   (102,716)      $   151,835
                                                                      ============      =============
</TABLE>


                            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 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 prepaid and sundry assets.


<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                                 $   302,793
                                                                  ===========


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 materialize 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.
<PAGE>

Management has also detected a discrepancy in the initial  liability due payable
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.  As such Mr.
Barzakay pays 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.  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  $672,957,  of which
$450,573  remains  to be  collected  as the  related  service is  provided.  Our
resulting  loss for this period of $191,088  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 a
deferral of the recognition of the unserviced  portion of the customer  contract
revenues, 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 $128,241 of
wages and other payroll costs this quarter.
<PAGE>

The  net  loss  for  the  current  quarter  was  also  affected  by the  cost of
professional legal,  accounting and other services during the period, which grew
out of our ongoing organizational development to ensure we meet the needs of our
current and projected  operations.  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 $841,230,  of which $450,573 will
be recognized  as revenue when the related  service has been provided by us. Our
cumulative  net loss of $973,851 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 $355,201.  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.
<PAGE>

Current  assets  totaled  $483,410  at March 31,  2001  compared  to $573,304 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 a cash  overdraft  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 at March 31, 2001.

As at March  31,  2001,  current  liabilities  totaled  $1,085,368  compared  to
$1,015,692  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
Unites States dollars. As indicated in the notes to this financial  information,
any  translation  adjustment  to the  reporting  currency  would be  included in
equity.

During the  cumulative  period  ended March 31,  2001,  we conducted an offering
pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended, to
accredited  investors  of  4,000,000  shares of  common  stock at $0.25 to raise
$1,000,000 for working capital.

FORWARD LOOKING STATEMENTS

Statements that are not historical facts included in this registration statement
are "forward looking  statements" and 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.
<PAGE>

ITEM 7.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

None.
                                    PART III
OTHER INFORMATION

ITEM 8. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Yapalot Communications Inc. currently has an outstanding loan to Marilyn Benlolo
in the amount of $302,793.  The loan is interest free and the funds were used to
finance Yapalot  Communications Inc. since its inception in March 2000. The loan
is for a term of no less  than one year and is  payable  after  one year or when
revenues reach a level in which the loan can be repaid.

Yuval Barzakay  arranged for a Canadian Small Business Loan for us in the amount
of $168,794.  As part of the initial  funding  agreement  with us, Mr.  Barzakay
agreed to reimburse us 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.

ITEM 10. DESCRIPTION OF SECURITIES

We have authorized 50,000,000 shares of common stock, $.001 par value per share.
As of December 31, 2000,  there were 20,000,000  shares issued and  outstanding.
All  shares  are of the same  class and have the same  rights,  preferences  and
limitations.  Holders  of shares are  entitled  to  receive  dividends  in cash,
property or shares when and if dividends  are declared by the Board of Directors
out of funds legally available  therefore.  The By-Laws impose no limitations on
the payment of dividends. A quorum for any meeting of shareholders is a majority
of shares then issued and  outstanding  and entitled to be voted at the meeting.
Holders  of  shares  are  entitled  to one vote  per  share.  Upon  liquidation,
dissolution or winding up of our business, any assets will be distributed to the
holders of shares  after  payment  or  provision  for  payment of all our debts,
obligations or liabilities. There are no preemptive rights, subscription rights,
or redemption  provisions  relating to the shares and none of the shares carries
any liability for further calls.
<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: July 20, 2001


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