SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

     (Mark One)

     [ X ]  QUARTERLY  REPORT  UNDER  SECTION  13 OR 15 (d)  OF  THE  SECURITIES
EXCHANGE ACT OF 1934

     For Quarter Ended: March 31, 1997; or

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

     For the transition period _________ to __________

     Commission File Number:   0-25632


                         GUINNESS TELLI*PHONE CORPORATION
               ---------------------------------------------------
             (Exact name of Registrant as specified in its charter)


          Nevada                                            68-0310550
--------------------------------                       ---------------------
(State or other jurisdiction of                          (I.R.S Employer
incorporation or organization)                          Identification No.)

655 Redwood Highway, #219, Mill Valley, California            94941
--------------------------------------------------          ----------
Address of principal executive offices)                     (Zip Code)


                                 (415) 389-9442
              ---------------------------------------------------
              (Registrant's telephone number, including area 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 a
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

     On March 31, 1997, there were 14,087,480 shares of the registrant's  Common
Stock, $.001 par value, outstanding.


<PAGE>


                        GUINNESS TELLI*PHONE CORPORATION
<TABLE>
<CAPTION>


                                      INDEX


PART I. -      Financial Information                                 Page No. 
------------------------------------------------------------------------------
               <S>                                                   <C> 
     Item 1.   Financial Statements                                   3

               Consolidated Balance Sheet
               March 31,1997 and December 31,1996                     4

               Consolidated Statement of Operarions -
               Three Months Ended March 31,1997 and 1996
               and Cumulative During Development Stage                5

               Consolidated Statement of Cash Flows                   6

               Note to Consolidated Financial Statements              7

    Item 2.    Management's Discussion and Analysis of
               Financial Condition and Results of Operations          8

PART II. -     Other Information

    Item 1.    Legal Proceedings                                      9

    Item 2.    Change in Securities                                   9

    Item 3.    Defaults Upon Senior Securities                        9

    Item 4.    Submission to Matters to a Vote of Security Holders    9

    Item 5.    Other Information                                      9

    Item 6.    Exhibits and Reports on Form 8-K                       9

</TABLE>

                                     Page 2

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements.

     The condensed  financial  statements  included herein have been prepared by
the  Company,  without  audit  pursuant  to the  rules  and  regulations  of the
Securities and Exchange Commission.  Certain information and footnote disclosure
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles have been condensed or omitted pursuant to such
rules and  regulations,  although the Company  believes that the disclosures are
adequate to make the information presented not misleading.

     In the opinion of the Company,  all adjustments,  consisting of only normal
recurring adjustments, necessary to present fairly the financial position of the
Company as of March 31,  1997 and the results of its  operations  and changes in
its financial position from inception through March 31, 1997 have been made. The
results of its operations for such interim period is not necessarily  indicative
of the results to be expected for the entire year.

                                     Page 3
<PAGE>


               GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
                          (A Development Stage Company)
                           Consolidated Balance Sheet
<TABLE>
<CAPTION>

                                          (Unaudited)
                                           March 31,           December 31,
                                             1997                  1996
                                          -----------           ---------
<S>                                       <C>                   <C>
ASSETS

CURRENT ASSETS:
      Cash                                $     18              $   9,805
      
      TOTAL CURRENT ASSETS                      18                  9,805
                                          --------              ---------
FIXED ASSETS:
      Equipment                             63,705                 60,118
      Less accumulated depreciation         33,045                 30,395
                                          --------               --------

                                            30,660                 29,723
                                          --------               --------

                                         $  30,678              $  39,528
                                          ========               ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
      Notes payable                      $ 435,000              $ 435,000
      Accounts payable                     648,688                630,733
      Accrued interest payable             468,332                446,300
      Deferred royalty income              125,000                125,000
                                         ---------              ---------

           TOTAL CURRENT LIABILITIES     1,677,020              1,637,033
                                        ----------             ----------

ADVANCES FROM STOCKHOLDERS                 -                      250,000      

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
      Common stock, $.001 par value; 
      authorized 25,000,000 shares, 
      issued and outstanding
      14,087,480 and 13,427,480 shares      14,087                 13,427
      Additional paid-in capital         8,686,506              8,363,766
      Deficit accumulated during
            development stage          (10,346,935)           (10,224,698)
                                        ----------             -----------

                                        (1,646,342)            (1,847,505)

                                        $   30,678             $   39,528
                                         ==========             ==========
</TABLE>

                                     Page 4

<PAGE>
                 GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
                          (A Development Stage Company)
                      Consolidated Statement Of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                          Cumulative
                            During           Three Months       
                          Development      Ended March 31, 
                             Stage        1997        1996      
                         ------------    -------     -------    
<S>                      <C>             <C>         <C>       
OPERATING EXPENSES:
 Research and 
    development ....     $4,551,152
Interest expense ...     $4,193,051     $ 22,032   $ 20,030   
Officer's salary ...        500,097       17,108      5,764     
Rent ...............        321,539        8,806      6,505     
Other administrative
 expense ...........        781,096       75,011     75,343     
                         ----------     --------  ----------  

NET LOSS               $(10,346,935)    (122,237)   (107,642)    
                        ============    =========  ==========  

LOSS PER SHARE                           $  (.01)   $   (.01)    
                                         ========  ==========  
WEIGHTED AVERAGE
 SHARES OUTSTANDING                    14,043,480  13,427,480 
                                       ==========  ==========  
</TABLE>

                                     Page 5

<PAGE>
                 GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
                          (A Development Stage Company)
                      Consolidated Statement Of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                    
                          Cumulative
                            During           Three Months       
                          Development      Ended March 31, 
                             Stage        1997        1996      
                         ------------    -------     -------    
<S>                      <C>             <C>         <C>             
CASH USED IN OPERATIONS:
  Net loss .........     $(10,346,935) $(122,237)  $(107,642)

  Adjustments to reconcile 
  net loss to cash used in 
  operations:,
   Depreciation .......      33,045        2,650       1,731   
   Increase in accounts 
   payable ............     648,688       17,955       5,764   
   Increase in accrued 
   interest ..........      468,332       22,032      20,030    
   Deferred royalty 
             income         125,000        --          --       

                         (9,071,870)     (79,600)    (80,117)   
                         ----------     ---------   ---------  

CASH USED IN INVESTING ACTIVITIES:
   Additions to fixed
               assets      ( 63,705)      (3,587)    (24,991) 


CASH PROVIDED BY (USED IN) FINANCING
 ACTIVITIES:
 Contributed capital      7,543,938         --        --
 Sale of stock              999,475       323,400
 Notes payable              435,000         --        --
 Stockholder advances         --          250,000     --    
 Collection of stock 
 subscriptions receivable   157,180         --       101,250
                         ----------     ---------   ---------  

                          9,135,593      73,400     101,250     
                         ----------     ---------   ---------   

NET INCREASE (DECREASE)
 IN CASH AND CASH 
 EQUIVALENTS ..........          18        (9,787)     (3,858)

CASH AND CASH EQUIVALENTS,
 BEGINNING OF YEAR             --           9,805      97,997   
                         ----------     ---------   ---------   

CASH AND CASH EQUIVALENTS,
 END OF YEAR             $       18      $     18    $ 94,139   
                        ===========     =========    ========  

</TABLE>

                                     Page 6

                 GUINNESS TELLI*PHONE CORPORATION AND SUBSIDIARY
                             (A Development Company)
                    Note To Consolidated Financial Statements



     Note  1.  In  the  opinion  of  the  management  of  Guinness   Telli*Phone
Corporation  and  Subsidiary,  the  unaudited  financial  statements of Guinness
Telli*Phone Corporation and Subsidiary for the interim periods shown include all
adjustments,  consisting only of normal recurring accruals, necessary for a fair
presentation  of the  financial  position at March 31, 1997,  and the results of
operations and cash flows for the periods then ended.  The results of operations
for the interim  periods  shown may not be indicative of the results that may be
expected for the fiscal year.  These  statements  should be read in  conjunction
with the financial  statements and notes thereto  included in the Company's Form
10-K for the year December 31, 1996.


                                     Page 7
<PAGE>


                 GUINNESS TELLI*PHONE CORPORATION AND SUBSID,IARY
                             (A Development Company)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Liquidity and Capital Resources:

     There have been no  significant  changes  in the  Company's  liquidity  and
capital resources since the Company filed its annual report on Form 10-K for the
year ended December 31, 1996.  Reference is made to that document with regard to
these matters.

     The  Company  has begun  negotiations  to raise the  necessary  capital  to
commence operations.


                                     Page 8
<PAGE>


                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

     At the present time there are no legal proceedings  against the Company and
the Company is unaware of any unasserted  claim or assessment  which will have a
material effect on the financial position or future operations of the Company.

Item 2.    Changes in Securities.

     Not required.

Item 3.    Defaults Upon Senior Securities.

     Not required.

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

     Not required.

Item 5.    Other Information.

     Not required.

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

     (a) No exhibits have been filed with this Form 10-Q.

     (b) With the  exception of the Current  Reports on Form 8-K dated March 12,
1997 and March 19, 1997, no other reports on Form 8-K were filed during the last
quarter of the period covered.


                                     Page 9

<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.

                                              GUINNESS TELLI*PHONE CORPORATION
                                                       (Registrant)


Date:  May 6, 1997                           /S/ Lawrence A. Guinness
                                             ----------------------------------
                                             By:  Lawrence A. Guinness
                                             Its: President



Date: May 6, 1997                            /S/ Arthur Korn
                                             ----------------------------------
                                             By:  Arthur Korn
                                             Its: Chief Financial Officer


                                    Page 10