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 September 30, 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 109,081,837 shares outstanding of the registrant's Common Stock, par
value $.001 per share, as of November 12, 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 September 30, 2001 and
                December 31, 2000.                                       3

                Statements of Operations for the three
                months ended September 30, 2001 and 2000, and
                for the six months ended September 30, 2001 and 2000.    5

                Statements of Cash Flows for the nine
                months ended September 30, 2001 and 2000.                6

                Notes to Condensed Financial Statements                  8

Item 2.     Management's Discussion and Analysis or Plan
                 Of Operations                                          12

                        PART II - OTHER INFORMATION

Item 1.     Legal Proceedings                                           17

Item 4.     Submission of Matters to a Vote of Security Holders         17

Item 6.     Exhibits and Reports on Form 8-K                            17

Signatures                                                              18

Exhibits
     Exhibit  3                                                         19
     Exhibit 11                                                         20


2

<PAGE>


                           TALK VISUAL CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEET

                                               SEPTEMBER 30,      DECEMBER 31,
                                                    2001             2000
                                               ------------       -----------
                                   (unaudited)

                                   ASSETS

CURRENT ASSETS
   Cash and cash equivalents                    $   183,357       $    69,996
   Accounts receivable, net of allowances           194,471            98,716
   Other receivables                                137,645           143,388
   Inventory                                         70,862           111,807
   Advances to related parties                            -           250,000
   Other current assets                             134,407           169,777
                                                 ----------        ----------
   Total current assets                             720,742           843,684

PROPERTY AND EQUIPMENT, net                       9,938,812        12,207,536

ADVANCES TO RELATED ENTITIES                        258,586           429,875

INVESTMENT IN EQUITY SECURITIES                   1,379,311           967,470

GOODWILL, NET                                       781,375           865,345

OTHER ASSETS                                        168,582           196,116
                                                 ----------        ----------
   TOTAL                                        $13,247,408       $15,510,026
                                                 ==========        ==========





               See notes to condensed consolidated financial statements.

3
<PAGE>



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

                                                   SEPTEMBER 30,     DECEMBER 31,
                                                        2001             2000
                                                   ------------       -----------
                                                    (unaudited)

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Notes payable and current portion
<S>                                                 <C>               <C>
     of long-term debt                              $   193,767       $   292,822
    Accounts payable                                  1,677,051         1,107,458
    Accrued expenses                                    374,234           240,007
    Other current liabilities                           368,299           158,301
                                                     ----------        ----------
    Total current liabilities                         2,613,351         1,798,588

LONG-TERM DEBT, net of current portion                4,383,751         5,316,165
                                                     ----------         ---------
   TOTAL LIABILITIES                                  6,997,102         7,114,753
                                                     ----------         ---------

COMMITMENTS AND CONTINGENCIES                                 -                 -

STOCKHOLDERS' EQUITY
    Series A convertible redeemable
      preferred stock - liquidation value $1 per share, 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,
      500,000,000 shares authorized; 105,695,191
      and 77,235,840 shares issued and outstanding      105,695            77,236

    Additional paid in capital                       22,822,247        22,310,104
    Accumulated deficit                             (16,677,636)      (13,172,634)
    Accumulated other comprehensive loss                      -           (20,525)
    Stock subscriptions receivable                            -          (798,958)
                                                     ----------        ----------
   Total Stockholders' Equity                         6,250,306         8,395,273
                                                     ----------        ----------
       TOTAL                                        $13,247,408       $15,510,026
                                                     ==========        ==========
</TABLE>





               See notes to condensed consolidated financial statements.

4
<PAGE>


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

                                                THREE MONTHS ENDED SEPT 30,        NINE MONTHS ENDED SEPT 30,
                                               ---------------------------         --------------------------
                                                 2001              2000                2001            2000
                                               ---------         ---------         ----------     -----------

REVENUE
   Telecommunication services
<S>                                           <C>                <C>               <C>            <C>
      and product sales                       $1,469,070         $ 783,003         $3,511,150     $   893,042
   Real estate revenue                           280,945           264,011            867,007         757,733
                                               ---------         ---------          ---------     -----------

Total revenue                                  1,750,015         1,047,014          4,378,157       1,650,775
                                               ---------         ---------          ---------     -----------

COSTS AND EXPENSES
   Cost of equipment sales, telecommunication
      and retail operation expenses            1,463,585         1,193,095          3,543,478       1,669,780
   Depreciation and amortization                 129,620           121,249            402,766         286,963
   Research & product development                      -                 -                  -          10,000
   Real estate operations                        164,190           199,167            393,992         411,339
   General & administrative                      469,601           580,495          1,432,231       1,399,526
   Consulting services                            53,079               560            226,877         182,021
   Legal and accounting                           26,558            77,372            186,044         397,841
   Marketing                                      73,028           110,127            185,649         474,046
   Write off of investments/advances in foreign
    operations and store closing expenses        116,320                 -            569,054               -
                                               ---------         ---------          ---------     -----------

Total costs and expenses                       2,495,981         2,282,065          6,940,091       4,831,516
                                               ---------         ---------          ---------     -----------

LOSS FROM OPERATIONS                            (745,966)       (1,235,051)        (2,561,934)     (3,180,741)
                                               ---------         ---------          ---------     -----------
OTHER INCOME (EXPENSE)
     Interest expense and fees                  (130,906)         (156,487)          (475,409)       (453,232)
     Interest income                                  43                68                142             667
     Write down of equity securities                   -                 -            (51,000)              -
                                               ---------         ---------          ---------     -----------
                                                (130,863)         (156,419)          (456,861)       (452,565)
                                               ---------         ---------          ---------     -----------
LOSS FROM CONTINUING OPERATIONS               (  876,829)       (1,391,470)        (3,088,201)     (3,633,306)

(Loss) Income from Discontinued Operation              -            12,845             (1,189)         55,447
Loss on the sale of subsidiary                         -                 -           (492,766)              -
                                               ---------         ---------          ---------     -----------
                                                       -            12,845           (493,955)         55,447

LOSS BEFORE EXTRAORDINARY ITEM                (  876,829)       (1,378,625)        (3,582,156)     (3,577,859)

EXTRAORDINARY ITEM - DEBT RESTRUCTURING           72,068                 -             72,068         122,347
                                               ---------         ---------          ---------     -----------
NET LOSS APPLICABLE TO COMMON SHARES         $(  804,761)      $(1,378,625)       $(3,510,088)    $(3,455,512)
                                               =========         =========          =========     ===========
NET LOSS PER COMMON SHARE BASIC (1)
      CONTINUING OPERATIONS                       ($0.01)          ($0.02)            ($0.03)         ($0.08)
      DISCONTINUED OPERATIONS                          -            $0.00             ($0.00)          $0.00
      BEFORE EXTRAORDINARY ITEM                   ($0.01)          ($0.02)            ($0.03)         ($0.08)
      EXTRAORDINARY ITEM                               -                -              $0.00           $0.00
           NET LOSS PER COMMON SHARE (1)          ($0.01)          ($0.02)            ($0.03)         ($0.08)

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING DURING THE PERIOD         102,871,003        57,011,342         93,427,319      45,302,236
</TABLE>

(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
and nine month periods ended September 30, 2001 and 2000.
               See notes to condensed consolidated financial statements.

5
<PAGE>


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

                                                          NINE MONTHS ENDED SEPT 30,
                                                          --------------------------
                                                             2001           2000
                                                           --------       --------
Cash Flows From Operating Activities:
<S>                                                      <C>            <C>
Net Loss                                                 $(3,510,088)   $(3,455,512)

Adjustments to reconcile net loss to net cash
       used in operating activities:
  Depreciation and amortization                              402,766        315,879
  Amortization of product development costs                        -         12,000
  Loss on discontinued operation                             493,955              -
  Write off of advances to foreign operations                474,653              -
  (Gain) loss on debt exchange                               (72,068)      (122,347)
  Loss on equipment dispositions                              40,158              -
  Write off of intangibles                                     5,089              -
  Write down of investments                                   51,000              -
  Issuance of common stock in exchange for services           53,900        150,799

Increase (decrease) in cash from changes in:
   Accounts receivable, net                                  (95,755)      (103,856)
   Inventory                                                  40,945       (121,315)
   Other receivables                                           5,743        (25,256)
   Other current assets                                       35,052       (243,373)
   Accounts payable                                          529,589        (35,209)
   Accrued expenses                                          134,227        (73,430)
   Other current liabilities                                 209,998         34,131
                                                           ---------      ---------
      Net Cash from Operating Activities                  (1,200,836)    (3,667,489)
                                                           ---------      ---------
Cash Flows From Investing Activities:

   Purchase of property and equipment                       (121,373)      (757,440)
   Advances - related parties                                (23,006)        65,773
   Acquisition of retail stores                                    -       (350,000)
   Proceeds from sale of discontinued operation              286,751              -
   Deposits and other                                          3,185        (93,754)
                                                           ---------      ---------
      Net Cash from Investing Activities                     145,557     (1,135,421)
                                                           ---------      ---------
Cash Flows from Financing Activities:

   Borrowings on debt                                              -        111,533
   Payments on notes payable and long term debt              (22,035)      (549,537)
   Proceeds from exercise of options on common stock               -        593,500
   Collections on stock subscriptions receivable                   -      1,921,290
   Proceeds from private placements of common stock           60,000      3,045,000
   Sales of common stock, net of expenses                  1,129,833              -
   Other                                                         842       (120,270)
                                                           ---------      ---------
      Net Cash from Financing Activities                   1,168,640      5,001,520
                                                           ---------      ---------
Increase (decrease) in cash and cash equivalents             113,361        198,610
Cash and cash equivalents at beginning of period              69,996        287,156
                                                           ---------      ---------
Cash and cash equivalents at end of period                $  183,357     $  485,766
                                                           =========      =========
</TABLE>

           See notes to condensed consolidated financial statements.

6
<PAGE>

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

                                                          NINE MONTHS ENDED SEPT 30,
                                                          --------------------------
Supplemental disclosure of cash flow information:            2001           2000
                                                             ----           ----
a. Cash paid during the period for:

<S>                                                       <C>            <C>
       interest                                           $  324,353     $  423,681
                                                           ---------     ----------
       income taxes                                       $      -0-     $    5,970
                                                           ---------     ----------
</TABLE>

b. Noncash investing and financing transactions:
For the period ended September 30, 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.

     Cashless exercise of an Option to purchase 900,000 shares of common stock
at $0.25 per share, at a market price of $3.875 for a total issue of 841,935
shares

     Exercise of Options to purchase 1,750,000 shares of common stock at $0.4375
per share in exchange for notes receivable in the amount of $765,625.

     Issuance of 3,000,000 shares of common stock pursuant to a joint venture
agreement with EnterTech Media Group for 3,333,333 shares of EnterTech Media
common stock at a total value of $1,078,200.

     Issuance of 1,066,718 shares of common stock under the terms of the
acquisition of eleven retail stores in New York and New Jersey from Various
Business Management Corporation at a total value of $550,000.



For the period ended September 30, 2001:

     Conversion of note receivable in the amount of $462,841 from YAK
Communications to an equity investment in YAK Communications.

     Issuance of 1,103,448 shares of common stock in cancellation of accounts
payable in the amount of $40,000, as part of a total issuance of 2,482,759
shares.

     Cancellation of notes receivable in the amount of $765,625 and the return
to treasury of 1,750,000 shares from the cancellation of exercised options.

     Issuance of 100,000 shares of common stock for services in the amount of
$3,900.


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 September 30, 2001, the
results of operations for the nine months ended September 30, 2001 and September
30, 2000, and the cash flows for the nine months ended September 30, 2001 and
September 30, 2000 are included. Operating results for the nine month period
ended September 30, 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 the
Company's Annual Report on Form 10-KSB.

Certain prior-year amounts have been reclassified to conform to the current-year
presentation. These reclassifications had no effect on the results of operations
or shareholders' equity as previously reported.


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 nine months ended September 30, 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 we will be able to realize all or a portion of
our deferred tax assets.

Recent Accounting Developments

In June 2001, the Financial Accounting Standards Board (the "FASB") issued SFAS
No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets" (collectively the "Standards"). The Standards will be
effective for fiscal years beginning after December 15, 2001. SFAS No. 141 will
require companies to recognize acquired identifiable intangible assets
separately from goodwill if certain conditions are met. The Standards will
require the value of separately identifiable intangible assets to be measured at
fair value. SFAS No. 142 will require that goodwill not be amortized, but that
amounts recorded as goodwill be periodically tested for value impairment.

8
<PAGE>

Upon adoption of SFAS No. 142, if the value of goodwill is determined to be
impaired, we will be required to reduce goodwill through a charge to
earnings. There will be no financial statement impact on our financial
statements related to the Standards in fiscal year 2001. Based on the current
levels of goodwill, the adoption of the Standards in fiscal 2002 would decrease
annual amortization expense by approximately $90,500 through the elimination of
goodwill amortization. The Company has not yet determined the impact of the new
goodwill impairment standards.

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets". This statement
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. SFAS No. 144 will be effective for financial statements of
fiscal years beginning after December 15, 2001. We expect to adopt this
statement for our fiscal year ending December 31, 2002. We are currently
evaluating the effect that adoption of the provisions of SFAS No. 144 will have
on our consolidated financial results.

The EITF has reached a consensus on Issue No. 00-14, "Accounting for Certain
Sales Incentives". This consensus addresses when sales incentives and discounts
should be recognized, as well as where the related revenues and expenses should
be classified in a registrant's financial statements. We do not anticipate the
adoption of the EITF to have a material impact on our consolidated financial
results.


Discontinued Operation
----------------------
Sale of The Ontario International Property Corporation

On June 6, 2001, we completed the sale of our interest in The Ontario
International Property Corporation ("TOIPC"). The sale of TOIPC resulted in a
net, after tax loss of $492,766.

A summary of the amounts for the nine months ended September 30, 2001, and for
the nine months ended September 30, 2000 are as follows:

                                            9/30/01           9/30/00
                                           ---------          ---------
TotalRevenue                              $   75,458         $  196,697
Total Expenses                                76,646            141,250
Income (Loss) From Operations                 (1,188)            55,447
Net Income (Loss) Applicable to
     Common Shares                            (1,188)            55,447
Net Income (Loss) per Common Share
     Basic and Diluted                       ($0.000)            $0.001
Assets, net                                1,938,928          1,988,442


9
<PAGE>

(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. 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.

During this reporting period, we have closed the remaining unprofitable stores
and have reduced costs in all areas of our operations. We have received, net of
expenses, $867,210 from the sale of common stock under the stock purchase
agreement dated July 27, 2000 and $284,225 from the exercise of warrants during
the nine month period ended September 30, 2001. Based upon the current cash
utilization rate and Management's plan for expansion, new products, cost cutting
measures, potential sale or refinancing 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.


(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 July 30, 2001, we sold 6,201,835 shares of our common stock to Evertrend
Holdings Limited at an average purchase price of $0.0323 per share pursuant to a
common stock purchase agreement between us and Evertrend. In addition, we issued
to Evertrend a warrant to purchase 3,100,918 shares of our common stock at an
exercise price of $0.0322 per share until September 28, 2001. Ladenburg Thalmann
& Co., Inc. received $16,000 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 July 10, 2001, we issued 1,851,518 shares of our common stock upon the
exercise of warrants at $0.0378 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.


(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
                            ----------      ----------      ----------
September 30, 2001
Net revenue                 $  867,007      $3,511,150      $4,378,157
Depreciation/amortization      156,875         245,891         402,766
Operating Income (Loss)        253,440      (2,815,374)     (2,561,934)
Assets, net                  8,847,028       4,400,380      13,247,408

September 30, 2000 (restated to give effect to discontinued operation)
Net revenue                    757,733         893,042       1,650,775
Depreciation/amortization      153,382         133,507         286,889
Operating Loss                (255,287)     (3,378,019)     (3,633,306)
Assets, net                  8,975,587       5,801,075      14,776,662


10
<PAGE>


(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, the Company believes that the ultimate resolution of these
matters will not have a material adverse effect on its financial position or
results of operations.

(6) Extraordinary Item - Debt Settlement

On August 9, 2001, a settlement agreement was executed between Legacy
Interactive and Talk Visual Corporation, Michael Zwebner and Ariella Lehrer.
Under the agreement, in exchange for mutual release of all claims existing
between the parties, Talk Visual Corporation transferred all rights and interest
in various software titles and related assets. In addition, a royalty agreement
was executed between the parties. As a result of this agreement, the debt
obligation of $72,068 recorded on the books as due to Ariella Lehrer was
recorded as an extraordinary income item from debt cancellation.

11
<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, direct sales force and over the internet.
Through our wholly owned subsidiary, we own and operate a commercial property
located in Sacramento, California.


PROPOSED ACQUISITIONS

On March 6, 2000, the Company signed a letter of intent to acquire 70% of YAK
Communications (USA) Inc., parent company to YAK Communications Canada,
Inc.("YAK"). The letter of intent was amended July 2, 2000, to acquire 51% to
60% of the outstanding common stock. On June 30, 2001, an agreement was signed
restructuring the original acquisition agreement as amended. Under the terms of
the June 30, 2001 agreement, we will purchase up to 53% of YAK. The purchase
price is based on US $8 million. An initial 5% settlement was agreed through the
conversion of $462,852 of loans into YAK's equity, and an additional 5% by the
issuance of 8.4 million of our common shares. The remaining $3 million purchase
price is due, in either cash and/or stock, by December 22, 2001. Management does
not foresee the Company in a position, by December 22, 2001, to pay the balance
in cash. We will endeavor to negotiate a restructuring of the purchase terms to
consumate the acquisition.

YAK is a leading Dial-Around service provider in Canada, with annual revenues of
$30 million (CAD). YAK Communications (USA) Inc. is owned 32% by parties related
to the Company. We have engaged an independent international consulting firm to
render an opinion of valuation for this acquisition.

OUTLOOK

Prior to June of 2000, revenues were derived from our retail locations in
Florida, California, Massachusetts and Rhode Island, our internet sites and the
sale of equipment. In June of 2000, we acquired eleven retail calling shops in
the New York and New Jersey markets. During the nine months ended September 30,
2001, the eleven stores accounted for 76.6% of our telecommunication revenues.
During the same period, we closed all of our stores not in the New York and New
Jersey markets.

In December of 2000, we activated our switch located in Miami, Florida, and
commenced carrying international bound traffic from our retail stores through
our facility. As a result of our ability to carry traffic through our own
equipment, we began offering long distance service and international calling
plans at competitive rates to other retail calling operations. In addition, at

12
<PAGE>

the end of the second quarter, we began selling a prepaid international access
program to cellular telephone users, at very competitive rates. Through an
agreement with Sprint, we are selling switched access service to retail call
shops not in the Miami service area. Commencing in the fourth quarter, through
an agreement with Global Crossing Bandwidth, Inc., we will offer nationwide
access to our switch which will open new markets to us.

On October 12, 2001, we announced the appointment of a new Director of Sales,
Mr. Andrew Silber. Mr. Silber co-founded the Business Advantage Group in Ft.
Lauderdale, FL, in 1993. Business Advantage Group is a telecommunications sales
and consulting company which supports retail services, systems, contracts and
tariff negotiations for business customers. As Vice-President of Operations from
1993 to 1999, Mr. Silber was responsible for the oversight of daily operations,
finance and sales activities. During Mr. Silber's tenure, Business Advantage
Group became one of Cable and Wireless's largest international resale agents in
the United States; the company also resells Sprint, Sprint PCS, IDS and
AT&T/AT&T Wireless services.

In 1999, Mr. Silber joined IDS, a Florida-based competitive local exchange
(CLEC) and long-distance carrier as its Director of Sales, and became that
company's first Director of Business Development. Mr. Silber was instrumental in
assisting IDS to increase its revenues by over 400%, and was responsible for the
comprehensive sales program which propelled IDS into the position of being one
of Florida's largest CLECs, and one of the four largest CLECs in the
southeastern United States.

It is anticipated that, as a result of the combination of increasing retail
revenues from our stores, the addition of switched access service, nationwide
access through Global Crossing Bandwidth, Inc., international cellular calling
plans, the appointment of Mr. Silber as Director of Sales and the sale of
traffic on our switch to other retail call shops, we should reach break even and
eventually reach profitability in the near future.


MATERIAL COMMITMENTS

On October 2, 2001, we signed a Carrier Services Agreement with Global Crossing
Bandwidth, Inc. This Agreement calls for an annual minimum charge of $200,000.
This commitment will be met through revenues from operations.


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
may 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
our 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.

13
<PAGE>

RESULTS OF OPERATIONS

Comparison of the three and nine months ended September 30, 2001 and 2000

Revenues
--------

Revenue from telecommunication services for the three months ended September 30,
2001 increased $686,067 from $783,003 to $1,469,070. During the nine months
ended September 30, 2001, this revenue increased $2,618,108 from $893,042 to
$3,511,150. The increase was primarily due to the addition of the eleven stores
acquired in June of 2000 and the new international connection service offerings.
These eleven stores accounted for sales of $2,690,740 or 76% of the total sales
for the nine month period. Long distance services and sales to retail calling
shops equaled $470,958 for the nine month period. The remaining sales of
$349,452 were from stores which were closed in the second and third quarters.


Costs and Expenses
------------------

Cost of telecommunication, retail operations and equipment sales for the three
months and nine months ended September 30, 2001 increased $270,490 and
$1,873,698 from $1,193,095 to $1,463,585 and from $1,669,780 to $3,543,478,
respectively. The increased costs are a result of the increase in retail sales
by the addition of the New York and New Jersey stores and increased carrier
costs to transport international calling services.

Depreciation and amortization is composed of the following elements:
<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED SEPT 30,   NINE MONTHS ENDED SEPT 30,
                                                     ---------------------------   --------------------------
                                                         2001           2000           2001            2000
                                                       ----------     ---------     ---------     -----------
<S>                                                     <C>            <C>          <C>              <C>
     Depreciation                                       $ 94,278       $107,689     $299,117         $268,322
     Amortization of Intangibles                          22,625         11,063       67,875           11,063
     Amortization of loan fees                            12,717         12,189       35,774           36,568
                                                         -------        -------      -------          -------
                                                        $129,620       $130,941     $402,766         $315,953
</TABLE>

Amortization of goodwill resulted from the acquisition of the eleven stores
described above.

General and administrative expenses decreased $110,894, from $580,495 to
$469,601, for the three months ended September 30, 2001. The decrease recorded
in the current quarter resulted from staff cutbacks following closure of our
retail stores and cost reductions.

Marketing expense decreased $288,397 from $474,046 to $185,649 for the nine
month period ended September 30, 2001. Marketing expenses during the nine months
ended September 30, 2000, included $131,000 of costs related to North Africa,
and central European development, $112,000 of printing and promotional material
and $24,000 of website maintenance expenses which were not incurred in the
current reporting periods.

Amounts reported as the write off of investments and advances to foreign
operations and store closing provisions and costs are as follows:

     Advances to United Kingdom operations             $213,956
     Advances to Israeli operations                      26,500
     Advances to Canadian operations                     72,772
     Advances to Belgian operations                      60,067
     Costs of closing California, Massachusetts
       and Florida retail stores                         94,401
     Costs of closing Rhode Island and remaining
       Florida stores                                   101,358
                                                        -------
                                                       $569,054
                                                        =======

15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

We have incurred significant net losses for the years 2000 and 1999 and for the
nine months ended September 30, 2001. We expect to continue to incur losses and
have negative working capital through the first quarter of 2002. Our working
capital deficiency at September 30, 2001 was $1,892,609 compared with a working
capital deficiency of $954,904 at December 31, 2000. The increase in working
capital deficiency was mainly due to operating losses. 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 continues to reduce operating costs and develop revenue sources to
reach break even or profitability as soon as possible. Our net cash used in
operating activities at the end of the second quarter totaled $1,069,073. For
the three months ended September 30, 2001, we used only an additional $131,763
in cash for operations, leaving our net cash used in operating activities at the
end of this reporting period to total $1,200,836. Management continues to
tighten spending and expand sales to diminish the negative cash flow from
operations and anticipates this turning positive in the near term.
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 September 30, 2001, we have sold 29,924,996 shares of
common stock under the stock purchase agreement for net proceeds of $1,582,010
after payment of commissions and expenses.

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 September 30, 2001, the preferred shareholders had
contributed $3,285,000 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 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.

We had $1,200,836 in cash outflows from operating activities for the nine months
ended September 30, 2001, compared to cash outflows of $3,667,489 for the nine
months ended September 30, 2000. This decrease in outflows of $2,466,653
primarily resulted from the increase in accounts payable, accrued expenses and
other current liabilities.

Net cash from investing activities amounted to $145,557 for the nine months
ended September 30, 2001 compared to a cash outflow from investing activities of
$1,135,421 for the same period in 2000. The increase of $1,280,978 in cash flow
from investing activities resulted from a lower level of property acquisition
and the proceeds from the sale of our Ontario property.

Net cash from financing activities amounted to $1,168,640 for the nine months
ended September 30, 2001, and $5,001,520 for the nine months ended September 30,
2000. This decrease of $3,832,880, resulted from a higher level of collection on
stock subscriptions, exercise of stock options and the receipt of proceeds from
private placements in the nine months ended September 30, 2000 than occurred in
the nine months ended September 30, 2001.

15
<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 our financial position as a result of defense
costs, diversion of management resources and other factors.

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

     The Company's annual meeting of stockholders was held on July 25, 2001. The
     directors elected at the meeting were:
                                             For       Withheld
                                        ------------  ------------
         David B. Hurwitz                 88,208,908    314,741
         Eugene Rosov                     88,268,908    314,741
         Clinton H. Snyder                88,268,908    314,741
         Alexander H. Walker, Jr.         88,268,908    314,741
         Michael J. Zwebner               88,268,908    314,741

     Approval of the amendment to the Articles of Incorporation increasing the
number of shares of common stock authorized for issuance from 100,000,000 shares
of common stock to 500,000,000 shares of common stock:
                            For           Against         Withheld
                            ------------  --------------  ------------
                            84,628,431     3,435,060        142,816

     Ratification of the selection of Mayer Rispler & Company, P.C., as the
Company's independent auditors for the fiscal year ending December 31, 2001:
                            For           Against         Withheld
                            ------------  --------------  ------------
                            87,170,814      311,345        898,466

The foregoing matters are described in detail in the Company's proxy statement
dated July 10, 2001 for the 2001 Annual Meeting of Stockholders.

ITEM 5.     OTHER INFORMATION

     We have previously issued projections for the fourth quarter of 2001. These
projections indicated anticipated revenues of $1,800,000; operational costs of
$1,750,000 and net income from operations of $50,000. As a result of existing
commitments from prior periods and costs associated with building an
infrastructure to support the sales increases we are currently undergoing, we
anticipate operational costs to total $2,200,000 and net loss from operations to
total $400,000.

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

(a) The following exhibits are included herewith:
                  Exhibit  3 -  Certificate of Amendment to the Articles of
                                  Incorporation of Talk Visual Corporation
                  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
16
<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:  November 14, 2001      TALK VISUAL CORPORATION


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