UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                FORM 10-QSB

       (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended March 31, 2001

                                     OR

       ( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
           SECURITIES EXCHANGE ACT OF 1934

                        Commission file number 0-28330

                            TALK VISUAL CORPORATION
                            -----------------------
           (Exact name of registrant as specified in its charter)


            Nevada                              95-4561156
         ------                              ----------
(State or other jurisdiction of   (I.R.S. Employer Identification No.)
 incorporation or organization)

     3550 Biscayne Blvd. Ste 704
         Miami, FL                                33137
     ---------------------------                 -------
  (Address of principal executive offices)      (Zip Code)

                                305-572-0575
                               --------------
                (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 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
                                -----          ------

There were 91,106,043 shares outstanding of the registrant's Common Stock, par
value $.001 per share, as of May 8, 2001.

Transitional Small Business Disclosure Format (check one):

                            Yes            No    X
                                -----          ------
<PAGE>



                           TALK VISUAL CORPORATION

                                     INDEX
                                                                    Page No.

                        PART I - FINANCIAL INFORMATION

Item l. Financial Statements (Unaudited):

                Balance Sheets at March 31, 2001 and
                December 31, 2000.                                       3

                Statements of Operations for the three
                months ended March 31, 2001 and 2000.                    5

                Statements of Cash Flows for the three
                months ended March 31, 2001 and 2000.                    6

                Notes to Condensed Financial Statements                  8

Item 2.     Management's Discussion and Analysis or Plan
                 Of Operations                                          11

                        PART II - OTHER INFORMATION

Item 1.     Legal Proceedings                                           14
Item 6.     Exhibits and Reports on Form 8-K                            14

Signatures                                                              15

Exhibits
     Exhibit 11                                                         16



                                     Page 2
<PAGE>


                           TALK VISUAL CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEET

                                                  MARCH 31,      DECEMBER 31,
                                                    2001             2000
                                                  --------        -----------
                                                (unaudited)

                                   ASSETS

CURRENT ASSETS
   Cash and cash equivalents                    $   124,390       $    69,996
   Accounts receivable, net of allowances            82,491            98,716
   Other receivables                                 47,572           143,388
   Inventory                                        127,687           111,807
   Advances to related parties                      503,541           250,000
   Other current assets                             224,453           169,777
                                                 ----------        ----------
   Total current assets                           1,110,134           843,684

PROPERTY AND EQUIPMENT, net                      12,117,058        12,207,536

ADVANCES TO RELATED ENTITIES                        473,619           429,875

INVESTMENT IN EQUITY SECURITIES                     916,470           967,470

GOODWILL, NET                                       809,007           865,345

OTHER ASSETS                                        178,916           196,116
                                                 ----------        ----------
   TOTAL                                        $15,605,204       $15,510,026
                                                 ==========        ==========






            See notes to condensed consolidated financial statements.

                                    Page 3
<PAGE>

                            TALK VISUAL CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEET
                                 (continued)
<TABLE>
<CAPTION>

                                                      MARCH 31,      DECEMBER 31,
                                                        2001             2000
                                                      --------        -----------
                                                    (unaudited)

                    LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                 <C>               <C>
CURRENT LIABILITIES
    Cash overdraft                                  $    34,977       $      -
    Notes payable and current portion
     of long-term debt                                  263,857       $   292,822
    Accounts payable                                  1,201,466         1,107,458
    Accrued expenses                                    277,704           240,007
    Other current liabilities                           194,015           158,301
                                                     ----------        ----------
    Total current liabilities                         1,972,019         1,798,588

LONG-TERM DEBT, net of current portion                5,419,508         5,316,165
                                                     ----------         ---------
   TOTAL LIABILITIES                                  7,391,527         7,114,753
                                                     ----------         ---------

COMMITMENTS AND CONTINGENCIES                              -                 -

STOCKHOLDERS' EQUITY
    Series A convertible redeemable
      preferred stock - par value $.001 per
      share, 25,000,000 shares authorized; -0-
      and 50,000 shares issued and outstanding             -                   50

    Common Stock, par value $.001 per share,
      100,000,000 shares authorized; 91,106,043
      and 77,235,840 shares issued and outstanding       91,106            77,236

    Additional paid in capital                       23,079,007        22,310,104
    Accumulated deficit                             (14,161,254)      (13,172,634)
    Accumulated other comprehensive income (loss)         3,776           (20,525)
    Stock subscriptions receivable                     (798,958)         (798,958)
                                                     ----------        ----------
   Total Stockholders' Equity                         8,213,677         8,395,273
                                                     ----------        ----------
       TOTAL                                        $15,605,204       $15,510,026
                                                     ==========        ==========
</TABLE>




            See notes to condensed consolidated financial statements.

                                     Page 4
<PAGE>

                             TALK VISUAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

                                                  THREE MONTHS ENDED MARCH 31,
                                                  ----------------------------
                                                    2001                2000
                                                  --------            --------

REVENUE
Telecommunication services and
   product sales                                $  976,222          $   22,416
 Real estate revenues                              341,414             315,556
 Other income                                         -                  3,559
                                                ----------           ---------
Total revenue                                    1,317,636             341,531
                                                ----------           ---------
COSTS AND EXPENSES
 Cost of equipment sales, telecommunication
     and retail operation expenses               1,035,128             181,484
 Depreciation and amortization                     146,807              85,324
 Research and development                             -                 10,000
 Real estate operations                            118,208             104,597
 General, administrative and marketing             823,318             682,646
                                                ----------           ---------
Total costs and expenses                         2,123,461           1,064,051
                                                ----------           ---------
LOSS FROM OPERATIONS                            (  805,825)         (  722,520)
                                                ----------           ---------
OTHER INCOME (EXPENSE)
  Interest expense                              (  141,753)         (  180,304)
  Interest income                                       57                 310
  Foreign currency translation gain                 10,388                -
  Write down of equitable securities            (   51,000)               -
                                                ----------          ----------
                                                (  182,308)         (  179,994)
                                                ----------          ----------
LOSS BEFORE EXTRAORDINARY ITEM                  (  988,133)         (  902,514)

EXTRAORDINARY ITEM - DEBT RESTRUCTURING               -                122,347
                                                ----------          ----------
NET LOSS                                       $(  988,133)        $(  780,167)
                                                ==========          ==========

NET LOSS PER COMMON SHARE BASIC (1)

  BEFORE EXTRAORDINARY ITEM                    $     (0.01)        $     (0.03)
  EXTRAORDINARY ITEM                                     -                0.01
  NET LOSS PER COMMON SHARE                          (0.01)              (0.02)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING DURING THE PERIOD                   85,044,557          34,860,479
                                                ==========          ==========


(1) The effect of common stock options and warrants is excluded from diluted
earnings per share as its inclusion would be anti-dilutive for the three month
periods ended March 31, 2001 and 2000.



            See notes to condensed consolidated financial statements.

                                     Page 5
<PAGE>

                                TALK VISUAL CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)
<TABLE>
<CAPTION>

                                                        THREE MONTHS ENDED MARCH 31,
                                                        ----------------------------
                                                             2001           2000
                                                           --------       --------
<S>                                                      <C>            <C>
Cash Flows from Operating Activities:

Net Loss                                                 $(  988,133)   $(  780,167)

Adjustments to reconcile net loss to net cash
    used in operating activities:
  Depreciation and amortization                              146,807         85,323
  Amortization of product development costs                     -            12,000
  (Gain) loss on stock exchanged for debt                       -          (122,347)
  Loss on disposition of leasehold improvements               26,965           -
  Write down of investments                                   51,000           -
  Issuance of common stock in exchange for services             -            86,025

Increase (decrease) in cash from changes in:
   Accounts receivable, net                                   16,225        (61,615)
   Inventory                                                 (15,880)       (34,899)
   Other receivables                                          95,816        518,174
   Other current assets                                      (54,674)       (78,887)
   Cash Overdraft                                             34,976           -
   Accounts payable                                           94,008       (402,873)
   Accrued expenses                                           37,697       (158,329)
   Other current liabilities                                   8,084          6,173
                                                           ---------      ---------
      Net Cash from Operating Activities                    (547,109)      (931,422)
                                                           ---------      ---------
Cash Flows from Investing Activities:

   Purchase of property and equipment                        (12,009)      (166,665)
   Advances - related parties                               (297,285)      (114,233)
   Other                                                       5,010        (19,953)
                                                           ---------      ---------
      Net Cash from Investing Activities                    (304,284)      (300,851)
                                                           ---------      ---------
Cash Flows from Financing Activities:

   Borrowings on debt                                        190,380         54,567
   Payments on notes payable and long term debt              (14,354)      (480,898)
   Proceeds from exercise of options on common stock            -           593,500
   Collections on stock subscriptions receivable                -         1,908,790
   Sales of common stock                                     841,570           -
   Expenses of equity issues                                 (67,320)          -
   Other                                                        -           (81,861)
                                                           ---------      ---------
      Net Cash from Financing Activities                     950,276      1,994,098
                                                           ---------      ---------
Effect of exchange rate changes on cash                      (44,488)          -
                                                           ---------      ---------

Increase (decrease) in cash and cash equivalents              54,395        761,825
Cash and cash equivalents at beginning of period              69,996        287,156
                                                           ---------      ---------
Cash and cash equivalents at end of period                $  124,391     $1,048,981
                                                           =========      =========
</TABLE>



            See notes to condensed consolidated financial statements.

                                     Page 6
<PAGE>

                               TALK VISUAL CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (unaudited)
                                     (continued)

<TABLE>
<CAPTION>

                                                        THREE MONTHS ENDED MARCH 31,
                                                        ----------------------------
<S>                                                       <C>            <C>
Supplemental disclosure of cash flow information:            2001           2000
                                                             ----           ----
a. Cash paid during the period for:

       interest                                           $  141,753     $  180,304
                                                           ---------     ----------
       income taxes                                       $      800     $      800
                                                           ---------     ----------
</TABLE>


b. Noncash investing and financing transactions:
For the period ended March 31, 2000:

         Conversion of the Convertible Discounted Loan Notes into 495,000 shares
of common stock, previously issued, for the outstanding balance of the note in
the amount of $386,100.


For the period ended March 31, 2001:

     None



            See notes to condensed consolidated financial statements.

                                     Page 7
<PAGE>

                             TALK VISUAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

(1)  General and Summary of Business and Significant Accounting Policies

Basis of presentation

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of only normal recurring accruals)
considered necessary for a fair presentation of the Company's financial position
at March 31, 2001, the results of operations for the three months ended March
31, 2001 and March 31, 2000, and the cash flows for the three months ended March
31, 2001 and March 31, 2000 are included. Operating results for the three month
period ended March 31, 2001 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2001.

The information contained in this Form 10-QSB should be read in conjunction with
the audited financial statements as of December 31, 2000, filed as part of our
Annual Report on Form 10-KSB.

Loss Per Common Share

Loss per common share is calculated in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings per Share." Basic loss per
share is computed by dividing the loss available to common shareholders by the
weighted-average number of common shares outstanding. Diluted loss per share is
computed similar to basic loss per share, except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the additional
common shares were dilutive. For the three months ended March 31, 2001 and 2000,
common stock equivalents have been excluded from the aforementioned computations
as their effect would be anti-dilutive.

Income Taxes

We account for income taxes under the asset and liability method. Under this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. A valuation allowance is required when
it is less likely than not that the Company will be able to realize all or a
portion of its deferred tax assets.

(2) Financial Condition and Liquidity

Since inception, we have incurred significant net losses and we expect to
continue to incur losses and have negative working capital through the third
quarter of the current fiscal year. We are dependent on revenues from the real
estate operations, proceeds from investor stock subscriptions and short term and
long term borrowings to supplement retail videocalling and telecommunication
product sales for working capital needs, until the operating activities generate
sufficient cash flow to fund us.

We have signed an agreement to sell the Sacramento real estate property for
$8,250,000. If the sale consumates, we will receive about $3,500,000 in net
proceeds.

During this reporting period, we have closed unprofitable stores and have
reduced costs in the remaining stores and in other areas of our operations. The
benefits of these adjustments should be reflected in our second quarter
activities.

We have received, net of expenses, $554,410 from the sale of common stock under
the stock purchase agreement dated July 27, 2000 and $219,840 from the exercise
of warrants during the three month period ended March 31, 2001. Based upon the
current cash utilization rate and Management's plan for expansion, new products,
cost cutting measures, potential sale of the Sacramento real estate and stock
sales pursuant to the stock purchase agreement dated July 27, 2000, Management
believes that there should be sufficient capital to meet the needs of the
Company for the next twelve months.



                                     Page 8
<PAGE>

(3) Recent Sale of Equity Securities

The Company has issued and sold unregistered securities that have not been
previously reported as set forth below.

On January 3, 2001, we sold 1,163,273 shares of our common stock to Evertrend
Holdings Limited at an average purchase price of $0.0625 per share pursuant to a
common stock purchase agreement between us and Evertrend. Ladenburg Thalmann &
Co., Inc. received $5,818.00 in placement fees in connection with this
transaction. These securities were issued in a transaction exempt from
registration under the Securities Act of 1933 in reliance on Section 4(2) of the
Securities Act of 1933.

On January 17, 2001, we sold 3,853,740 shares of our common stock to Evertrend
Holdings Limited at an average purchase price of $0.0733 per share pursuant to a
common stock purchase agreement between us and Evertrend. In addition, we issued
to Evertrend a warrant to purchase 3,514,889 shares of our common stock at an
exercise price of $0.0687 per share until February 16, 2001. Ladenburg Thalmann
& Co., Inc. received $22,613 in placement fees and $30,000 in non-accountable
expense fees in connection with this transaction. These securities were issued
in a transaction exempt from registration under the Securities Act of 1933 in
reliance on Section 4(2) of the Securities Act of 1933.

On January 31, 2001 and February 14, 2001, we issued 3,200,000 shares of our
common stock from the exercise of warrants at $0.0687 per common share. These
securities were issued in a transaction exempt from registration under the
Securities Act of 1933 in reliance on Section 4(2) of the Securities Act of
1933.

On March 2, 2001, we sold 1,986,352 shares of our common stock to Evertrend
Holdings Limited at an average purchase price of $0.0629 per share pursuant to a
common stock purchase agreement between us and Evertrend. Ladenburg Thalmann &
Co., Inc. received $10,000 in placement fees in connection with this
transaction. These securities were issued in a transaction exempt from
registration under the Securities Act of 1933 in reliance on Section 4(2) of the
Securities Act of 1933.

On March 19, 2001, we issued 324,750 shares of our common stock from the
exercise of warrants at $0.501 per common share. These securities were issued in
a transaction exempt from registration under the Securities Act of 1933 in
reliance on Section 4(2) of the Securities Act of 1933.

On March 20, 2001, we sold 2,493,898 shares of our common stock to Evertrend
Holdings Limited at an average purchase price of $0.0501 per share pursuant to a
common stock purchase agreement between the Company and Evertrend. In addition,
we issued to Evertrend a warrant to purchase 2,240,125 shares of our common
stock at an exercise price of $0.0558 per share until April 18, 2001. Ladenburg
Thalmann & Co., Inc. received $10,000 in placement fees in connection with this
transaction. These securities were issued in a transaction exempt from
registration under the Securities Act of 1933 in reliance on Section 4(2) of the
Securities Act of 1933.

(4) Segment Information

The Company's reportable operating segments consist of real estate and
telecommunication services. The summary of the operating segment information is
as follows:

                              Rental          Telecom         Total
                            ----------      ----------      ----------
March 31, 2001
Net revenue                 $  341,414      $  976,222      $1,317,636
Depreciation/amortization       62,723          84,084         146,807
Operating Income (loss)         16,094      (1,004,227)     (  988,133)
Assets, net                  9,525,404       6,079,800      15,605,204

March 31, 2000
Net revenue                    315,556          25,975         341,531
Depreciation/amortization       58,622          26,702          85,324
Income (loss)before
 extraordinary item            120,973      (  843,493)     (  722,520)
Assets, net                 10,818,778       3,547,109      14,365,887


(5) Contingencies

The Company is involved in certain claims arising in the normal course of
business. An estimate of the possible loss resulting from these matters cannot
be made; however, we believe that the ultimate resolution of these matters will
not have a material adverse effect on our financial position or results of
operations.



                                     Page 9
<PAGE>

(6) Subsequent Events

On April 26, 2001, we signed an agreement of sale for our property in
Sacramento, California. The sale price is $8,250,000, and settlement is
anticipated to occur during the second quarter of 2001.

On May 7, 2001, we announced the rollout of a new product - Instant
International Service for Wireless/Cellular Users. This product permits cellular
phones to access international termination points at prices equal to or better
than those of calling cards. This product is being deployed through a network of
dealers and direct sales efforts. We expect this product to generate immediate
cash flow to be used for operations.

On May 9, 2001, we began marketing an internet stand alone videophone. This
desktop videophone works directly on a network or DSL connection and permits
both voice and video communication through the worldwide web environment.










                                     Page 10
<PAGE>

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except for historical information contained herein, the statements in this
report (including without limitation, statements indicating that the Company
"expects," "estimates," anticipates," or "believes" and all other statements
concerning future financial results, product offerings, proposed acquisitions or
combinations or other events that have not yet occurred) are forward-looking
statements that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange
Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as
amended. Forward-looking statements involve known and unknown factors, risks and
uncertainties which may cause the Company's actual results in future periods to
differ materially from forecasted results. Forward looking statements are all
based on current expectations, and the Company assumes no obligation to update
this information.

BUSINESS AND ORGANIZATION

Talk Visual Corporation and its subsidiaries (collectively the "Company", "us"
or "we"), provide videocalling services through our wholly owned retail stores
in the United States and joint venture partners in Europe, Israel, Canada, Asia
and South America. Additionally, we sell telecommunications services and
equipment through our retail outlets and over the internet. Through our wholly
owned subsidiaries, we own and operate commercial properties located in
Sacramento, California and Toronto, Canada.

GENERAL

Under current economic and market conditions, we have sought to focus our
resources on improving operations to reach profitability and serving our niche
market of the expatriate consumer with high quality audio and video
telecommunications. With the successful installation of our frame relay network
out of New York and New Jersey we have been able to improve the delivery and
profitability of our internationally bound traffic from our New York and New
Jersey retail call centers to our switch in Miami, Florida. The success of our
frame relay network has served as a model to sell this service to other call
shops in the New York and New Jersey market areas. We have also been
concentrating marketing efforts to expand our video calling bridging services.
With the introduction of the new IP videotelephone in concert with our bridging
services, we anticipate expanded activity involving the connection of IP based
video calls with existing ISDN based origination or termination equipment.

Recently, we have rolled out a new product, Instant International Service for
Cellular users. This product allows any wireless phone to connect an
international call at very competitive rates. This product is built around the
capabilities of our NACT switch and the support systems we have developed for
it.

RISK FACTORS

We have pursued, are currently pursuing and, in the future may pursue, new
technologies and businesses internally and through acquisitions and combinations
which involve significant risks. Any such acquisition or combination may
involve, among other things, the issuance of equity securities, the payment of
cash, the incurrence of contingent liabilities and the amortization of expenses
related to goodwill and other intangible assets, and transaction costs, which
have adversely affected, or may adversely affect, our business, results of
operations and financial condition. Our ability to integrate and organize any
new businesses and/or products, whether internally developed or obtained by
acquisition or combination, will likely require significant expansion of our
operations. There is no assurance that we will have or be able to obtain the
necessary resources to satisfactorily effect such expansion, and the failure to
do so could have a material adverse effect on our business, financial condition
and results of operations. In addition, future acquisitions and/or combinations
by us involve risks of, among other things, entering markets or segments in
which we have no or limited prior experience, the potential loss of key
employees of the acquired company and/or difficulty, delay or failure in the
integration of the operations, management, personnel and business of any such
new business with the Company's business and operating and financial
difficulties of any new or newly combined operations, any of which could have a
materially adverse effect on our business, financial condition and results of
operations. Moreover, there can be no assurance that the anticipated benefits of
any specific acquisition or of any internally developed new business segment or
business combination will be realized.


                                     Page 11
<PAGE>

RESULTS OF OPERATIONS

For the three months ended March 31, 2001 compared to the three
---------------------------------------------------------------
months ended March 31, 2000.
----------------------------

Telecommunication services and product sales increased from $22,416 for the
three months ended March 31, 2000 to $976,222 for the three months ended March
31, 2001. This increase of $953,806 is attributable to the acquired New York and
New Jersey call shops of our subsidiary, Mundo Express of New York, Ltd. Cost of
equipment sales, telecommunication and retail operation expenses increased in
the amount of $853,644, from $181,484 for the three months ended March 31, 2000
to $1,035,128 for the three months ended March 31, 2001. This increase in costs
is also attributable to the acquired stores and is attributable to the closing
of seven retail stores outside of the New York/New Jersey operation.

General, administrative and marketing expense is comprised of the following
items:

                                                       March 31,
                                                 ---------------------
                                                  2001           2000
                                                 ------         ------
          Salaries and benefits               $  250,115     $  149,792
          Consultants                             76,088         40,500
          Legal and other professional           103,283        156,701
          Marketing and public relations          74,610        106,677
          Rents                                   38,893         27,500
          Travel                                  53,841         60,752
          Other general and administrative       226,488        140,724
                                               ---------      ---------
                     Total                    $  823,318     $  682,646
                                               =========      =========

The increase in salaries and benefits resulted from increased staffing to
support the sales, switch and store administration activities.

Interest expense decreased $38,551 from $180,304, for the three months ended
March 31, 2000 to $141,753 for the three months ended March 31, 2001. This
decrease was a result of lowered borrowing costs on the mortgage of the
California property and the payment of notes incurred in the development of
videocalling activities.

LIQUIDITY AND CAPITAL RESOURCES

We have incurred significant net losses for the years 2000 and 1999 and for the
three months ended March 31, 2001. We expect to continue to incur losses and
have negative working capital into the third quarter of 2001. We are dependent
on retail videocalling and telecommunication product sales, revenues from the
real estate operations, investor stock subscriptions, equity draws under the
stock purchase agreement dated July 27, 2000 and short term and long term
borrowings for working capital needs, until the operating activities generate
sufficient cash flow to fund the Company.

Management has undertaken to reduce operating costs and develop revenue sources
to reach break even or profitability by the third quarter of this year. To that
end, we have reduced our workforce by 13 percent since the beginning of the
year, closed our Boston location, four of our Miami locations, and our San
Francisco and Sacramento locations. We anticipate that our stores will show a
net contribution to cash flow in the second quarter. We have discontinued
several outside service contracts and reduced our net monthly cash outflow by
thirty percent. In the effort to increase revenues, we have expanded product
offerings in our retail stores and launched the following new products and
services:

         - International access for cellular phones,
         - Low cost long distance service for select businesses located in areas
           with no access costs to our switch, and
         - Internet video and telephone desktop unit.

On July 28, 2000, we signed a Common Stock Purchase Agreement with a private
equity investor pursuant to an equity line agreement. The private investor has
committed to purchase up to $15 million of our common stock, subject to the
effectiveness of a Registration Statement which was filed with the Securities
and Exchange Commission, and became effective October 31, 2000. The issuance of
the common stock to the private investor under the Common Stock Purchase
Agreement is not registered under the Securities Act of 1933. However, we filed
a Registration Statement on Form SB-2 covering the resale of the shares by the
investor. Draws under the Common Stock Purchase Agreement may be in increments
of up to $1.5 million. At March 31, 2001, we have sold 16,834,686 shares of
common stock under the stock purchase agreement for net proceeds of $1,168,010
after payment of commissions and expenses.

                                     Page 12
<PAGE>

On April 26, 2001, we signed an agreement of sale for our property in
Sacramento, California. The sale price is $8,250,000, and settlement is
anticipated to occur during the second quarter of 2001. It is anticipated that
we will receive net proceeds of about $3,500,000 from this sale. If this sale is
successfully consumated, management anticipates no further need to sell common
stock under the Common Stock Purchase Agreement mentioned above.

We also have a funding agreement by the preferred stockholders to purchase one
dollar of common shares per preferred share converted to common shares after the
first 3,348,500, for a total commitment of $13,365,881. Under this agreement,
amounts contributed are treated as a stock purchase at a price equal to the
average price for the three trading days prior to funding less a twenty five
percent discount. As of March 31, 2001, the preferred shareholders had
contributed $3,205,000 toward that commitment.

Based upon the current cash utilization rate and Management's plan for cost
cutting and increased revenue, Management believes that together with the Common
Stock Purchase Agreement of July 27, 2000, the sale of the Sacramento real
estate and the preferred shareholder's funding agreement, there should be
sufficient capital reserves to meet the needs of the Company for the next twelve
months and beyond.

On January 3, 2001, in connection with the YAK Communications, (USA) Inc.
proposed transaction, we transferred in trust, the stock of our subsidiary,
Ontario International Property Corporation, to a corporation controlled by the
principals of YAK Communications, (USA) Inc. The subsidiary was transferred back
to us on February 5, 2001. While in the control of YAK Communications, (USA)
Inc. shareholders, a mortgage, in the amount of $190,000, was placed on the
property and cash in bank of about $5,000 was withdrawn. These amounts are
considered additional advances to YAK Communications, (USA) Inc. and total, in
combination with other advances, $503,541 at March 31, 2001. We have been
advised that YAK Communications, (USA) Inc. will undertake a repayment program
to return these funds to us over the next twelve months.

We had $547,109 in cash outflows from operating activities for the three months
ended March 31, 2001, compared to cash outflows of $931,422 for the three months
ended March 31, 2000. This decrease in outflows of $384,313 primarily resulted
from the increase in accounts payable and accrued expenses.

Net cash from financing activities amounted to $950,276 for the three months
ended March 31, 2001, and $1,994,098 for the three months ended March 31, 2000.
This decrease of $1,043,822, resulted from the collection on stock subscriptions
in the three months ended March 31, 2000 which did not occur in the three months
ended March 31, 2001.







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<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS


         We are not currently involved in any litigation that is expected to
have a material adverse effect on our business or financial position. There can
be no assurance, however, that third parties will not assert infringement or
other claims against us in the future which, regardless of the outcome, could
have an adverse impact on the Company as a result of defense costs, diversion of
management resources and other factors.


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

(a)      The following exhibits are included herewith:

         Exhibit 11 - Computation of Weighted Average Common Stock Shares
                      Outstanding

(b)      The Company filed the following reports on Form 8-K during the quarter
         for which this form is filed:

            None


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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.


Date:  May 15, 2001                    TALK VISUAL CORPORATION


                                        /s/ CLINTON H. SNYDER
                                        ------------------
                                        Clinton H. Snyder
                                        Chief Financial Officer
                                        (Duly Authorized Officer and Principal
                                        Financial and Accounting Officer)



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