<PAGE>


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark one)
  X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 ---      SECURITIES EXCHANGE ACT OF 1934

          For the quarterly period ended         April 30, 2001
                                         ---------------------------------

                                       OR

__        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

          For the transition period from                    to
                                         -------------------

                          Commission File Number 0-2180

                          COVISTA COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)

           New Jersey                                  22-1656895
-----------------------------------                  ----------------
(State or other Jurisdiction of                      (I.R.S. Employer
incorporation or organization)                      Identification No.)

                150 Clove Road, 8th Floor, Little Falls, NJ 07424
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (973) 812-1100

                                 Not applicable
                                 --------------
           (Former address of principal executive offices) (Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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_____

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

           Class                                 Outstanding at June 13, 2001
----------------------------                     ----------------------------
Common Share, $.05 par value                         11,409,405    shares






<PAGE>


                          COVISTA COMMUNICATIONS, INC.

                                AND SUBSIDIARIES

                        FIRST QUARTER REPORT ON FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>

                                                                                               Page No.

<S>                                                                                              <C>
PART I.    FINANCIAL INFORMATION

         Condensed Consolidated Statements of Operations and
                    Comprehensive Loss

                  Three months ended April 30, 2001 and 2000
                  (unaudited)                                                                    2

         Condensed Consolidated Balance Sheets
                  April 30, 2001 (unaudited), and
                  January 31, 2001                                                               3-4

         Condensed Consolidated Statements of Cash Flows Three months ended
                  April 30, 2001 and 2000
                  (unaudited)                                                                    5

         Notes to Condensed Consolidated Financial
                  Statements (unaudited)                                                         6-8

         Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                                  9-11


PART II. OTHER INFORMATION

         Items 1,3,5                                                                            12

         Item 2  Change in Securities and Use of Proceeds                                       12

         Item 4  Submission of Matters to a Vote of Security Holders                            12

         Item 6. Exhibits and Reports on Form 8-K                                               12


SIGNATURES                                                                                      13
</TABLE>


                                        1





<PAGE>


                  COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES

     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                                       April 30,

                                                             2001              2000
                                                         ------------    -------------
<S>                                                      <C>             <C>
Net Sales                                                $ 29,444,021    $ 31,791,862
                                                         ------------    ------------

Costs and Expenses

                   Cost of sales                           26,738,240      26,452,035
                   Selling, general and administrative      7,499,702       6,869,756
                   Other compensation                          69,245          75,915
                                                         ------------    ------------

                   Total costs and expenses                34,307,187      33,397,706
                                                         ------------    ------------

Operating Loss                                             (4,863,166)     (1,605,844)
                                                         ------------    ------------

Other Income (Expense)
                   Interest income                             35,249          48,000
                   Other income                               253,256           7,312
                   Interest expense                           (18,005)        (29,255)
                                                         ------------    ------------

                   Total other income                         270,500          26,057
                                                         ------------    ------------


Loss before benefit from income taxes                      (4,592,666)     (1,579,787)

Benefit from income taxes                                          --         (65,676)
                                                         ------------    ------------


Net Loss                                                   (4,592,666)     (1,514,111)


Other comprehensive income, net of taxes:
                   Unrealized holding gain (loss)                 289          (1,281)
                                                         ------------    ------------

Comprehensive loss                                       $ (4,592,377)   $ (1,515,392)
                                                         ============    ============

BASIC LOSS PER COMMON SHARE                              $      (0.56)   $      (0.21)
                                                         ------------    ------------

DILUTED LOSS PER COMMON SHARE                            $      (0.56)   $      (0.21)
                                                         ------------    ------------

DIVIDENDS PER SHARE                                              NONE            NONE
</TABLE>

            See notes to condensed consolidated financial statements


                                        2





<PAGE>


            COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                              April 30,      January 31,
                                                                2001            2001
                                                            --------------   ------------
                                                             (Unaudited)        (Note)

<S>                                                          <C>           <C>
ASSETS

CURRENT ASSETS:

                 Cash and cash equivalents                   $ 3,935,368   $ 2,691,889

                 Investments available for sale                  633,657       537,007

                 Accounts receivable, net                     17,373,258    20,526,178

                 Prepaid expenses and other current assets       974,360     1,225,463
                                                             -----------   -----------

                 TOTAL CURRENT ASSETS                         22,916,643    24,980,537
                                                             -----------   -----------


PROPERTY AND EQUIPMENT, NET                                   15,237,027    13,020,579
                                                             -----------   -----------

OTHER ASSETS:


                 Deferred line installation costs, net           204,870       216,672

                 Goodwill, net                                   801,523            --

                 Other assets, net                               919,378       879,614
                                                             -----------   -----------


                                                               1,925,771     1,096,286
                                                             -----------   -----------

                                                             $40,079,441   $39,097,402
                                                             ===========   ===========
</TABLE>

 Note:        The balance sheet at January 31, 2001 has been taken from
              the audited consolidated financial statements at that date.

              See notes to condensed consolidated financial statements.

                                   (Continued)

                                        3





<PAGE>


           COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES

               CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                             April 30.        January 31,
                                                               2001              2001
                                                         ---------------    ---------------
                                                           (Unaudited)          (Note)

<S>                                                       <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

                 Current portion of long-term debt        $    626,893    $    615,053

                 Accounts payable                           27,283,096      27,960,046

                 Other current and accrued liabilities       1,890,134       2,834,557

                 Salaries and wages payable                  1,692,721       1,304,818
                                                          ------------    ------------

TOTAL CURRENT LIABILITIES                                   31,492,844      32,714,474
                                                          ------------    ------------
OTHER LONG-TERM LIABILITIES                                    222,747         223,788
                                                          ------------    ------------
LONG-TERM DEBT                                                 220,441         382,047
                                                          ------------    ------------

SHAREHOLDERS' EQUITY
                 Common Stock                                  647,791         475,291
                 Additional paid-in-capital                 37,043,954      30,016,454
                 Accumulated deficit                       (15,878,185)    (11,285,519)
                                                          ------------    ------------
                                                            21,813,560      19,206,226

                 Unearned ESOP Shares                      (12,225,000)    (12,225,000)
                 Treasury stock                             (1,445,440)     (1,445,440)
                 Accumulated other comprehensive income            289         241,307
                                                          ------------    ------------
                          Total Shareholders' Equity         8,143,409       5,777,093
                                                          ------------    ------------

                                                          $ 40,079,441    $ 39,097,402
                                                          ============    ============
</TABLE>



  Note:       The balance sheet at January 31, 2001 has been taken from
              the audited consolidated financial statements at that date.

              See notes to condensed consolidated financial statements.


                                       4





<PAGE>


                  COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                           April 30,

                                                                                      2001           2000
                                                                                   -----------    -----------
<S>                                                                                <C>            <C>
OPERATING ACTIVITIES:

              Net loss                                                             $(4,592,666)   $(1,514,111)
              Adjustment for non-cash charges                                        2,215,742      1,480,679
              Gain on disposal of property and equipment                                    --         (1,975)
              Gain on sale of marketable securities                                   (263,101)            --
              Changes in assets and liabilities, net of effect of
              acquisition of Blink Data Corp.                                          790,104        127,353
                                                                                   -----------    -----------

              Net cash (used in) provided by operating activities                   (1,849,921)        91,946
                                                                                   -----------    -----------

INVESTING ACTIVITIES:

              Cash acquired in purchase of Blink Data Corp.                             90,402             --
              Proceeds on sale of marketable securities                                529,302             --
              Purchases of marketable securities                                      (603,869)            --
              Purchase of property and equipment                                    (3,061,155)      (783,348)
              Proceeds on sale of fixed assets                                              --          1,975
              Additions to deferred line installation costs                            (11,514)        (4,365)
                                                                                   -----------    -----------

              Net cash used in investing activities                                 (3,056,834)      (785,738)
                                                                                   -----------    -----------

FINANCING ACTIVITIES:

              Sale of Common Stock                                                   6,300,000             --
              Repayments of bank borrowings                                           (149,766)      (138,515)
                                                                                   -----------    -----------
              Net cash provided by (used in) financing activities                    6,150,234       (138,515)
                                                                                   -----------    -----------

NET INCREASE (DECREASE) IN CASH AND
              CASH EQUIVALENTS                                                       1,243,479       (832,307)

CASH AND CASH EQUIVALENTS,
              BEGINNING OF PERIOD                                                    2,691,889      4,374,479
                                                                                   -----------    -----------
CASH AND CASH EQUIVALENTS,
              END OF PERIOD                                                        $ 3,935,368    $ 3,542,172
                                                                                   ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH
              FLOW INFORMATION:

              Cash paid (received) during the period for:

                                           Interest                                $    18,005    $    29,255
                                           Income taxes                            $        --    $(1,643,227)
</TABLE>

            See notes to condensed consolidated financial statements



                                        5





<PAGE>


                  COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note A--Basis of Presentation

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. They do not include all information and notes
required by generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there has been no material
change in the information disclosed in the notes to the consolidated financial
statements included in the Annual Report on Form 10-K of Covista Communications,
Inc. (formerly Total-Tel USA Communications, Inc.) and Subsidiaries (the
"Registrant") for the fiscal year ended January 31, 2001. In the opinion of
Management, all adjustments (consisting of normal recurring accruals only)
considered necessary for a fair presentation have been included. Operating
results for the three-month period ended April 30, 2001 are not necessarily
indicative of the results that may be expected for the year ending January 31,
2002.

Note B -New Accounting Pronouncements

Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all fiscal years
beginning after June 15, 2000. SFAS 133, as amended, establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities. Under SFAS
133, certain contracts that were not formerly considered derivatives may now
meet the definition of a derivative. The Company adopted SFAS 133 effective
February 1, 2001. The adoption of SFAS 133 did not have a significant impact on
the financial position, results of operation, or cash flows of the Company.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements", which was
adopted during the quarter ending January 31, 2001. The implementation of SAB
101 did not have a material effect on the Company's financial position and
results of operations.

Note C -- Earnings Per Share

The following table sets forth the computation of basic and diluted loss per
common share:

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                     April 30, 2001  April 30, 2000
                                                     --------------  --------------
<S>                                                   <C>            <C>
Numerator:
         Loss available to
         Common Shareholders used in basic
              and diluted loss per Common Share       $(4,592,666)   $(1,514,111)
Denominator:
Weighted-average number of Common
         Shares used in basic loss per
         Common Share (1)                               8,247,989      7,294,454

         Effect of diluted securities:
                  Common share options (2)                     --             --
                                                      -----------    -----------
         Weighted-average number of Common
         Shares and diluted potential Common Shares
         used in diluted loss per Common Share          8,247,989      7,294,454
                                                       -----------    -----------
Basic loss per Common Share                           $     (0.56)   $     (0.21)
                                                      -----------    -----------
Diluted loss per Common Share                         $     (0.56)   $     (0.21)
                                                      -----------    -----------
</TABLE>

(1) 600,000 ESOP shares have not been included in the weighted average number of
Common Shares - See Note E

(2) Common Share options are not included in the calculation of diluted loss per
Common Share as doing so would be antidilutive due to the net loss


                                       6




<PAGE>


Note D -- Segment Reporting

         The Registrant sells telecommunication services to two distinct
segments: a retail segment, consisting primarily of small to medium size
businesses principally within the northeastern United States, and a wholesale
segment with sales to other telecommunications carriers throughout the world.

         In addition to direct costs, each segment is allocated a portion of the
Registrant's switch and operating expenses. The allocation of expense is based
upon the minutes of use flowing through the Registrant's switch network. There
are no intersegment sales. Assets are held at the consolidated level and are not
allocable to the operating segments. The Registrant evaluates performance on
operating earnings of the two business segments.

         Summarized financial information concerning the Registrant's reportable
segments is shown in the following table:

<TABLE>
<CAPTION>
                            Retail           Wholesale        Total
                            ------           ---------        -----
<S>                       <C>             <C>             <C>
Three Months Ended
April 30, 2001

Net Sales                 $ 11,810,321    $ 17,633,700    $ 29,444,021
Gross margin                 1,364,733       1,341,048       2,705,781

Operating loss              (3,699,123)     (1,164,043)     (4,863,166)

Three Monthd Ended
April 30, 2000

Net Sales                 $ 15,359,207    $ 16,432,655    $ 31,791,862
Gross margin                 3,244,297       2,095,530       5,339,827

Operating (loss) income     (2,009,150)        403,306      (1,605,844)
</TABLE>


Note E - Employee Stock Ownership Plan

On September 1, 1998, the Registrant established the TotalTel USA
Communications, Inc. Employee Stock Ownership Plan (the "ESOP Plan").
Concurrently with the establishment of the non-leveraged ESOP Plan, the
Registrant contributed 600,000 shares of its Common Stock to the ESOP Plan. The
Common Shares were recorded at fair value at the date contributed to the ESOP,
totaling approximately $12.2 Million, with an offset to Unearned ESOP Shares in
the Statement of Shareholders' Equity. The ESOP Plan is administered through a
Trust by a Trustee as designated by the Board of Directors. No shares have been
allocated from the ESOP Plan as of April 30, 2001.

In February 1999, the Registrant's Board of Directors authorized the termination
of the ESOP Plan. The IRS has given its approval to terminate the ESOP, and the
Registrant is in process of doing so. Upon termination of the ESOP Plan the
Registrant will receive the shares from the Trust and return the shares to the
authorized but unissued common stock.

NOTE F -Stock Option Repricing

On February 23, 2000, the Board of Directors passed a resolution allowing the
Registrant to re-price all outstanding options granted under its 1996 and 1999
Stock Option Plans. All outstanding options, approximately 243,000 net of
cancellations, which were originally granted at prices ranging from $14.63 to
$21.50 per share were re-priced to $14.25 per share. All other terms and
conditions, including vesting periods remained unchanged. The Registrant has
applied FASB Interpretation No. 44 "Accounting for Certain Transactions
Involving Stock Compensation" related to stock option repricing. During the
three months ended April 30, 2001, there has been no financial statement impact
based upon the market values of the Registrant's common shares.



                                       7




<PAGE>


NOTE G -Income Taxes

For the fiscal year ended January 31, 2000, the Registrant established a
valuation allowance against its net deferred tax asset due to the uncertainty of
realizing certain tax credits and loss carryforwards. In the quarter ended April
30, 2001, the Registrant continued this accounting treatment and recorded a full
valuation allowance against the net tax benefit arising from the quarter's net
operating loss. The result is that the net deferred tax asset of $9,346,174 is
fully offset by the valuation allowance, and as such does not appear as an asset
on the balance sheet. It will be reflected at full value when the net deferred
tax asset can be utilized in future periods.

NOTE H -Acquisition of Blink Data

On February 1, 2001, the Board of Directors of the Registrant authorized the
acquisition of Blink Data Corporation, a telecommunications service provider, of
which Kevin Alward, Chief Operating Officer of the Registrant, was a principal
shareholder, officer and director, for 300,000 shares of the Registrant's Common
Stock valued at the fair market value at March 29, 2001. The transaction was
completed on March 29, 2001, and was accounted for by the purchase method of
accounting. The purchase price of $900,000 was allocated principally to goodwill
that is being amortized over five years.

                 THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK


                                       8




<PAGE>


                  COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULT OF OPERATIONS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS:

         Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbor from
liability provided by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Registrant "believes",
"anticipates", "expects", or words of similar import. Similarly, statements
which describe the Registrant's future plans, objectives or goals are also
forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties which are described in close proximity to such
statements and which could cause actual results to differ materially from those
anticipated as of the date of this Report. Shareholders, potential investors and
other readers are urged to consider these factors in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included herein are
only made as of the date of this Report and the Registrant undertakes no
obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances, except as required under applicable laws.

Results of Operations

         Net sales were approximately $29,444,000 for the first three months of
the current fiscal year, a decrease of approximately $2,348,000 or 7.4% as
compared to the approximately $31,792,000 recorded in the first three months of
the prior fiscal year.

         Wholesale revenue for the three-month period increased to approximately
$17,634,000, an increase of approximately $1,201,000 or 7.3%. Wholesale minutes
sold in the three-month period ended April 30, 2001 were approximately
153,116,000 minutes, an increase of approximately 19,111,000 minutes or 14.3%.
The rate of revenue growth does not parallel the rate of volume growth because
of an 5.7% reduction of prices in the competitive wholesale market place, a
trend which the Registrant believes is likely to continue. The
telecommunications industry has recently experienced the failure of several
carriers, some of which were the Registrant's customers and / or suppliers.
During the current quarter, approximately $1,057,000 of billings was billed to
certain wholesale customers which have filed for bankruptcy protection. These
business failures have not only impacted the current year results, but may also
impact future results.

         Retail revenues for the three-month period were approximately
$11,810,000, a decrease of approximately $3,549,000 or 23.1%. Retail minutes
sold in the three-month period ended April 30, 2001 were approximately
145,319,000 minutes, a decrease of approximately 18,607,000 minutes or 11.3%.
Decreases in both the retail selling price and volume are attributed to the
intense price competition within the industry, and a decrease in the utilization
of the Registrant's facilities. The Registrant has experienced a reduction of
approximately 1.2 cents per minute or 12.9%, to an average billing rate per
minute of 8.1 cents during the current fiscal year. This rate decrease equates
to an approximately $1,805,000 reduction and the volume decrease equates to an
approximately $1,744,000 reduction in retail revenues. These two factors
combined account for the approximately $3,549,000 shortfall over the prior
year's three month revenue. Given the competitive climate in the long distance
telephone industry, management does not foresee that the trend will abate during
the remainder of the fiscal year.

         Cost of sales consist of access fees, line installation expenses,
switch expenses, Network Operations Center expenses, depreciation, transport
expenses, and local and long-distance expenses. Cost of sales for the current
three-month period was approximately $26,738,000, an increase of approximately
$286,000 or 1.1%. These changes were unfavorable in relation to the 7.4% decline
in sales for the three-month period. Included in cost of sales is approximately
$1,823,000 of unresolved disputed invoices from our vendors. These disputes,
along with approximately $1,060,000 costs for additional wholesale volume, are
partially offset by the reduced retail volume, approximating $1,202,000; and
reduced retail buy rates of approximately $1,392,000.

         The gross margin for the current quarter decreased to approximately
9.2% as compared to approximately 16.8% for the first three-months of the prior
fiscal year. Had the disputes, described above been settled favorably within the
quarter, the gross margin would have been approximately 15.4%. The decrease in
the gross margin is reflective of the disputed charges described above and the
higher mix of lower margin wholesale product compared to the higher margin
retail product, and the



                                       9




<PAGE>


continued decrease in the retail selling prices. The retail to wholesale mix for
the three-months ended April 30, 2001, was 40% to 60%. In the comparative prior
year's fiscal period, the retail to wholesale mix was 48% to 52%.

         Selling, general and administrative expense for the three-month period
increased to approximately $7,500,000, an increase of approximately $630,000, or
9.2%. This increase was primarily due to the increased provision for doubtful
accounts of approximately $603,000; additional costs of approximately $117,000
for severance expense in connection with the reduction in force that occurred
during the quarter ended April 30, 2001; increases in salary and wages of
approximately $237,000; additional depreciation expense for MIS and data related
equipment of approximately $62,000; additional expenditures for advertising and
promotion of approximately $64,000; and other net expenses of approximately
$13,000. Offsetting the increases were savings in commission expense of
approximately $369,000 due to the reduced sales volume; and a reduction of
consulting and recruiting expenses of approximately $97,000.

         Other compensation expense of approximately $69,000 for the three-month
period ended April 30, 2001 consisted of a non-cash charge for the amortization
of costs associated with certain stock grants issued in the fiscal year ended
January 31, 1999.

         For the reasons described above, the operating loss for the three-month
period ended April 30, 2001 was approximately $4,863,000, an increase in the
operating loss of approximately $3,257,000 from the three-month period ended
April 30, 2000.

         Total other income, net, for the current three-month period was
approximately $271,000 as compared to approximately $26,000 of total other
income, net, recorded in the prior year three-month period. The approximately
$245,000 change for the three-month period is primarily due to the sale of
marketable securities at a gain of approximately $263,000 and a reduction in
interest expense.

         Basic and Diluted loss per Common share was $.56 per share for the
three-month period ended April 30, 2001 as compared to $.21 loss per share for
the three-months ended April 30, 2000.

Liquidity and Capital Resources

         At April 30, 2001, the Registrant had negative working capital of
approximately $8,606,000, a decrease of approximately $872,000 as compared to
January 31, 2001. The ratio of current assets to current liabilities at April
30, 2001 decreased to 0.73:1, from the ratio of 0.76:1 at January 31, 2001. The
decrease in working capital at April 30, 2001 was primarily attributable to a
decrease in net accounts receivable of approximately $3,153,000; a decrease in
salaries and wages payable of approximately $388,000; a decrease in prepaid
expenses and other current assets of approximately $281,000; and the increase in
the current portion of long term debt of approximately $11,000. This was offset
by an increase in cash of approximately $1,243,000; the value of investments
available for sale of $97,000; and a decrease in accounts payable and accrued
liabilities of approximately $1,621,000.

         The increase in cash of approximately $1,243,000 resulted primarily
from the private sale of Common Stock for approximately $6,300,000; the proceeds
from the sale of marketable securities of approximately $529,000; the increase
in non-cash charges for depreciation and amortization of approximately $931,000;
the increase in the reserve for doubtful accounts of approximately $1,216,000;
non-cash compensation of approximately $69,000; the change in net assets and
liabilities of approximately $790,000; and the cash acquired in the purchase of
Blink Data Corp. of approximately $90,000. This was offset by the net loss of
approximately $4,593,000; purchase of capital additions of approximately
$3,061,000; the purchase of marketable securities of approximately $604,000, a
non-cash item credit for the gain on the sale of marketable securities of
approximately $263,000; the repayment of bank borrowings of approximately
$150,000; and additions to deferred line costs of approximately $11,000.

Capital Expenditures

         Capital expenditures for the three-month period ended April 30, 2001
were approximately $3,061,000. These expenditures were financed principally from
the sale of Common Stock. The major expenditures were for new switches to be
installed as part of the Registrant's network expansion, of approximately
$2,837,000; approximately $90,000 for software and hardware upgrades to the LAN;
approximately $89,000 for customer premises equipment; approximately $26,000 for
equipment to upgrade the New York Switch and approximately $19,000 for furniture
and fixtures and leasehold improvements. Planned spending for the balance of the
fiscal year ending January 31, 2002, includes approximately $6,000,000 for
additional switches to be installed as part of the Registrant's network
expansion. These expenditures are planned to be financed primarily through
vendor financing and additional lines of credit which the Registrant intends to
negotiate with its current lender or other sources. In addition the Registrant
may seek to sell privately, additional equity or debt securities.

                                       10




<PAGE>


Market Risk

         Market risk represents the risk of changes in value of a financial
instrument, derivative or non-derivative, caused by fluctuations in interest
rates, foreign exchange rates and equity prices. The Registrant's cash and
investments exceed long-term debt; therefore, the exposure to interest rate risk
relates primarily to the marketable securities held by the Registrant. The
Registrant invests only in instruments with high credit quality for which a
secondary market exists. The Registrant does not hold any derivatives related to
its interest rate exposure. The Registrant also maintains long-term debt at
fixed rates. Due to the nature and amounts of the Registrant's note payable, an
immediate 10% change in interest rates would not have a material effect in the
Registrant's results of operations over the next fiscal year. The Registrant's
exposure to adverse changes in foreign exchange rates also is immaterial to the
consolidated statements as a whole.


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<PAGE>


                  COVISTA COMMUNICATIONS, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1                     Not applicable

ITEM 2                     (a) (b) (d) Not Applicable

                           ( c ) Change in Securities and Use of Funds

                           Pursuant to authorization by the shareholders at a
                           Special Shareholders Meeting (see Item 4) the
                           Registrant issued 3,150,000 shares of Common Stock,
                           par value $.05 at a price of $2.00 per share. No
                           underwriter was involved in the transaction. The
                           issuance of these shares was exempt from registration
                           under the Securities Act of 1933, as amended, by
                           reason of the provisions of Section 4 (2), thereof
                           which exempts transactions by an issuer not involving
                           any public offering. The shares were issued as
                           follows:

<TABLE>
                              <S>                                                                             <C>
                                    Henry G. Luken III, Chairman of the Board and affiliate                   2,000,000
                                    A. John Leach,  Director, President and Chief Executive Officer             150,000
                                    Kevin Alward, Chief Operating Officer                                     1,000,000
</TABLE>

                           The proceeds of the sale were added to the
                           Registrant's general funds to be utilized for
                           additional working capital and the acquisition of
                           various telecommunications equipment.

ITEM 3                     Not applicable

ITEM 4                     Submission of matters to a vote of security holders

                           The following matters were submitted to, and voted
                           upon by, the Shareholders of the Registrant at a
                           Special Meeting of Shareholders held on March 29,
                           2001 in Little Falls, New Jersey:

                           To authorize and approve the Registrant's issuance
                           and sale of 3,500,000 shares of Registrant's Common
                           Stock, par value $.05, to three persons who are or
                           would become directors or officers of the Registrant.

                           The stockholders approved the proposal. 5,405,094
                           shares were voted for the proposal and 114,851 shares
                           were voted against the proposal.

ITEM 5                     Not applicable

ITEM 6                     Exhibits and reports on Form 8-K


                           (b)     There were no Reports on Form 8-K filed
                                   during the three months ended April 30, 2001.



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<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                          COVISTA COMMUNICATIONS, INC.

                                  (Registrant)

Date   June 13, 2001          By     /S/ A. John Leach
     ------------------              ------------------------------
                                     A. John Leach
                                     President and Chief Executive Officer

Date   June 13, 2001          By     /S/  Thomas P. Gunning
      -----------------              -------------------------------
                                     Thomas P. Gunning,
                                     Vice President, Chief Financial Officer and
                                     Principal Accounting Officer


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