UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-QSB





(Mark
      One)


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





For
      the
      quarterly period ended September 30, 2005





OR





/ 
              /
            TRANSITION
                REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934.





For
      the
      transition period from _______________to_______________


Commission
      file number 0-26059





CIRTRAN
      CORPORATION


(Exact
      name of registrant as specified in its charter)








Nevada
            68-0121636(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No)4125
                South 6000 WestWest
                Valley City, Utah
            84128(Address
                of Principal Executive Offices)
            (Zip
                Code)





(801)
      963-5112


(Registrant's
      telephone number)





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
      proceeding 12 months and (2) has been subject to such filing requirements for
      the past 90 days. Yes  X  No
      __





The
      number of shares outstanding of the registrant's common stock as of November
      11,
      2005: 577,368,569.








Transitional
      Small Business Disclosure Format (check one): Yes __  No  X








1







Table
      of Contents








PagePART
                I - FINANCIAL INFORMATIONItem
                1.
            Condensed
                Consolidated Financial StatementsBalance
                Sheets as of September 30, 2005, (unaudited) andDecember
                31, 2004
            3Statements
                of Operations for the Three and Nine Months ended September 30, 2005,
                (unaudited) and 2004 (unaudited)
            4Statements
                of Cash Flows for the Nine Months ended September 30, 2005, (unaudited)
                and 2004 (unaudited)
            5Notes
                to Condensed Consolidated Financial Statements
            7(unaudited)Item
                2.
            Management's
                Discussion and Analysis of or Plan of Operation
            20Item
                3.
            Evaluation
                of Controls and Procedures
            29PART
                II - OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            30Item
                5.
            Other
                Information
            32Item
                6
            Exhibits
            35Signatures
            36

















2





**CIRTRAN
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS (UNAUDITED)**





**September
                30,**
            ****
            **September
                30,****2005**
            
            **2004****ASSETS****Current
                Assets**Cash
                and cash equivalents
            
            $
            377,357
            
            $
            81,101Trade
                accounts receivable, net of allowance for doubtfulaccounts
                of $40,867 and $41,143, respectively
            
            
            5,034,466
            
            
            1,288,719Other
                receivables
            
            
            58,494
            
            
            -Inventory
            
            
            1,448,585
            
            
            1,453,754Other
            
            
            113,307
            
            
            153,062**Total
                Current Assets**
            
            
            7,032,209
            
            
            2,976,636**Property
                and Equipment, Net**
            
            
            2,718,401
            
            
            840,793**Investment
                in Securities at Cost**
            
            
            300,000
            
            
            300,000**Other
                Assets, Net**
            
            
            284,845
            
            
            8,000**Deposits**
            
            
            100,000
            
            
            100,000**Loan
                Fees, Net**
            
            
            217,206
            
            
            -**Deferred
                Offering Costs**
            
            
            -
            
            
            68,000**Total
                Assets**
            
            $
            10,652,661
            
            $
            4,293,429**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)****Current
                Liabilities**Accounts
                payable
            
            $
            2,068,346
            
            $
            1,104,392Accrued
                liabilities
            
            
            1,274,866
            
            
            2,066,022Current
                maturities of long-term notes payable
            
            
            1,742,840
            
            
            1,815,875Notes
                payable to stockholders
            
            
            -
            
            
            18,586Notes
                payable to related parties
            
            
            -
            
            
            1,530,587**Total
                Current Liabilities**
            
            
            5,086,052
            
            
            6,535,462**Long-Term
                Notes Payable, Less Current Maturities**
            
            
            2,697,930
            
            
            -**Commitments
                and Contingencies****Stockholders'
                Equity (Deficit)**Common
                stock, par value $0.001; authorized 750,000,000 shares;issued
                and outstanding shares: 577,368,569 and 474,118,569net
                of 3,000,000 shares held in treasury at no costat
                December 31, 2004
            
            
            577,364
            
            
            474,114Additional
                paid-in capital
            
            
            20,251,374
            
            
            16,083,455Accumulated
                deficit
            
            
            (17,960,059
            )
            
            (18,799,602
            )**Total
                Stockholders' Equity (Deficit)**
            
            
            2,868,679
            
            
            (2,242,033
            )**Total
                Liabilities and Stockholders' Equity (Deficit)**
            
            $
            10,652,661
            
            $
            4,293,429















3





**CIRTRAN
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**





**For
                the Three Months Ended**
            
            **For
                the Nine Months Ended****September
                30,**
            
            **September
                30,****2005**
            
            **2004**
            
            **2005**
            
            **2004****Net
                Sales**
            
            $
            4,291,762
            
            $
            2,626,770
            
            $
            11,521,411
            
            $
            5,230,374**Cost
                of Sales**
            
            
            (2,620,109
            )
            
            (2,069,828
            )
            
            (6,962,380
            )
            
            (4,066,375
            )**Gross
                Profit**
            
            
            1,671,653
            
            
            556,942
            
            
            4,559,031
            
            
            1,163,999**Operating
                Expenses**Selling,
                general and administrative expenses
            
            
            1,036,565
            
            
            876,043
            
            
            3,565,707
            
            
            2,240,620Non-cash
                employee compensation expense
            
            
            -
            
            
            147,500
            
            
            69,000
            
            
            226,250**Total
                Operating Expenses**
            
            
            1,036,565
            
            
            1,023,543
            
            
            3,634,707
            
            
            2,466,870**Income
                (Loss) From Operations**
            
            
            635,088
            
            
            (466,601
            )
            
            924,324
            
            
            (1,302,871
            )**Other
                Income (Expense)**Interest
            
            
            (149,732
            )
            
            (85,446
            )
            
            (412,530
            )
            
            (400,039
            )Other,
                net
            
            
            (362
            )
            
            (39
            )
            
            (217
            )
            
            (196
            )Gain
                on forgiveness of debt
            
            
            90,048
            
            
            -
            
            
            327,966
            
            
            205,433**Total
                Other Income (Expense), Net**
            
            
            (60,046
            )
            
            (85,485
            )
            
            (84,781
            )
            
            (194,802
            )**Net
                Income (Loss)**
            
            $
            575,042
            
            $
            (552,086
            )
            $
            839,543
            
            $
            (1,497,673
            )Basic
                income (loss) per common share
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Diluted
                income (loss) per common share
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -







The
        accompanying notes are an integral part of these financial
        statements.





4





**CIRTRAN
      CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED
      STATEMENTS**


**OF
      CASH FLOWS (UNAUDITED)**





**For
                the Nine Months Ended September 30,**
            
            **2005**
            
            **2004****Cash
                flows from operating activities**Net
                income (loss)
            
            $
            839,543
            
            $
            (1,497,673
            )Adjustments
                to reconcile net loss to netcash
                used in operating activities:Depreciation
                and amortization
            
            
            253,701
            
            
            181,414Loss
                on disposal of equipment
            
            
            -
            
            
            33,238Provision
                for doubtful accounts
            
            
            (276
            )
            
            (1,200
            )Gain
                on forgiveness of debt
            
            
            (327,966
            )
            
            (205,433
            )Settlement
                expense
            
            
            -
            
            
            60,000Loan
                costs and interest paid from loan proceeds
            
            
            67,168
            
            
            145,000Amortization
                of beneficial conversion feature
            
            
            59,040
            
            
            -Deferred
                offering costs expensed
            
            
            68,000Amortization
                of loan premium and loan costs
            
            
            84,409Options
                exercised in lieu of board compensation
            
            
            69,000
            
            
            101,250Intrinsic
                value of options issued to employees
            
            
            -
            
            
            125,000Options
                issued to attorneys and consultants for services
            
            
            109,728
            
            
            175,602Changes
                in assets and liabilities:Trade
                accounts receivable
            
            
            (3,686,267
            )
            
            (455,872
            )Other
                receivables
            
            
            (58,494
            )
            
            -Inventories
            
            
            5,169
            
            
            (197,186
            )Prepaid
                expenses and other assets
            
            
            (244,764
            )
            
            (19,313
            )Accounts
                payable
            
            
            1,110,172
            
            
            184,619Accrued
                liabilities
            
            
            396,441
            
            
            294,597Total
                adjustments
            
            
            (2,094,939
            )
            
            421,716**Net
                cash used in operating activities**
            
            
            (1,255,396
            )
            
            (1,075,957
            )**Cash
                flows from investing activities**Purchase
                of investment
            
            
            -
            
            
            (300,000
            )Cash
                acquired with PFE acquisition
            
            
            39,331
            
            
            -Net
                change in deposits
            
            
            (100,000
            )
            
            -Purchase
                of property and equipment
            
            
            (253,196
            )
            
            (502,657
            )**Net
                cash used in investing activities**
            
            
            (313,865
            )
            
            (802,657
            )**Cash
                flows from financing activities**Change
                in checks written in excess of cash in bank
            
            
            -
            
            
            (9,623
            )Proceeds
                from notes payable to stockholders
            
            
            4,414
            
            
            18,500Payments
                on notes payable to stockholders
            
            
            -
            
            
            (31,752
            )Proceeds
                from notes payable, net of cash paid for offering costs
            
            
            1,732,067
            
            
            2,927,000Principal
                payments on notes payable
            
            
            -
            
            
            (298,545
            )Proceeds
                from notes payable to related parties
            
            
            95,586
            
            
            2,145,233Payment
                on notes payable to related parties
            
            
            -
            
            
            (2,919,622
            )Proceeds
                from exercise of options and warrants to purchasecommon
                stock
            
            
            33,000
            
            
            111,500Exercise
                of options issued to attorneys and consultantsfor
                services
            
            
            450
            
            
            550**Net
                cash provided by financing activities**
            
            
            1,865,517
            
            
            1,943,241**Net
                increase in cash and cash equivalents**
            
            
            296,256
            
            
            64,627**Cash
                and cash equivalents at beginning of period**
            
            
            81,101
            
            
            54,135**Cash
                and cash equivalents at end of year period**
            
            $
            377,357
            
            $
            118,762








5








**CIRTRAN
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
      (CONTINUED)**





**For
                the Nine Months Ended September 30,**
            
            **2005**
            
            **2004****Supplemental
                disclosure of cash flow information**Cash
                paid during the period for interest
            
            $
            112,706
            
            $
            230,572**Noncash
                investing and financing activities**Notes
                issued for accounts payable and capital lease obligations
            
            $
            -
            
            $
            711,894Acquisition
                of PFE Properties, LLC for stock and assumptionof
                note payable
            
            $
            1,868,974
            
            $
            -Common
                stock issued for settlement of note payableand
                accrued interest
            
            $
            2,148,913
            
            $
            30,000Common
                stock issuance in which proceeds were retainedas
                payment of notes payable
            
            $
            -
            
            $
            2,150,000Deposit
                applied to purchase of property and equipment
            
            $
            100,000
            
            $
            -Common
                stock issued for accrued rent and interest
            
            $
            411,402Accrued
                interest converted to notes payable
            
            $
            -
            
            $
            6,834Stock
                options exercised for settlement of accrued interestand
                accrued compensation
            
            $
            234,500
            
            $
            61,000Stock
                options exercised for settlement of notespayable
                to stockholders
            
            $
            23,000
            
            $
            -Loan
                fees incurred as part of convertible debenture
            
            $
            250,765
            
            $
            -Beneficial
                conversion feature on convertible debenture
            
            $
            441,176
            
            $
            -Convertible
                debenture proceeds used to settlenotes
                payable outstanding
            
            $
            2,265,000
            
            $
            -Note
                issued for settlement of notes payable and accruedinterest
            
            $
            -
            
            $
            551,819Fees
                withheld from notes payable for Equity Line Agreement
            
            $
            -
            
            $
            86,000Deferred
                offering costs withheld from notes payable proceeds
            
            $
            -
            
            $
            128,000



















6





**CIRTRAN
      CORPORATION AND SUBSIDIARIES**





**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**





**NOTE
      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





***Condensed
      Financial Statements*** —
      The
      accompanying unaudited condensed consolidated financial statements include
      the
      accounts of CirTran Corporation and its subsidiaries (the “Company”). These
      financial statements are condensed and, therefore, do not include all
      disclosures normally required by accounting principles generally accepted in
      the
      United States of America.  These statements should be read in conjunction
      with the Company’s annual financial statements included in the Company’s Annual
      Report on Form 10-KSB.  In particular, the Company’s significant accounting
      principles were presented as Note 1 to the consolidated financial statements
      in
      that Annual Report. In the opinion of management, all adjustments necessary
      for
      a fair presentation have been included in the accompanying condensed
      consolidated financial statements and consist of only normal recurring
      adjustments.  The results of operations presented in the accompanying
      condensed consolidated financial statements for the nine months ended September
      30, 2005, are not necessarily indicative of the results that may be expected
      for
      the full year ending December 31, 2005.





***Principles
      of Consolidation*** —
      On
      March 31, 2005, Cirtran Corporation acquired a 100% ownership interest in PFE
      Properties, LLC (see Note 4).





The
      condensed consolidated financial statements include the accounts of CirTran
      Corporation, and its wholly owned subsidiaries, Racore Technology Corporation
      and CirTran-Asia Inc. The accounts of PFE Properties, LLC have been included
      as
      of September 30, 2005. All significant intercompany transactions have been
      eliminated in consolidation.





***Stock-Based
      Compensation*** **—** At
      September 30, 2005, the Company had one stock-based employee compensation plan,
      which is described more fully in Note 11. The Company accounts for the plan
      under Accounting Principles Board Opinion No. 25, *Accounting
      for Stock Issued to Employees,* (“APB
      25”) and related interpretations. During the nine months ended September 30,
      2005 and 2004, the Company recognized compensation expense relating to stock
      options and warrants of $69,000 and $226,250, respectively. The following table
      illustrates the effect on net loss and basic and diluted loss per common share
      as if the Company had applied the fair value recognition provisions of Financial
      Accounting Standards Board (“FASB”) Statement No. 123, *Accounting
      for Stock-Based Compensation* ,
      to
      stock-based employee compensation **:**







**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Net
                income (loss) as reported
            
            $
            575,042
            
            $
            (552,086
            )
            $
            839,543
            
            $
            (1,497,673
            )Add:
                Stock-based employee compensation expenseincluded
                in net income (loss)
            
            
            -
            
            
            147,500
            
            
            69,000
            
            
            226,250Deduct:
                Total stock-based employee compensationbenefit
                (expense) determined under fair value basedmethod
                for all awards
            
            
            (47,850
            )
            
            (108,091
            )
            
            (271,456
            )
            
            (412,557
            )Pro
                forma net income (loss)
            
            $
            527,192
            
            $
            (512,677
            )
            $
            637,087
            
            $
            (1,683,980
            )Basic
                and diluted income (loss) per shareAs
                reported - basic
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -As
                reported - diluted
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Proforma
                - basic
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Proforma
                - diluted
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -








7






***Patents*** **—** Legal
      fees and other direct costs incurred in obtaining patents in the United States
      and other countries are capitalized. Patents costs are amortized over the
      estimated useful life of the patent. During the nine months ended September
      30,
      2005, the Company capitalized $35,799 in patent related legal costs.
      Amortization expense was $7,674 during the nine months ended September 30,
      2005.





The
      realization of patents and other long-lived assets is evaluated periodically
      when events or circumstances indicate a possible inability to recover the
      carrying amount. An impairment loss is recognized for the excess of the carrying
      amount over the fair value of the asset or the group of assets. Fair value
      is
      determined based on expected discounted net future cash flows. The analysis
      necessarily involves significant management judgment to evaluate the capacity
      of
      an asset to perform within projections. As required, an evaluation of impairment
      was made on the patents as of September 30, 2005. No indicators of impairment
      were noted.




**NOTE
      2 - REALIZATION OF ASSETS**





The
      accompanying consolidated financial statements have been prepared in conformity
      with accounting principles generally accepted in the United States of America,
      which contemplate continuation of the Company as a going concern. The Company
      had net income of $839,543 for the nine months ended September 30, 2005,
      compared to a net loss of $658,322 for the year ended December 31, 2004. As
      of
      September 30, 2005, and December 31, 2004, the Company had an accumulated
      deficit of $17,960,059 and $18,799,602, respectively, and a total stockholders’
      equity (deficit) of $2,868,679 and $(2,242,033), respectively. The Company
      also
      had working capital of $1,946,157 and $(3,558,826) as of September 30, 2005,
      and
      December 31, 2004, respectively. In addition, the Company used, rather than
      provided, cash in its operations in the amounts of $1,255,396 and $1,680,054
      for
      the nine months ended September 30, 2005, and the year ended December 31, 2004,
      respectively. These conditions raise substantial doubt about the Company’s
      ability to continue as a going concern.





In
      addition, the Company is a defendant in numerous legal actions (see Note 7).
      These matters may have a material impact on the Company’s financial position,
      although no assurance can be given regarding the effect of these matters in
      the
      future.





In
      view
      of the matters described in the preceding paragraphs, recoverability of a major
      portion of the recorded asset amounts shown in the accompanying consolidated
      balance sheets is dependent upon continued operations of the Company, which
      in
      turn is dependent upon the Company’s ability to meet its financing requirements
      on a continuing basis, to maintain or replace present financing, to acquire
      additional capital from investors, and to succeed in its future operations.
      The
      financial statements do not include any adjustments relating to the
      recoverability and classification of recorded asset amounts or amounts and
      classification of liabilities that might be necessary should the Company be
      unable to continue in existence.





As
      discussed in Note 10, the Company had entered into an equity line of credit
      agreement and a standby equity distribution agreement with a private investor. With
      the
      sale by the Company of the Convertible Debenture in May 2005, this and all
      other
      agreements relating to the equity line and the standby equity distribution
      agreement were terminated. (See Note 9.)





8







**NOTE
      3 - BASIC AND DILUTED NET INCOME (LOSS) PER SHARE**





In
      accordance with SFAS No. 128, “Earnings Per Share,” the following presents the
      computation of basic and diluted net income (loss) per share:




**Three
                  Months Ended September 30,**
              
              **Nine
                  Months Ended September 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Basic
                  and diluted net income (loss) availableto
                  common shareholders
              
              $
              575,042
              
              $
              (552,086
              )
              $
              839,543
              
              $
              (1,497,673
              )Basic
                  weighted-average commonshares
                  outstanding
              
              
              576,101,903
              
              
              424,095,306
              
              
              545,535,235
              
              
              400,091,599Effect
                  of convertible debenture
              
              
              125,000,000
              
              
              -
              
              
              125,000,000
              
              
              -Effect
                  of dilutive stock options
              
              
              4,370,619
              
              
              -
              
              
              5,057,565
              
              
              -Diluted
                  weighted-average commonshares
                  outstanding
              
              
              705,472,522
              
              
              424,095,306
              
              
              675,592,800
              
              
              400,091,599Basic
                  income (loss) per common share
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Diluted
                  income (loss) per common share
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -




**NOTE
      4 - ACQUISITION OF PFE PROPERTIES, LLC**





On
      March
      31, 2005, the Company purchased a 100% interest in PFE Properties LLC (PFE).
      PFE
      was previously owned by a relative of the President and CEO. PFE owns the land
      and building in which the Company’s manufacturing facilities and administrative
      offices are located. The liabilities of PFE on the date of acquisition include
      a
      mortgage note payable of $1,050,000, secured by the building. The Company
      acquired PFE by issuing 20,000,000 shares of the Company’s restricted common
      stock with a fair value of $800,000 on the date of acquisition and assuming
      the
      mortgage note payable of $1,050,000 and accounts payable of $18,974. The results
      of operations for PFE have been included beginning March 31, 2005. The
      additional $800,000 for the purchase of PFE was allocated between the land
      and
      building value.





The
      balance sheet of PFE as of March 31, 2005 is presented as
      follows:


Current
                  Assets
              
              $
              98,535Property
                  and Equipment
              
              
              1,770,439**Total
                  Assets Acquired**
              
              
              1,868,974Accounts
                  Payable
              
              
              18,974Mortgage
                  Note Payable
              
              
              1,050,000**Total
                  Liabilities Assumed**
              
              
              1,068,974**Net
                  Assets Acquired**
              
              $
              800,000




9











The
      pro
      forma information is presented as if the Company had acquired PFE on January
      1,
      2004, as follows:





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Net
                sales
            
            $
            4,291,762
            
            $
            2,626,770
            
            $
            11,521,411
            
            $
            5,230,374Net
                income (loss)
            
            $
            575,042
            
            $
            (540,850
            )
            $
            851,557
            
            $
            (1,463,965
            )Basic
                income (loss) per common share
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Diluted
                income (loss) per common share
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -





**NOTE
      5 - INVESTMENT IN SECURITIES AT COST**





On
      April
      13, 2004, the Company entered into a stock purchase agreement with an unrelated
      party under which the Company purchased 400,000 shares of the investee’s Series
      B Preferred Stock (the "Preferred Shares") for an aggregate purchase price
      of
      $300,000 cash. This purchase was made at fair value. The Preferred Shares are
      convertible, at the Company’s option, into an equivalent number of shares of
      investee common stock, subject to adjustment. The Preferred Shares are not
      redeemable by the investee. As a holder of the Preferred Shares, the Company
      has
      the right to vote the number of shares of investee common stock into which
      the
      Preferred Shares are convertible at the time of the vote. The investment
      represents less than a 5% interest in the investee. The investment does not
      have
      a readily determinable fair value and is stated at historical cost, less an
      allowance for impairment when circumstances indicate an investment has been
      impaired. The Company periodically evaluates its investments as to whether
      events and circumstances have occurred which indicate possible impairment.
      No
      indicators of impairment were noted for the nine months ended September 30,
      2005.





Separate
      from the purchase of the Preferred Shares, the Company and the investee also
      entered into a Preferred Manufacturing Agreement. Under this agreement, the
      Company will perform exclusive "turn-key" manufacturing services handling most
      of the investee’s manufacturing operations from material procurement to complete
      finished box-build of all of investee products. The initial term of the
      agreement is three years, continuing month to month thereafter unless terminated
      by either party. Sales under this agreement totaled $163,473 and $538,233 for
      the periods ended September 30, 2005, and December 31, 2004, respectively.





**NOTE
      6 - RELATED PARTY TRANSACTIONS**





***Notes
      Payable to Stockholders*** **—** The
      Company had amounts due to stockholders from three separate notes. The balance
      due to stockholders at September 30, 2005, and December 31, 2004, was zero
      and
      $18,586, respectively. During the nine months ended September 30, 2005, in
      lieu
      of a cash exercise price of $23,000, the stockholders forgave the remaining
      $23,000 of notes payable owed to them by the Company to exercise 1,000,000
      options to purchase shares of the Company's common stock.





***Notes
      Payable to Related Party —*** During
      2002, the Company entered into a verbal bridge loan agreement with Abacas
      Ventures, Inc. (Abacas). This agreement allows the Company to request funds
      from
      Abacas to finance the build-up of inventory relating to specific sales. The
      loan
      bears interest at 24% and is payable on demand. There are no required monthly
      payments. During the nine months ended September 30, 2005, and the year ended
      December 31, 2004, the Company was advanced $95,586 and $3,128,281,
      respectively, and made cash payments of zero and $3,025,149, respectively.





During
      March 2005, the Company issued 51,250,000 shares of the Company’s restricted
      common stock for payment of $2,055,944 in principal and accrued interest on
      the
      note. Because Abacas is a related party, no gain or loss on forgiveness of
      debt
      was recognized.





10








The
      total
      principal amount owed to Abacas between the note payable and the bridge loan
      was
      zero and $1,530,587 as of September 30, 2005, and December 31, 2004,
      respectively. The total accrued interest owed to Abacas between the note payable
      and the bridge loan was zero and $430,828 as of September 30, 2005, and December
      31, 2004, respectively.





**NOTE
      7 - COMMITMENTS AND CONTINGENCIES**





***Settlement
      of Litigation*** **** --
      During
      January 2002, the Company settled a lawsuit that had alleged a breach of
      facilities sublease agreement involving facilities located in Colorado. The
      Company’s liability in this action was originally estimated to range up to $2.5
      million. The Company had filed a counter suit in the same court for an amount
      exceeding $500,000 for missing equipment.





Effective
      January 18, 2002, the Company entered into a settlement agreement which required
      the Company to pay the plaintiff the sum of $250,000. Of this amount, $25,000
      was paid upon execution of the settlement, and the balance, together with
      interest at 8% per annum, was payable by July 18, 2002. As security for payment
      of the balance, the Company executed and delivered to the plaintiff a Confession
      of Judgment and also issued 3,000,000 shares of common stock, which were held
      in
      escrow and were treated as treasury stock recorded at no cost. The fair value
      of
      the 3,000,000 shares was less than the carrying amount of the note payable.
      Because 75 percent of the balance had not been paid by May 18, 2002, the Company
      was required to prepare and file with the Securities & Exchange Commission,
      at its own expense, a registration statement with respect to the escrowed
      shares.





As
      of
      September 30, 2005, the Company was in default of its obligations under the
      settlement agreement and the total payment due thereunder had not been made.
      A
      registration statement with respect to the escrowed shares was not filed and
      the
      Company did not replace the escrowed shares with registered, free-trading shares
      as per the terms of the agreement. The plaintiff filed a Confession of Judgment
      and proceeded with execution thereon. The shares in escrow were released and
      issued as partial settlement of $92,969 on the note payable
      outstanding.





In
      connection with a separate sublease agreement of these facilities, the Company
      received a settlement from the sublessee during May 2002, in the amount of
      $152,500, which has been recorded as other income. The Company did not receive
      cash from this settlement, but certain obligations of the Company were paid
      directly. $109,125 of the principal balance of the note related to the
      settlement mentioned above was paid. Also, $7,000 was paid to the Company’s
      legal counsel as a retainer for future services. The remaining $36,375 was
      paid
      to the above mentioned plaintiff as a settlement of rent expense.





During
      September 2002, the plaintiff filed a claim that the $109,125 portion of the
      payment was to be applied as additional rent expense rather than a principal
      payment on the note payable. The Company estimates that the probability of
      the
      $109,125 being considered additional rent expense is remote and disputes the
      claim. The Company intends to vigorously defend the action.





***Litigation*** ** **-** During
      2003 and 2004, an investment firm filed suits in the U.S. District Court for
      the
      District of Utah seeking payment of a commission consisting of common stock
      valued at 1,750,000 for allegedly introducing the Company to the Equity Line
      Investor (See Note 9). The case was previously dismissed in a New York court.
      The Company estimates that the risk of loss is remote; therefore no accrual
      has
      been made.





Various
      vendors have notified the Company that they believe they have claims against
      the
      Company totaling $147,592. None of these vendors have filed lawsuits in relation
      to these claims. The Company has accrued the entire amount of these claims,
      and
      they are included in accounts payable. During the nine months ended September
      30, 2005, the Company determined that the statute of limitations had expired
      for
      various vendors. Amounts of $165,192 were written off and recorded as a gain
      on
      forgiveness of debt. However, there can be no assurance that any or all of
      these
      vendors will agree with the Company’s determination, and the Company may be
      subject to claims or litigation in the future.





11







In
      addition, various vendors have notified the Company that they believe they
      have
      claims against the Company totaling $159,308. The Company has determined the
      probability of realizing any loss on these claims is remote. The Company has
      made no accrual for these claims and is currently in the process of negotiating
      the dismissal of these claims with the various vendors.





The
      Company is also the defendant in numerous immaterial legal actions primarily
      resulting from nonpayment of vendors for goods and services received. The
      Company has accrued the payables and is currently in the process of negotiating
      settlements with these vendors.





***Registration
      Rights*** **** -
      In
      connection with the Company’s entering into an Equity Line of Credit Agreement
      (described in Note 9), the Company granted to the equity line investor (the
      "Equity Line Investor") registration rights, in connection with which the
      Company was required to file a registration statement covering the resale of
      shares put to the Equity Line Investor under the equity line. The Company was
      also required to keep the registration statement effective until two years
      following the date of the last advance under the equity line.





Also,
      in
      connection with the Company's entering into a standby equity distribution
      agreement (described in Note 9), the Company granted to the investor
      registration rights, in connection with which the Company was required to file
      a
      registration statement covering the resale of shares put to the investor under
      the standby equity distribution agreement. The Company was also required to
      keep
      the registration statement effective until two years following the date of
      the
      last advance under the standby equity distribution agreement.





In
      connection with the Company’s sale of a convertible debenture (discussed below),
      the Equity Line of Credit Agreement and the Standby Equity Distribution
      Agreement, together with all associated registration rights, was
      terminated.





In
      May
      2005, connection with the Company’s sale of a convertible debenture (discussed
      below), the Company granted to the purchaser of the debenture registration
      rights, pursuant to which the Company agreed to file, within 120 days of the
      closing of the purchase of the debenture, a registration statement to register
      the resale of shares of the Company’s common stock issuable upon conversion of
      the debenture. The Company agreed to register the resale of up to 100,000,000
      shares, and to keep such registration statement effective until all of the
      shares issuable upon conversion of the debenture have been sold. The Company
      filed the registration statement on September 23, 2005. As of the date of this
      report, the registration statement had not been declared effective.





***Accrued
      Payroll Tax Liabilities*** **** —
      In
      November 2004, the Internal Revenue Service (IRS) accepted the Company’s Amended
      Offer in Compromise (Offer) to settle delinquent payroll taxes, interest and
      penalties. The acceptance of the Offer required the Company to pay $500,000
      by
      February 3, 2005. The Company made the required payment on February 2, 2005.
      Additionally, the Offer requires the Company to remain current in its payment
      of
      taxes for 5 years, and the Company may not claim any net operating losses for
      the years 2001 through 2015, or until the Company pays taxes in an amount equal
      to the taxes waived by the offer in compromise. The outstanding balance of
      delinquent payroll taxes, interest and penalties was $1,955,767 on the
      settlement date. The future cash payments specified by the Offer, including
      interest and principal, were less than the carrying amount of the payable;
      therefore the Company reduced the carrying amount of the liability to the total
      future cash payments of $500,000 and recorded a gain of $1,455,767 during the
      year ended December 31, 2004.







12






Further,
      the Utah State Tax Commission has entered into an agreement to allow the Company
      to pay the tax liability owing to the State of Utah in equal monthly
      installments of $4,000 over a two-year period running through December 2005.
      Through September 2005, the Company had made the required payments. The balance
      owed to the State of Utah as of September 30, 2005, and December 31, 2004,
      was
      $143,627 and $223,660, respectively, including taxes, penalties and
      interest.





***Manufacturing
      Agreement*** —
      On June
      10, 2004, the Company entered into an exclusive manufacturing agreement with
      certain Developers. Under the terms of the agreement, the Company, through
      its
      wholly-owned subsidiary CirTran-Asia, has the exclusive right to manufacture
      the
      certain products developed by the Developers or any of their affiliates. The
      Developers will continue to provide marketing and consulting services related
      to
      the products under the agreement. Should the Developers terminate the agreement
      early, they must pay the Company $150,000. Revenue is recognized when products
      are shipped. Title passes to the customer or independent sales representative
      at
      the time of shipment.





In
      connection with this agreement the Company agreed to issue options to purchase
      1,500,000 shares common stock to the Developers upon the sale, shipment and
      payment for 200,000 units of a fitness product. In addition, the Company agreed
      to issue options to purchase 300,000 shares of common stock to the Developers
      for each multiple of 100,000 units of the fitness product sold in excess of
      the
      initial 200,000 units within twenty-four months of the agreement (June 2004).
      The options will be exercisable at $0.06 per share, vest on the grant date
      and
      expire one year after issuance. As of September 30, 2005, the Company had sold,
      shipped and received payment for, 257,577 units of the fitness product. In
      January 2005, the Company issued 1,500,000 options under the terms of the
      agreement. See Note 10.





In
      connection with the above manufacturing agreement, the Company agreed to issue
      various options to purchase shares of common stock to the Developers upon the
      sale, shipment, and payment of certain quantities of additional the products.
      In
      addition, the Company agreed to issue additional options to purchase common
      stock to the developers for each multiple of units sold in excess of the initial
      units within the first twenty-four months of the agreements. The schedule of
      units and potential options that will be issued follows:




Options
              Each
                  Multiple of
              Options
                  forInitial
              for
                  Initial
              Units
                  above
              Each
                  MultipleProduct
              Units
              Units
                  Sold
              Initial
                  Units
              of
                  Units1
              500,000
              500,000
              200,000
              200,0002
              25,000
              500,000
              15,000
              100,0003
              100,000
              500,000
              50,000
              100,0004
              300,000
              1,000,000
              100,000
              200,0005
              200,000
              250,000
              100,000
              100,0006
              200,000
              500,000
              100,000
              100,000




As
      of
      September 30, 2005, the Company had not sold, shipped and received payment
      for
      enough units to require the issuance of options related to the additional
      products under these agreements. Because the Developers must provide future
      services for the options to vest, the options are treated as unissued for
      accounting purposes. The cost of these options will be recognized when the
      options are earned.








13








**NOTE
      8 - NOTES PAYABLE**





***Notes
      Payable to Equity Line Investor*** —
      As of
      December 31, 2004, the Company owed $1.7 million to Cornell Capital Partners,
      LP
      (“Cornell”), pursuant to an unsecured promissory note. The note was repayable
      over 193 days and was past due as of March 31, 2005. The note stated that if
      the
      Company did not repay the note when due, a default interest rate of 24% would
      apply to the unpaid balance. The Company recorded accrued interest of $105,074
      on the note as of March 31, 2005.





In
      January 2005, the Company entered into an additional promissory note with
      Cornell for $565,000. The Company received proceeds of $503,500, net of loan
      costs of $61,500. The terms of the note included a 9% premium or $50,850,
      resulting in a total note payable of $615,850. The premium was amortized to
      interest expense over the life of the loan. The terms of the loan stated that
      interest only payments would be made for the first six months. The Company
      would
      repay the principal, interest, and premium over the next six months. The loan
      was due January 2006. The Company amortized $11,057 of the premium as interest
      expense for the three months ended March 31, 2005.





All
      notes
      to Cornell were paid on May 27, 2005, with funds acquired from Highgate House
      Funds, Ltd. (“Highgate”), in connection with the sale of a convertible
      debenture. (See Note 9.) Payment of accrued interest was not required as part
      of
      the repayment. In connection with the repayment, the remaining premium of
      $39,793 was immediately amortized as interest expense. The gain from forgiveness
      of debt on both Cornell notes totaled $162,774.





The
      total
      principal amount owed to Cornell Capital Partners, LP was zero and $1,700,000
      as
      of September 30, 2005, and December 31, 2004, respectively.





***Mortgage
      Note Payable*** —
      In
      conjunction with the acquisition of PFE, the Company assumed a mortgage note
      payable for $1,050,000. The note bears interest at 12.5% per annum. Interest
      only payments are required through January 2006. Starting in February 2006,
      principal and interest payments will be required based on a twenty-year
      amortization of the note. The entire balance of principal and unpaid interest
      will be due in December 2008.





**NOTE
      9 - CONVERTIBLE DEBENTURE**




On
      May
      26, 2005, the Company entered into an agreement with Highgate to sell to
      Highgate a $3,750,000, 5% Secured Convertible Debenture (the “Debenture”). The
      Debenture is due December 2007 and is secured by all of the Company’s
      property.




Accrued
      interest is payable at the time of maturity or conversion. The Company may,
      at
      its option, elect to pay accrued interest in cash or shares of the Company’s
      common stock. If paid in stock, the conversion price shall be the closing bid
      price of the common stock on either the date the interest payment is due or
      the
      date on which the interest payment is made.





At
      any
      time, Highgate may elect to convert principal amounts owing on the Debenture
      into shares of the Company’s common stock at a conversion price equal to the
      lesser of $0.10 per share, or an amount equal to the lowest closing bid price
      of
      our common stock for the twenty trading days immediately preceding the
      conversion date. The Company has the right to redeem a portion or the entire
      Debenture then outstanding by paying 105% of the principal amount redeemed
      plus
      accrued interest thereon.





14








Highgate’s
      right to convert principal amounts into shares of the Company’s common stock is
      limited as follows:




(i)
            Highgate
                may convert up to $250,000 worth of the principal amount plus accrued
                interest of the Debenture in any consecutive 30-day period when the
                market
                price of the Company’s stock is $0.10 per share or less at the time of
                conversion;


(ii)
            Highgate
                may convert up to $500,000 worth of the principal amount plus accrued
                interest of the Debenture in any consecutive 30-day period when the
                price
                of the Company’s stock is greater than $0.10 per share at the time of
                conversion; provided, however, that Highgate may convert in excess
                of the
                foregoing amounts if the Company and Highgate mutually agree;
                and


(iii)
            Upon
                the occurrence of an event of default, Highgate may, in its sole
                discretion, accelerate full repayment of all debentures outstanding
                and
                accrued interest thereon or may convert the Debentures and accrued
                interest thereon into shares of the Company’s common stock.




Except
      in
      the event of default, Highgate may not convert the Debenture for a number of
      shares that would result in Highgate owning more than 4.99% of the Company’s
      outstanding common stock.




As
      discussed in Note 7, the Company granted Highgate registration rights related
      to
      the purchase of the debenture.




The
      Company determined that Highgate LLC received a beneficial conversion option
      and
      allocated $441,402 of the proceeds received to the beneficial conversion option
      that resulted in an offsetting discount to the note payable. The discount on
      the
      note payable is being amortized to interest expense from the date proceeds
      were
      received through December 2007, and amounted to $59,040 of accretion of the
      discount during the nine months ended September 30, 2005.




In
      connection with the sale of the Debenture, $2,265,000 of the proceeds were
      paid
      to Cornell to repay promissory notes. Fees of $256,433 were also withheld from
      the proceeds. As such, of the total Debenture purchase price of $3,750,000,
      the
      net proceeds to the Company were $1,228,567. The proceeds will be used for
      general corporate and working capital purposes, at the Company’s
      discretion.





**NOTE
      10 - STOCKHOLDERS’ EQUITY**





***Common
      Stock Issuances*** **** —
      During
      the nine months ended September 30, 2005, the Company issued 51,250,000 shares
      of the Company’s restricted common stock for payment of principal and accrued
      interest on the note to Abacus. (See Note 6.)





During
      the nine months ended September 30, 2005, the Company issued 10,000,000 shares
      of the Company’s restricted common stock for payment of accrued rent and accrued
      interest of $411,402. Because the rent was owed to a related party, no gain
      or
      loss on forgiveness of debt was recognized.





During
      the nine months ended September 30, 2005, the Company issued 3,000,000 shares
      of
      the Company’s restricted common stock as partial payment on a note payable for
      $92,969. (See Note 7.) As of the date of this report, the registration statement
      had not been declared effective.





15








On
      March
      31, 2005, the Company acquired a 100% interest in PFE Properties, LLC for
      20,000,000 shares of the Company’s restricted common stock. (See Note
      4.)





***Equity
      Line of Credit Agreement*** **-** On
      November 5, 2002, the Company entered into an Equity Line of Credit Agreement
      (the "Equity Line Agreement") with Cornell. The Company subsequently terminated
      the Equity Line Agreement, and on April 8, 2003, the Company entered into an
      amended equity line agreement (the "Amended Equity Line Agreement") with
      Cornell. Under the Amended Equity Line Agreement, the Company had the right
      to
      draw up to $5,000,000 from Cornell against an equity line of credit (the "Equity
      Line"), and to put to Cornell shares of the Company’s common stock in lieu of
      repayment of the draw. The number of shares to be issued was determined by
      dividing the amount of the draw by the lowest closing bid price of the Company’s
      common stock over the five trading days after the advance notice was tendered.
      Cornell was required under the Amended Equity Line Agreement to tender the
      funds
      requested by the Company within two trading days after the five-trading-day
      period used to determine the market price. Upon the sale of
      the
      Convertible Debenture, the Amended
      Equity Line Agreement was
      terminated.





***Standby
      Equity Distribution Agreement -*** The
      Company entered into a Standby Equity Distribution Agreement dated May 21,
      2004,
      with Cornell. Under the Agreement, the Company had the right, at its sole
      discretion, to draw up to $20 million on the standby equity facility (the "SEDA
      Facility") and put to Cornell shares of its common stock in lieu of repayment
      of
      the draws. The number of shares to be issued in connection with each draw was
      determined by dividing the amount of the draw by the lowest volume-weighted
      average price of the Company’s common stock during the five consecutive trading
      days after the advance was sought. The maximum advance amount was $1,000,000
      per
      advance, with a minimum of seven trading days between advances. Cornell was
      to
      retain 5% of each advance as a fee under the Agreement. The term of the
      Agreement was to run over a period of twenty-four months after a registration
      statement related to the Agreement was declared effective or until the full
      $20
      million had been drawn, whichever came first. The Company had made no draws
      against the SEDA Facility and issued no shares in connection with the SEDA
      Facility.





With
      the
      sale of the Convertible Debenture on May 27, 2005, the SEDA Facility and related
      agreements were terminated. (See Note 9.)





**NOTE
      11 - STOCK OPTIONS AND WARRANTS**





***Stock-Based
      Compensation*** **-** The
      Company accounts for stock options issued to directors, officers and employees
      under APB No. 25 and related interpretations. Under APB 25, compensation expense
      is recognized if an option's exercise price on the measurement date is below
      the
      fair value of the Company's common stock. For options that provide for cashless
      exercise or that have been modified, the measurement date is considered the
      date
      the options are exercised or expire. Those options are accounted for as variable
      options with compensation adjusted each period based on the difference between
      the market value of the common stock and the exercise price of the options
      at
      the end of the period. The Company accounts for options and warrants issued
      to
      non-employees, including the developers mentioned in Note 7, at their fair
      value
      in accordance with Statement of Financial Accounting Standards  No.
      123,
      "Accounting for Stock-Based Compensation" (“SFAS 123”).





***Stock
      Option Plan*** **-** During
      November 2003, the Company adopted the 2003 Stock Option Plan (the “2003 Plan”)
      with 35,000,000 shares of common stock reserved for issuance there under. Also,
      during December 2004, the Company adopted the 2004 Stock Option Plan (the “2004
      Plan”) with 40,000,000 shares of common stock reserved for issuance there under.
      The Company’s Board of Directors administers the plans and has discretion in
      determining the employees, directors, independent contractors and advisors
      who
      receive awards, the type of awards (stock, incentive stock options or
      non-qualified stock options) granted, and the term, vesting, and exercise
      prices.





16








***Non-Employee
      Options -*** During
      the nine months ended September 30, 2005, the Company granted options to
      purchase 3,000,000 shares of common stock to counsel for the Company with an
      exercise price of $0.0001 per share. The options were five year options and
      vested on the date granted. Legal expense of $88,202 was recorded for the fair
      value of options issued. These options and 1,500,000 previously issued options
      were exercised by counsel for proceeds of $450.




***Employee
      Options -*** During
      the nine months ended September 30, 2005, the Company granted options to
      purchase 13,000,000 shares of common stock to directors and employees of the
      Company pursuant to the 2004 Plan. These options are five year options that
      vested on the date of grant. The related exercise prices were $0.027 per share.
      The exercise price equaled the fair value of the common shares at the time
      these
      options were granted; therefore, the options had no intrinsic value. 14,500,000
      options were exercised during the nine months ended September 30, 2005, for
      $33,000 in cash, $69,000 in compensation, $234,500 in accrued compensation,
      and
      $23,000 as payment on a shareholder note payable. The $69,000 of compensation
      was recorded in conjunction with the cashless exercise of 3,000,000 of the
      options.





***Developer
      Options -*** During
      the nine months ended September 30, 2005, the Company granted options to
      purchase 1,500,000 shares of common stock to developers as described in Note
      7
      at exercise prices of $0.06 per share. The options were all five-year options
      and vested on the dates granted. Two of the developers were employees and
      together were issued 1,000,000 of the options. The exercise price equaled the
      fair value of the common shares at the time these options were granted therefore
      the options had no intrinsic value. The fair value of these options of $42,052
      was estimated using the Black-Scholes option pricing model with the following
      assumptions: risk free interest rate ranging of 4.00%, dividend yield of 0.0%,
      volatility of 302%, and expected average life of .5 years. None of these options
      were exercised during the nine months ended September 30, 2005.





The
      remaining 500,000 developer options were issued to a non-employee under the
      terms described above. Because the developer was a non-employee, cost of goods
      sold of $21,526 was recorded for the fair value of options issued during the
      three months ended March 31, 2005. These options were valued using the
      Black-Scholes option pricing model with the following assumptions: risk free
      interest rate ranging of 4.00%, dividend yield of 0.0%, volatility of 302%,
      and
      expected average life of .5 years. None of these options were exercised during
      the nine months ended September 30, 2005.





A
      total
      of 11,250,000 employee options and 1,500,500 non-employee options were
      outstanding as of September 30, 2005.





A
      summary
      of the stock option activity for the nine months ended September 30, 2005,
      is as
      follows:





17










Shares
            
            Weighted
                Average Exercise PriceOutstanding
                at December 31, 2004
            
            
            14,250,500
            
            $
            0.02Granted
            
            
            17,500,000
            
            $
            0.03Exercised
            
            
            (19,000,000
            )
            $
            0.02Cancelled
            
            
            -
            
            
            -Outstanding
                at June 30, 2005
            
            
            12,750,500
            
            $
            0.03Exercisable
                at June 30, 2005
            
            
            12,750,500
            
            $
            0.03








The
      fair
      value of stock options was determined at the grant dates using the Black-Scholes
      option-pricing model with the following weighted-average assumptions for the
      nine months ended September 30, 2005:






**2005**Expected
                dividend yield
            
            
            -Risk
                free interest rate
            
            
            3.91
            %Expected
                volatility
            
            
            276
            %Expected
                life
            
            
            0.13
                yearsWeighted
                average fair value per share
            
            $
            0.02







**NOTE
      12 -SEGMENT INFORMATION**




Segment
      information has been prepared in accordance with SFAS No. 131, “ *Disclosure
      About Segments of an Enterprise and Related Information.”* The
      Company has three reportable segments: electronics assembly, Ethernet
      technology, and contract manufacturing. The electronics assembly segment
      manufactures and assembles circuit boards and electronic component cables.
      The
      Ethernet technology segment designs and manufactures Ethernet cards. The
      contract manufacturing segment manufactures, either directly or through foreign
      subcontractors, certain products under an exclusive manufacturing agreement.
      The
      accounting policies of the segments are consistent with those described in
      the
      summary of significant accounting policies. The Company evaluates performance
      of
      each segment based on earnings or loss from operations. Selected segment
      information is as follows:




**Electronics**
            
            **Ethernet**
            
            **Contract****Assembly**
            
            **Technology**
            
            **Manufacturing**
            
            **Total****September
                30, 2005**Sales
                to external customers
            
            $
            2,355,655
            
            $
            110,886
            
            $
            9,054,870
            
            $
            11,521,411Intersegment
                sales
            
            
            39,613
            
            
            -
            
            
            -
            
            
            39,613Segment
                income (loss)
            
            
            (897,947
            )
            
            (157,307
            )
            
            1,894,797
            
            
            839,543Segment
                assets
            
            
            4,286,743
            
            
            202,626
            
            
            6,163,292
            
            
            10,652,661Depreciation
                and amortization
            
            
            166,420
            
            
            1,633
            
            
            85,648
            
            
            253,701**September
                30, 2004**Sales
                to external customers
            
            $
            2,424,582
            
            $
            46,328
            
            $
            2,759,464
            
            $
            5,230,374Intersegment
                sales
            
            
            11,325
            
            
            167
            
            
            -
            
            
            11,492Segment
                loss
            
            
            (1,011,083
            )
            
            (189,543
            )
            
            (297,047
            )
            
            (1,497,673
            )Segment
                assets
            
            
            2,875,515
            
            
            204,716
            
            
            457,805
            
            
            3,538,036Depreciation
                and amortization
            
            
            168,332
            
            
            1,787
            
            
            11,295
            
            
            181,414






18





**September
                  30,****Sales**
              
              **2005**
              
              **2004**Total
                  sales for reportable segments
              
              $
              11,561,024
              
              $
              5,241,866Elimination
                  of intersegment sales
              
              
              (39,613
              )
              
              (11,492
              )Consolidated
                  net sales
              
              $
              11,521,411
              
              $
              5,230,374
   **September
                  30,****Total
                  Assets**
              
              **2005**
              
              **2004**Total
                  assets for reportable segments
              
              $
              10,652,661
              
              $
              3,538,036Adjustment
                  for intersegment amounts
              
              
              -
              
              
              -Consolidated
                  total assets
              
              $
              10,652,661
              
              $
              3,538,036







**NOTE
      13 - SUBSEQUENT EVENTS**





























19





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





This
      discussion should be read in conjunction with Managements’ Discussion and
      Analysis of Financial Condition and Results of Operations included in our Annual
      Report on Form 10-KSB for the year ended December 31, 2004.





**Overview**





We
      provide a mixture of high and medium size volume turnkey manufacturing services
      using surface mount technology, ball-grid array assembly, pin-through-hole
      and
      custom injection molded cabling for leading electronics OEMs in the
      communications, networking, peripherals, gaming, law enforcement, consumer
      products, telecommunications, automotive, medical, and semiconductor industries.
      Our services include pre-manufacturing, manufacturing and post-manufacturing
      services. Through our subsidiary, Racore Technology Corporation, we design
      and
      manufacture Ethernet technology products. Our goal is to offer customers the
      significant competitive advantages that can be obtained from manufacture
      outsourcing, such as access to advanced manufacturing technologies, shortened
      product time-to-market, reduced cost of production, more effective asset
      utilization, improved inventory management, and increased purchasing
      power.





During
      2004, we established a new division, CirTran-Asia, Inc, which has contributed
      to
      a large portion of the increase in revenue for the year ended December 31,
      2004
      and the nine months ended September 30, 2005. This new division is an
      Asian-based, wholly owned subsidiary of CirTran Corporation and provides a
      myriad of manufacturing services to the direct response and retail consumer
      markets. Our experience and expertise in manufacturing enables CirTran-Asia
      to
      enter a project at any phase: engineering and design, product development and
      prototyping, tooling, and high-volume manufacturing.





CirTran
      has established a dedicated satellite office for CirTran-Asia, and has retained
      Mr. Charles Ho to lead the new division. Having proven the value and reliability
      of its core products, CirTran Corporation has chosen to expand into previously
      untapped product lines. CirTran-Asia will pursue manufacturing relationships
      beyond printed circuit board assemblies, cables, harnesses and injection molding
      systems by establishing complete “box-build” or “turn-key” relationships in the
      electronics, retail, and direct consumer markets.





We
      have
      been preparing since 2003 for this strategic move into the Asian market.
      Management anticipates that this new division will help to elevate CirTran
      to an
      international contract manufacturer status for multiple products in a wide
      variety of industries, and will, in short order, allow us to target large-scale
      contracts. We anticipate that our new clients will be leading manufacturing
      and
      marketing firms in the retail and direct consumer markets.





Information
      relating to developments in our increasing line of fitness products is as
      follows:





On
      June
      7, 2004, we announced that CirTran-Asia had received an initial purchase order
      on May 26, 2004, relating to the manufacture of 80,000 abdominal fitness
      machines. This order was the first order placed with CirTran-Asia under the
      exclusive manufacturing agreement. Subsequently, on June 14, 2004, we received
      another order for 80,000 units of the abdominal fitness machines, which was
      announced on June 16, 2004 and through a separate press release. Since these
      announcements, CirTran-Asia has manufactured and shipped the product, and
      received payments of approximately $5,546,000. On August 13, 2004, we also
      announced that on August 11, 2004 we had received new orders for Wal-Mart.
      The
      company shipped to Wal-Mart the complete order of abdominal fitness machines
      and
      received payments of approximately $400,000 through the date of this Report.
      The
      units were distributed to Wal-Mart stores throughout Canada.





20








On
      September 9, 2004, we announced that on September 6, 2004, CirTran-Asia had
      been
      awarded the rights to manufacture a new abdominal fitness machine under the
      exclusive manufacturing agreement. This new product is another type of abdominal
      fitness machine. Since this announcement, and through the date of this Report,
      CirTran-Asia had manufactured and shipped units, and received payments of
      approximately $42,000.





On
      September 10, 2004, we announced that on September 7, 2004, CirTran-Asia had
      been was awarded the rights to manufacture another type of an abdominal fitness
      machine under the exclusive manufacturing agreement. Since this announcement, and
      through the date of this Report, CirTran-Asia
      had manufactured and shipped units, and received payments of approximately
      $1,130,000.





On
      September 14, 2004, we announced that on September 7, 2004, we had begun
      manufacturing another type of abdominal fitness machine under the exclusive
      manufacturing agreement. Since this announcement, and
      through the date of this Report, CirTran-Asia
      had manufactured, and shipped units, and received payments of approximately
      $620,000.





On
      September 30, 2004, we announced that on September 23, 2004, CirTran-Asia had
      been awarded the rights to manufacture a pilates fitness machine under the
      exclusive manufacturing agreement. Since this announcement, and
      through the date of this Report, CirTran-Asia
      had manufactured and shipped units, and received payments of approximately
      $85,000.





On
      April
      28, 2005, CirTran-Asia announced that it has been awarded a $30 million contract
      to be the exclusive manufacturer of a new fitness machine for the sold-on-TV
      direct response industry. Since then, we have received orders totaling
      approximately $700,000 and had expected to complete the shipment of those orders
      before the end of September 2005. The contract was extended at the customer’s
      request to be weekly shipments. Since these announcements, CirTran-Asia has
      manufactured and shipped approximately $588,000 worth of these units.





Information
      relating to recent developments in new products under development along with
      procuring new products for development is as follows:





On
      August
      11, 2004, we announced that CirTran-Asia received a purchase order on August
      10,
      2004 relating to the manufacture of a household cooking appliance for hot dogs
      and sausages. Since these announcements, and through the date of this Report,
      CirTran-Asia had manufactured and shipped units, and received payments of
      approximately $1,290,000.





On
      October 1, 2004, we entered into an agreement with Transactional Marketing
      Partners, Inc. (“TMP”), for consulting services. Pursuant to the agreement, we
      engaged TMP to provide strategic planning and for introduction of new business
      to us. Under the agreement, we agreed to pay to TMP a fee of ten percent of
      the
      net proceeds received by us from business brought to us by TMP. The fee is
      to be
      paid within 15 calendar days following the end of the month in which we receive
      the net proceeds. Additionally, we agreed to pay $7,500 during each of the
      first
      six months of the term of the agreement, with such payments being viewed as
      an
      advance against the fee to be earned. The advance payments are not refundable,
      but will be deducted from fees earned by TMP . The
      agreement had an initial term of six months, beginning October 1, 2004, and
      could automatically extended for successive six-month periods unless either
      party gives written notice at least 30 days prior to the expiration of the
      term
      of the agreement of its intent not to renew. Additionally, we may terminate
      the
      agreement at any time by giving 30 days’ written notice. In March 2005, we
      extended our agreement an additional 6 months that would expire in early
      September 2005. In September 2005, the parties agreed to another six-month
      extention through March 2006. The parties will evaluate the relationship at
      that
      time and decide if there needs to be another extension. To date the relationship
      has proven successful, resulting in multiple new manufacturing relationships.





21








On
      January 19, 2005, CirTran Corporation signed an Exclusive Manufacturing
      Agreement with a company relating to the manufacture of a hair product in
      California. Since these announcements, CirTran-Asia has manufactured and shipped
      approximately $4,860,000 worth of units of the hair care products. Early
      October, CirTran Corporation was notified that the company had defaulted on
      its
      obligation to its financing company. CirTran Corporation has stopped shipping
      under credit and is in the process of exercising its rights permitted by the
      agreements.





On
      July
      7, 2005, CirTran Corporation signed an Exclusive Manufacturing Agreement with
      a
      company relating to the manufacture of additional hair product in California.
      We
      have already begun shipment on previous contracts and are projecting to begin
      early in 2006.





Information
      relating to other recent developments in our on going electronics business
      and
      lines of products are as follows:





On
      June
      10, 2005, we announced that Racore Technology Inc., (“Racore”), a subsidiary of
      CirTran Corporation, received a purchase order from an established city public
      department on the east coast for fiber optic Ethernet network adapters. Since
      this announcement, the product has been manufactured and shipped, and payment
      has been received. We continue to market and solicit orders on the Racore
      product line from various commercial and public agency clients.





On
      June
      23, 2005, we announced that CirTran Corporation entered the “sold-on-TV” market
      by having its CirTran-Asia subsidiary build consumers' electronics products
      in
      China, and is now bringing business to the United States, refurbishing popular
      skill-stop slot machines from Japan for home amusement use in the United States.
      We continue to receive the imported machines from the customer, perform the
      conversion and refurbishment services and ship directly to the customer.





On
      June
      24, 2005, we announced that Racore received a purchase order from a well-known
      aerospace manufacturing company for fiber optic token-ring network adapters.
      Direct sales of new and repeat business from this company have totaled more
      than
      $30,000. Since this announcement the product has been manufactured and shipped,
      and payment has been received. As of the date of this Report, we have shipped
      an
      additional $40,000 worth of product to this company.





On
      July
      22, 2005, we announced that Racore received a purchase order from the United
      States Air Force for OptiCORE network interface cards.. Since this announcement,
      the product has been manufactured and shipped, and payment has been received.





On
      August
      1, 2005, we announced that Racore received a purchase order for fiber optics
      products from another city public department located in the southern United
      States for fiber optic PCI Ethernet network interface cards with VF-45
      connectors. Since this announcement, the product has been manufactured and
      shipped, and payment has been received.





On
      August
      4, 2005, we announced that Racore received a purchase order from a well-known
      amusement park in the southeastern United States for more than $21,000 worth
      of
      network interface cards. Since this announcement, the product has been
      manufactured and shipped, and payment has been received.





22








On
      August
      9, 2005, we announced that CirTran Corporation completed the first phase of
      the
      redevelopment of the next-generation SafetyNet(TM) RadioBridge(TM). Since this
      announcement, the company has begun working on the second phase of the
      contract.




On
      September 13, 2005, we announced that Racore had been named an "approved vendor"
      by the City of New York. Racore began its current business relationship with
      the
      City of New York in April when it received a request for an evaluation unit
      of
      the Racore M8190A Fiber Optic Fast Ethernet Network Adapters with Volition
      Patch
      Cords. Racore subsequently received an order placed through one of its
      value-added resellers. Since this announcement, the product has been
      manufactured and shipped, and payment has been received.




On
      October 11, 2005, we announced that CirTran Corporation was opening a satellite
      office in Los Angeles in accordance with the company’s internal expansion
      program. The new 2,500-square foot office will be located on the 17th floor
      at
      1875 Century Park East in the Century City Entertainment and Business District
      of Los Angeles. Scheduled to open in late November, the office will serve as
      headquarters for CirTran’s business development and strategic planning
      activities for the company’s multiple business divisions including electronics,
      consumer products, direct response/retail and “as sold-on-TV” products. Current
      plans call for CirTran to open additional satellite offices in New York and
      London in 2006. Since this announcement, we have signed a lease for the office
      space in Los Angles, Ca.





**Significant
      Accounting Policies**





Financial
      Reporting Release No. 60, which was recently released by the Securities and
      Exchange Commission, requires all companies to include a discussion of critical
      accounting policies or methods used in the preparation of financial statements.
      Note 1 of the Notes to the Financial Statements contained in our Annual Report
      on form 10-KSB includes a summary of the significant accounting policies and
      methods used in the preparation of our Financial Statements. The following
      is a
      brief discussion of the more significant accounting policies and methods used
      by
      us.





Our
      discussion and analysis of our financial condition and results of operations
      is
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      These principles require us to make estimates and judgments that affect the
      reported amounts of assets, liabilities, revenues and expenses, and related
      disclosure of contingent assets and liabilities. We base our estimates on
      historical experience and on various other assumptions that are believed to
      be
      reasonable under the circumstances. Estimated amounts may differ under different
      assumptions or conditions, and actual results could differ from the
      estimates.





Revenue
      Recognition





Revenue
      is recognized when products are shipped. Title passes to the customer or
      independent sales representative at the time of shipment. Returns for defective
      items are repaired and sent back to the customer. Historically, expenses
      experienced with such returns have not been significant and have been recognized
      as incurred.





Inventories




Inventories
      are stated at the lower of average cost or market value. Costs include labor,
      material, and overhead costs. Overhead costs are based on indirect costs
      allocated among cost of sales, work-in-process inventory, and finished goods
      inventory. Indirect overhead costs have been charged to cost of sales or
      capitalized as inventory based on management’s estimate of the benefit of
      indirect manufacturing costs to the manufacturing process.







23














When
      there is evidence that the inventory’s value is less than original cost, the
      inventory is reduced to market value. The Company determines market value on
      current resale amounts and whether technological obsolescence exists. The
      Company has agreements with most of its customers that require the customer
      to
      purchase inventory items related to their contracts in the event that the
      contracts are cancelled. The market value of related inventory is based upon
      those agreements.




The
      Company typically orders inventory on a customer-by-customer basis. In doing
      so
      the Company enters into binding agreements that the customer will purchase
      any
      excess inventory after all orders are complete. Almost 80% of the total
      inventory is secured by these agreements.





**Related
      Party Transactions**





Certain
      transactions involving Abacas Ventures, Inc., the Saliba Private Annuity Trust
      and the Saliba Living Trust are regarded as related party transactions under
      FAS
      57. Disclosure concerning these transactions is set out in this Item 2 under
      “Liquidity and Capital Resources - Liquidity and Financing Arrangements,” and in
“Item 5 - Other Information.”





**Results
      of Operations - Comparison of Periods ended September 30, 2005 and
      2004**





*Sales
      and Cost of Sales*





Net
      sales
      increased to $4,291,762 for the three months period ended September 30, 2005,
      as
      compared to $2,626,770 during the same period in 2004, for an increase of 63.4%.
      Net sales increased to $11,521,411 for the nine months period ended September
      30, 2005, as compared to $5,230,374 during the same period in 2004, for an
      increase of 120.3%. The largest factor contributing to the increase of net
      sales
      during the third quarter was the new division, CirTran-Asia, which has
      contributed $1,664,992 and for the nine months ended September 30, 2005, a
      $6,295,406 increase in revenue. CirTran-Asia, the Asian-based wholly owned
      subsidiary of CirTran Corporation, provides a myriad of manufacturing services
      to the direct response and retail consumer markets. Our experience and expertise
      in manufacturing enables CirTran-Asia to enter a project at any phase:
      engineering and design, product development and prototyping, tooling, and
      high-volume manufacturing. Cost of sales increased by 26.6%, from $2,069,828
      during the three months period ended September 30, 2004, to $2,620,109 during
      the same period in 2005. Cost of sales increased by 71.2%, from $4,066,375
      during the nine months period ended September 30, 2004, to $6,962,380 during
      the
      same period in 2005. The increase in cost of sales is due to the increase in
      revenue. Our gross profit margin for the three months period ended September
      30,
      2005, was 39.0%, up from 21.2% for the same period in 2004 Our gross profit
      margin for the nine months period ended September 30, 2005, was 39.6%, up from
      22.3% for the same period in 2004. The majority of the increase is due to a
      considerable increase in CirTran-Asia sales which has consistent and less
      favorable margins compared to the electronics assembly and Ethernet technology
      business operations.





*Inventory*





We
      use
      just-in-time manufacturing, which is a production technique that minimizes
      work-in-process inventory and manufacturing cycle time, while enabling us to
      deliver products to customers in the quantities and time frame required. This
      manufacturing technique requires us to maintain an inventory of component parts
      to meet customer orders. Inventory at September
      30, 2005 ,
      was
      $1,448,585, as compared to $1,453,754 at December 31, 2004. The decrease in
      inventory is nominal.





24








*Selling,
      General and Administrative Expenses*





During
      the three months ended September 30 ,
      2005 ,
      selling, general and administrative expenses were $1,036,565 versus $876,043
      for
      the same period in 2004, an 18.3% increase. During the nine months ended
      September 30 ,
      2005 ,
      selling, general and administrative expenses were $3,565,707 versus $2,240,620
      for the same period in 2004, a 59.1% increase. The increase was due to expenses
      related to the CirTran-Asia division, along with our efforts to aggressively
      market our products. Selling, general and administrative expenses as a
      percentage of sales for the three months ended September 30, 2005 were 24.2%
      as
      compared to 33.4% during the same period in 2004. Selling, general and
      administrative expenses as a percentage of sales for the nine months ended
      September 30, 2005 were 30.9% as compared to 42.8% during the same period in
      2004. This decrease is due in part to an increase in sales and better control
      of
      expenses.





*Interest
      Expense*





Interest
      expense for three months ended September 30 ,
      2005 ,
      was
      $149,732 as compared to $85,446 for the same period in 2004, an increase of
      75.2%. Interest expense for nine months ended September 30 ,
      2005 ,
      was
      $412,530 as compared to $400,039 for the same period in 2004, an increase of
      3.1%. The increase is primarily due to the convertible debenture, discussed
      below.





As
      a
      result of the above factors, we have net income of $575,042 for the quarter
      ended September 30 ,
      2005 ,
      as
      compared to a net loss of ($552,086) for the quarter ended September
      30 ,
      2004.
      This net profit is attributed to a substantial increase in sales and better
      cost
      controls.





Liquidity
      and Capital Resources





Our
      revenues are currently greater than our expenses. We have had a history of
      losses preceeding this quarter, and our accumulated deficit has decreased to
      $17,960,059 at September 30, 2005, compared to $18,799,602 at December 31,
      2004.
      Our net income for the quarter ending September 30, 2005, was $575,042, compared
      to a net loss of ($552,086) for the quarter ended September 30, 2004. Our
      current assets exceeded our current liabilities by $1,946,157 as of September
      30, 2005, and our current liabilities exceeded our current assets by
      ($3,558,826) as of December 31, 2004. The decrease was mostly attributable
      to
      settlements of notes payable, an increase in accounts receivable and inventory
      along with acquiring the building and property. For the nine months ended
      September 30, 2005 and 2004, we had negative cash flows from operations of
      ($1,255,396) and ($1,075,957) respectively.





*Cash*





We
      had
      cash on hand of $377,357 at September 30, 2005, and $81,101 at December 31,
      2004.





Net
      cash
      used in operating activities was $1,255,396 for the nine months ended September
      30, 2005. Cash received from customers of $7,775,664 was not sufficient to
      offset cash paid to vendors, suppliers, and employees of $9,031,060. The
      non-cash charges were for depreciation and amortization of $253,701 and loan
      costs and interest paid from loan proceeds of $67,168. Because the Company
      has
      negative cash flows from operations, it must rely on sources of cash other
      than
      customers to support its operations. It is anticipated that various methods
      of
      equity financing will be required to support operations until cash flows from
      operations are positive.





25








Net
      cash
      used in investing activities during the nine months ended September 30, 2005,
      consisted of equipment purchases of $353,196 and cash acquired with PFE
      acquisition in the amount of $39,331.





Net
      cash
      provided by financing activities was $1,865,367 during the nine months ended
      September 30, 2005. Principal sources of cash were proceeds of $95,586 from
      notes payable to related parties, proceeds from notes payable of $1,732,067,
      and
      proceeds from the exercise of options to purchase common stock of
      $33,300.





*Accounts
      Receivable*





At
      September 30, 2005, we had receivables of $5,034,466, net of a reserve for
      doubtful accounts of $40,867, as compared to $1,288,719 at December 31, 2004,
      net of a reserve of $41,143. This increase was primarily attributed to sales
      having substantially increased in the last month of the third quarter as
      compared to the last two months in 2004. The Company has implemented an
      aggressive process to collect past due accounts over the past several years.
      Individual accounts are continually monitored for collectibilty. As part of
      monitoring individual customer accounts, the Company evaluates the adequacy
      of
      its allowance for doubtful accounts. Since the implementation of the new
      collection process, very few accounts have been deemed uncollectible. In
      addition, the majority of the increase in accounts receivable as of September
      30, 2005, related to sales that occurred in the last month of the quarter.
      Therefore they were not deemed uncollectible.





*Accounts
      Payable*





Accounts
      payable were $2,068,346 at September 30, 2005, as compared to $1,104,392 at
      December 31, 2004. This increase is primarily attributed to the new sales
      generated from our new division, CirTran Asia and to facilitate the continuing
      increase in turnkey sales.





*Liquidity
      and Financing Arrangements*





We
      have a
      history of substantial losses from operations and using rather than providing
      cash in operations. We had an accumulated deficit of $17,960,059 and a total
      stockholders’ equity of $2,868,679 at September 30, 2005. As of September 30,
      2005, our monthly operating costs and interest expenses averaged approximately
      $450,000 per month.





In
      conjunction with our efforts to improve our results of operations, discussed
      above, we are also actively seeking infusions of capital from investors. It
      is
      unlikely that we will be able, in our current financial condition, to obtain
      additional debt financing; and if we did acquire more debt, we would have to
      devote additional cash flow to paying the debt and securing the debt with
      assets. We may therefore have to rely on equity financing to meet our
      anticipated capital needs. There can be no assurances that we will be successful
      in obtaining such capital. If we issue additional shares for debt and/or equity,
      this will dilute the value of our common stock and existing shareholders’
      positions.





**Notes
      Payable to Equity Line Investor** —
      During
      2003, we borrowed a total of $1,830,000 from Cornell Capital Partners, LP,
      pursuant to nine unsecured promissory notes. The loans were made and the notes
      were issued from June 2003 through December 2003. In lieu of interest, we paid
      fees to the lender, ranging from 5% to 10%, of the amount of the loan. These
      fees have been recorded as interest expense. The fees were negotiated in each
      instance and agreed upon by us and by the lender and its affiliate. The notes
      were repayable over periods ranging from 70 days to 131 days. Each of the notes
      stated that if we did not repay the notes when due, a default interest rate
      of
      24% would apply to the unpaid balance. Through December 31, 2003, we directed
      the repayment of $1,180,000 of these notes from proceeds generated under the
      Equity Line Agreement, discussed in Note 10 below. At December 31, 2003, the
      balance owing on these notes was $650,000. All notes were paid when due or
      before, and at no time did we incur the 24% penalty interest rate.





26








During
      the year ended December 31, 2004, Cornell loaned us an additional $3,200,000
      pursuant to four additional unsecured promissory notes, $1,700,000 of which
      remained outstanding at December 31, 2004. The loans were made and the notes
      were issued in January through June 2004, bringing the total aggregate loans
      from Cornell to $5,030,000. As before, in lieu of interest, we paid fees to
      the
      lender, ranging from 4% to 5%, of the amount of the loan. The fees were
      negotiated in each instance and agreed upon by us and by the lender and its
      affiliate. The notes were repayable over periods of 88 days and 193 days. Each
      of the notes stated that if we did not repay the notes when due, a default
      interest rate of 24% would apply to the unpaid balance.





As
      noted
      above, we received proceeds of $5,030,000 from notes payable to Cornell. We
      used
      the proceeds from these notes to fund operating losses of approximately
      $2,938,000, pay down accounts payable, notes payable and other settlements
      of
      approximately $1,401,000, purchase equipment and tooling in the amount of
      $391,000, and to invest in Broadata in the amount of $300,000. During January
      2005, the Company received proceeds of $565,000 from an additional note payable
      to Cornell. We used the proceeds of this note to fund the settlement with the
      Internal Revenue Service





With
      the
      sale of the Debenture in May 2005, $2,265,000 of the proceeds from the sale
      of
      the Debenture were paid to Cornell to repay promissory notes in the amounta
      of
      $1,700,000 and $565,000. Pursuant to an agreement with Cornell, no interest
      was
      paid and the notes were deemed paid in full.





**Prior
      Equity Line of Credit Agreement** - In
      conjunction with efforts to improve the results of our operations, discussed
      above, on November 5, 2002, we entered into an Equity Line of Credit Agreement
      with Cornell. We subsequently terminated that agreement, and on April 8, 2003,
      we entered into an amended equity line agreement (the "Equity Line Agreement")
      with Cornell. Under the Equity Line Agreement, we had the right to draw up
      to
      $5,000,000 from Cornell against an equity line of credit (the "Equity Line"),
      and to put to Cornell shares of our common stock in lieu of repayment of the
      draw. The number of shares to be issued was determined by dividing the amount
      of
      the draw by the lowest closing bid price of our common stock over the five
      trading days after the advance notice was tendered. Cornell was required under
      the Equity Line Agreement to tender the funds requested by us within two trading
      days after the five-trading-day period used to determine the market
      price.





During
      the year ended December 31, 2004, we drew an aggregate amount of $2,150,000
      under the Equity Line Agreement, pursuant to draws on the Equity Line, net
      of
      fees of $86,000, and issued a total of 57,464,386 shares of common stock to
      Cornell under the Equity Line Agreement. We used the proceeds from the equity
      line to pay the notes to Cornell, discussed above.





Pursuant
      to the Equity Line Agreement, in connection with each draw, we agreed to pay
      a
      fee of 4% of the amount of the draw to Cornell as consideration for its
      providing the Equity Line. Total fees paid for the year ended December 31,
      2004
      were $128,000. Of these payments, $86,000 was offset against additional paid-in
      capital as shares were issued under the Equity Line Agreement and $68,000 was
      recorded as deferred offering costs for total deferred offering costs of $68,000
      at December 31, 2004. These deferred offering costs were expensed as the Equity
      Line Agreement was terminated in conjunction with the sale of the Convertible
      Debenture.




In
      May
      2005, the Equity Line Agreement was allowed to expire by its terms. Our last
      draw on the Equity Line was made in July 2004.





27








**Standby
      Equity Distribution Agreement -** We
      entered into a Standby Equity Distribution Agreement (the "Agreement") dated
      May
      21, 2004, with Cornell. Under the Agreement, we had the right, at our sole
      discretion, to sell periodically to Cornell shares of our common stock for
      an
      aggregate purchase price of up to $20 million. The purchase price for the shares
      sold to Cornell was to be equal to the lowest volume-weighted average price
      of
      our common stock during the pricing period consisting of the five consecutive
      trading days after we gave an advance notice. The periodic sale of shares was
      known as an advance. We could request an advance, by giving a written advance
      notice to Cornell, and could not request advances more frequently than every
      seven trading days. A closing was to be held on the first trading day after
      the
      end of the pricing period. The maximum advance amount was one million dollars
      ($1,000,000) per advance, with a minimum of seven trading days between advances.
      In addition, we could not request advances if the shares to be issued in
      connection with such advances would result in Cornell owning more than 9.9%
      of
      our outstanding common stock.





Cornell
      was to retain a commitment fee of 5% of the amount of each advance under the
      Agreement.





With
      the
      sale of the Convertible Debenture in May 2005, the Standby Equity Distribution
      Agreement and related agreements were terminated.





**Convertible
      Debenture -** On
      May
      26, 2005, the Company entered into an agreement with Highgate House Funds,
      Ltd.
      (“Highgate”) to sell to Highgate a $3,750,000, 5% Secured Convertible Debenture
      (the “Debenture”). The Debenture is due December 2007 and is secured by all of
      the Company’s property.




Accrued
      interest is payable at the time of maturity or conversion. The Company may,
      at
      its option, elect to pay accrued interest in cash or shares of the Company’s
      common stock. If paid in stock, the conversion price shall be the closing bid
      price of the common stock on either the date the interest payment is due or
      the
      date on which the interest payment is made.





At
      any
      time, Highgate may elect to convert principal amounts owing on the Debenture
      into shares of the Company’s common stock at a conversion price equal to the
      lesser of $0.10 per share, or an amount equal to the lowest closing bid price
      of
      our common stock for the twenty trading days immediately preceding the
      conversion date. The Company has the right to redeem a portion or the entire
      Debenture then outstanding by paying 105% of the principal amount redeemed
      plus
      accrued interest thereon.





Highgate’s
      right to convert principal amounts into shares of the Company’s common stock is
      limited as follows:




(iv)
            Highgate
                may convert up to $250,000 worth of the principal amount plus accrued
                interest of the Debenture in any consecutive 30-day period when the
                market
                price of the Company’s stock is $0.10 per share or less at the time of
                conversion;


(v)
            Highgate
                may convert up to $500,000 worth of the principal amount plus accrued
                interest of the Debenture in any consecutive 30-day period when the
                price
                of the Company’s stock is greater than $0.10 per share at the time of
                conversion; provided, however, that Highgate may convert in excess
                of the
                foregoing amounts if the Company and Highgate mutually agree;
                and


(vi)
            Upon
                the occurrence of an event of default, Highgate may, in its sole
                discretion, accelerate full repayment of all debentures outstanding
                and
                accrued interest thereon or may convert the Debentures and accrued
                interest thereon into shares of the Company’s common stock.





28







Except
      in
      the event of default, Highgate may not convert the Debenture for a number of
      shares that would result in Highgate owning more than 4.99% of the Company’s
      outstanding common stock.




The
      Company granted Highgate registration rights, pursuant to which the Company
      agreed to file, within 120 days of the closing of the purchase of the debenture,
      a registration statement to register the resale of shares of the Company’s
      common stock issuable upon conversion of the debenture. The Company agreed
      to
      register the resale of up to 100,000,000 shares, and to keep such registration
      statement effective until all of the shares issuable upon conversion of the
      debenture have been sold. The Company filed the registration statement on
      September 23, 2005. As of the date of this report, the registration statement
      had not been declared effective.





The
      Company determined that Highgate LLC received a beneficial conversion option
      and
      allocated $441,402 of the proceeds received to the beneficial conversion option
      that resulted in an offsetting discount to the note payable. The discount on
      the
      note payable is being amortized to interest expense from the date proceeds
      were
      received through December 2007, and amounted to $16,271 of accretion of the
      discount during the nine months ended September 30, 2005.




In
      connection with the sale of the Debenture, $2,265,000 of the proceeds was paid
      directly to Cornell to repay promissory notes. Fees of $256,433 were also
      withheld from the proceeds. As such, of the total Debenture amount of
      $3,750,000, the net proceeds to us were $1,228,567. The proceeds will be used
      for general corporate and working capital purposes, at the Company’s
      discretion.





**Forward-looking
      statements**





All
      statements made in this Report, other than statements of historical fact, which
      address activities, actions, goals, prospects, or new developments that we
      expect or anticipate will or may occur in the future, including such things
      as
      expansion and growth of operations and other such matters, are forward-looking
      statements. Any one or a combination of factors could materially affect our
      operations and financial condition. These factors include competitive pressures,
      success or failure of marketing programs, changes in pricing and availability
      of
      parts inventory, creditor actions, and conditions in the capital markets.
      Forward-looking statements made by us are based on knowledge of our business
      and
      the environment in which we currently operate. Because of the factors listed
      above, as well as other factors beyond our control, actual results may differ
      from those in the forward-looking statements.





**Item
      3. Evaluation of Disclosure Controls and Procedures**





Evaluation
      of Disclosure Controls and Procedures. Our Chief Executive Officer, who is
      also
      our Chief Financial Officer, after evaluating the effectiveness of the Company’s
“disclosure controls and procedures” (as defined in the Securities Exchange Act
      of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period
      covered by this annual report, has concluded that our disclosure controls and
      procedures are effective to provide reasonable assurance that information
      required to be disclosed in our reports filed or submitted under the Exchange
      Act is recorded, processed, summarized, and reported within the applicable
      time
      periods..





29








Changes
      in Internal Control Over Financial Reporting. There were no changes in our
      internal control over financial reporting identified in connection with the
      evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15
      that
      occurred during our last fiscal quarter that have materially affected, or are
      reasonably likely to materially affect, our internal control over financial
      reporting.





Section
      404 Assessment. Section 404 of the Sarbanes-Oxley Act of 2002 requires
      management’s annual review and evaluation of our internal controls, and an
      attestation of the effectiveness of these controls by our independent registered
      public accountants beginning with our Form 10-K for the fiscal year ending
      on
      December 31, 2006. We plan to dedicate significant resources, including
      management time and effort, and to incur substantial costs in connection with
      our Section 404 assessment. The evaluation of our internal controls will be
      conducted under the direction of our senior management. We will continue to
      work
      to improve our controls and procedures, and to educate and train our employees
      on our existing controls and procedures in connection with our efforts to
      maintain an effective controls infrastructure at our Company.





Limitations
      on Effectiveness of Controls. A system of controls, however well designed and
      operated, can provide only reasonable, and not absolute, assurance that the
      system will meet its objectives. The design of a control system is based, in
      part, upon the benefits of the control system relative to its costs. Control
      systems can be circumvented by the individual acts of some persons, by collusion
      of two or more people, or by management override of the control. In addition,
      over time, controls may become inadequate because of changes in conditions,
      or
      the degree of compliance with the policies or procedures may deteriorate. In
      addition, the design of any control system is based in part upon assumptions
      about the likelihood of future events.





While
      our
      disclosure controls and procedures provide reasonable assurance that the
      appropriate information will be available on a timely basis, this assurance
      is
      subject to limitations inherent in any control system, no matter how well
      designed and administered.





**PART
      II. OTHER INFORMATION**





Item
      1.
      Legal Proceedings





As
      of
      September 30, 2005, the Company had accrued liabilities in the amount of
      $143,627 for delinquent payroll taxes, including interest and penalties due
      to
      the State of Utah. In November 2003, the Company entered into an agreement
      with
      the Utah State Tax Commission to allow the Company to pay the liability owing
      to
      the State of Utah in equal monthly installments over a two year period. Under
      the agreement, the Company would make monthly payments of $4,000 per month
      through November 2005. As of November 11, 2005, the Company was current in
      its
      payments to the State of Utah.





As
      of
      December 31, 2004, the Company had accrued liabilities in the amount of $500,000
      for delinquent payroll taxes, including interest and penalties, owed to the
      Internal Revenue Service. The Company, in response to collection notices, filed
      a due process appeal with the Internal Revenue Service's Appeals Office. The
      appeal was resolved by an agreement with the Appeals Office that allowed the
      Company to file an offer in compromise of all federal tax liabilities owed
      by
      the Company based on its ability to pay. The Company filed its offer in
      compromise with the IRS in November 2003, and after meeting with IRS personnel,
      filed a revised offer in compromise on August 31, 2004. The Company was notified
      in November 2004 that the IRS had accepted the offer in compromise. Under the
      offer, the Company was required to pay an aggregate amount of $500,000
      (representing payments of $350,000 by Circuit Technology, Inc., $100,000 by
      CirTran Corporation, and $50,000 by Racore Technology, Inc.), not later than
      February 3, 2005. These amounts were paid. Additionally, the Company must remain
      current in its payment of taxes for 5 years, and may not claim any NOLs for
      the
      years 2001 through 2015, or until the three companies pay taxes in an amount
      equal to the taxes waived by the offer in compromise.





30








We
      (as
      successor to Circuit Technology, Inc.) were a defendant in an action in El
      Paso
      County, Colorado District Court, brought by Sunborne XII, LLC, a Colorado
      limited liability company, for alleged breach of a sublease agreement involving
      facilities located in Colorado. Our liability in this action was originally
      estimated to range up to $2.5 million, and we subsequently filed a counter
      suit
      in the same court against Sunborne in an amount exceeding $500,000 for missing
      equipment. Effective January 18, 2002, we entered into a settlement agreement
      with Sunborne with respect to the above-described litigation. The settlement
      agreement required us to pay Sunborne the sum of $250,000. Of this amount,
      $25,000 was paid upon execution of the agreement, and the balance of $225,000,
      together with interest at 8% per annum, was payable by July 18, 2002. As
      security for payment of the balance, we executed and delivered to Sunborne
      a
      Confession of Judgment and also issued to Sunborne 3,000,000 shares of our
      common stock, which were held in escrow and have been treated as treasury stock
      recorded at no cost. Because 75% of the balance owing under the agreement was
      not paid by May 18, 2002, we were required to prepare and file with the
      Securities & Exchange Commission, at our expense, a registration statement
      with respect to the shares that were escrowed. The payment was not made, nor
      was
      a registration statement filed with respect to the escrowed shares.





Pursuant
      to a Termination of Sublease Agreement dated as of May 22, 2002 among the
      Company, Sunborne and other parties, the sublease agreement that was the subject
      of our litigation with Sunborne was terminated and a payment of approximately
      $109,000 was credited against the amount owed by the Company to Sunborne under
      the Company's settlement agreement with them. Sunborne has filed a claim that
      this amount was to be an additional rent expense rather than a payment on the
      note payable. The Company disputes this claim and intends to vigorously defend
      the action.





As
      of
      September 30, 2005, the Company was in default of its obligations under the
      settlement agreement with Sunborne, i.e., the total payment due thereunder
      had
      not been made, a registration statement with respect to the escrowed shares
      was
      not filed, and the Company did not replace the escrowed shares with registered,
      free-trading shares as per the terms of the agreement. Accordingly, Sunborne
      has
      filed the Confession of Judgment and proceeded with execution thereon.
      Additionally, Sunborne sold the 3,000,000 shares. The Company is continuing
      to
      negotiate with Sunborne in an attempt to settle the remaining
      obligation.





C/S
      Utilities notified the Company that it believes it has a claim against the
      Company in the amount of $32,472 regarding utilities services. The claim was
      assigned to BC Services, Inc., which obtained a judgment against Circuit
      Technology, Inc., for $37,965.84 in El Paso County, Colorado, District Court
      on
      February 13, 2003. The Company is reviewing its records in an effort to confirm
      the validity of the claims and is evaluating its options.





We
      also
      assumed certain liabilities of Circuit Technology, Inc., in connection with
      our
      transactions with that entity in the year 2000, and as a result we are defendant
      in a number of legal actions involving nonpayment of vendors for goods and
      services rendered. We have accrued these payables and have negotiated
      settlements with respect to some of the liabilities, including those detailed
      below, and are currently negotiating settlements with other vendors.





Howard
      Salamon, dba Salamon Brothers vs. CirTran Corporation, Civil No. 2:03-00787,
      U.S. District Court, District of Utah. Howard Salamon originally filed suit
      against the Company in the U.S. District Court, Eastern District of New York,
      seeking payment of a commission, consisting of shares of the Company’s common
      stock valued at $350,000, allegedly owed in connection with Salamon’s
      introducing the Company to Cornell Capital Partners, L.P., the Equity Line
      Investor. The Company disputes the claims in the complaint. The case was
      dismissed in New York and refiled in Utah. The Company has filed its answer
      in
      the Utah case, and the lawsuit is proceeding. The Plaintiff sought leave to
      file
      a supplemental complaint, which the court granted. The Company subsequently
      was
      served with the supplemental complaint, in which Salamon seeks additional
      commissions, consisting of shares of the Company’s common stock valued at
      $1,400,000 (for an aggregate claim of $1,750,000), to which the Company filed
      its answer. The parties filed cross motions for summary judgment. A ruling
      on
      the motions had not been issued as of the date of this report. The Company
      is
      also currently conducting settlement negotiations.





31








RecovAR
      Group, LLC vs. CirTran Corporation, Inc., District Court of Maryland. This
      matter arises from an agreement between the Company and United Parcel Services,
      Inc. ("UPS"). UPS alleges that the Company owes approximately $8,024 for
      services rendered. RecovAR Group, LLC, brought the action on behalf of UPS.
      The
      Company is continuing its settlement negotiations with RecovAR Group,
      LLC.




CirTran
      Asia v. Mindstorm  Civil No. 050902290, Third Judicial District Court,
      Salt
      Lake County, State of Utah.  CirTran Asia brought suit against Mindstorm
      Technologies, LLC, for nonpayment for goods provided.  On April 22,
      2005,
      the defendant filed its answer and counterclaim, following which, defendant's
      counsel withdrew from representation.  CirTran Asia notified defendant
      that
      under local rules it was required to appoint successor counsel.  The
      defendant failed to do so, and CirTran Asia moved for default judgment, which
      was granted.  CirTran Asia submitted a proposed order of default judgment
      in the amount of $288,529.29 to the court in September 2005, which has been
      signed.






CirTran
      Asia, et al. v. International Edge, et al., Civil No. 2:05 CV 413BSJ, U.S.
      District Court, District of Utah.  On May 11, 2005, CirTran Asia, UKING
      System Industry Co., Ltd., and Charles Ho filed suit against International
      Edge,
      Inc., Michael Casey Enterprises, Inc., Michael Casey, David Hayek, and HIPMG,
      Inc., for breach of contract, breach of the implied covenant of good faith
      and
      fair dealing, interference with economic relationships, and fraud in relation
      to
      certain licensing issues relating to the Ab King Pro.  The defendants
      counterclaimed, alleging breach of contract, fraud, defamation and related
      claims, all related to the Ab King Pro.   CirTran Asia and the
      other
      plaintiffs filed their reply to the counterclaim, disputing all of the
      allegations and claims.  International Edge filed a motion to dismiss
      for
      lack of jurisdiction, which was pending as of the date of this report. CirTran
      Asia intends to vigorously pursue this action.






CirTran
      Asia v. Robinson, Civil No. 050915272, Third Judicial District Court, Salt
      Lake
      County, State of Utah.  On August 30, 2005, CirTran Asia brought suit
      against Glenn Robinson, one of the principals of Mindstorm Technologies, LLC,
      for nonpayment for goods provided. Mr. Robinson has filed an answer. 
      CirTran Asia intends to vigorously pursue this action.




Item
      5.
      Other Information





*Abacas
      Ventures*





An
      explanation of the relationship between CirTran and Abacas Ventures, Inc.,
      is as
      follows:





Two
      trusts, the Saliba Living Trust and the Saliba Private Annuity Trust
      (collectively, the “Saliba Trusts”), were investors in Circuit Technology, a
      Utah corporation and predecessor entity of the Company. The trustees of the
      trusts are Tom and Betty Saliba, and Tom Saliba, respectively. (Tom Saliba
      is
      the nephew of the grandfather of Trevor Saliba, one of the directors of
      CirTran.) In July 2000, CirTran Corporation merged with Circuit Technology.
      Through that merger, the Saliba Trusts became shareholders of CirTran. The
      Saliba Trusts are also two of the shareholders of an entity named Abacas
      Ventures, Inc. (“Abacas”). At the time of the merger, CirTran was in default on
      several of its obligations, including an obligation to Imperial Bank. The Saliba
      Trusts, through Abacas, purchased the bank’s claim against CirTran to protect
      their investment in CirTran. Since that time, Abacas has continued to settle
      debts of CirTran to improve Abacas’s position and to take advantage of certain
      discounts that creditors of CirTran offered to settle their claims. On two
      occasions, the Abacas shareholders have agreed to convert outstanding debt
      owed
      by CirTran to Abacas into shares of CirTran common stock (discussed below).
      Abacas continues to work with the company to settle claims by creditors against
      CirTran, and, on occasion, to provide funding. There can be no assurance that
      Abacus will agree to convert its existing debt, or any debt it acquires in
      the
      future, into shares of CirTran, or that conversions will occur at a price and
      on
      terms that are favorable to CirTran. If Abacus and CirTran cannot agree on
      acceptable conversion terms, Abacus may demand payment of some or all of the
      debt. If CirTran does not have sufficient cash or credit facilities to pay
      the
      amount then due and owing by CirTran to Abacus, Abacus may exercise its rights
      as a senior secured lender and commence foreclosure or other proceedings against
      the assets of CirTran. Such actions by Abacus could have a material adverse
      effect upon CirTran and its ability to continue in business.





32








In
      January, 2002, the Company entered into an agreement with Abacas under which
      the
      Company issued an aggregate of 19,987,853 shares of common stock to four of
      Abacas’s shareholders in exchange for cancellation by Abacas of an aggregate
      amount of $1,499,090 in senior debt owed to the creditors by the Company. The
      shares were issued with an exchange price of $0.075 per share, for the aggregate
      amount of $1,500,000.





In
      December, 2002, the Company entered into an agreement with Abacas under which
      the Company issued an aggregate of 30,000,000 shares of common stock to four
      of
      Abacas’s shareholders in exchange for cancellation by Abacas of an aggregate
      amount of $1,500,000 in senior debt owed to the creditors by the Company. The
      shares were issued with an exchange price of $0.05 per share, for the aggregate
      amount of $1,500,000.





During
      2002, the Company entered into a verbal bridge loan agreement with Abacas.
      This
      agreement allows the Company to request funds from Abacas to finance the
      build-up of inventory relating to specific sales. The loan bears interest at
      24%
      and is payable on demand. There are no required monthly payments. During the
      years ended December 31, 2004 and 2003, the Company was advanced $3,128,281
      and
      $350,000, respectively, and made cash payments of $3,025,149 and $875,000,
      respectively.





During
      the year ended December 31, 2004, Abacas completed negotiations with several
      vendors of the Company, whereby Abacas purchased various past due amounts for
      goods and services provided by vendors, as well as notes payable (see Note
      6).
      The total of these obligations was $1,263,713. The Company has recorded this
      transaction as a $1,263,713 non-cash increase to the note payable owed to
      Abacas, pursuant to the terms of the Abacas agreement.





The
      total
      principal amount owed to Abacas between the note payable and the bridge loan
      was
      $1,530,587 and $163,742 as of December 31, 2004 and 2003, respectively. The
      total accrued interest owed to Abacas between the note payable and the bridge
      loan was $430,828 and $230,484 as of December 31, 2004 and 2003, respectively,
      and is included in accrued liabilities.





In
      March
      2005, the shareholders of Abacas agreed to cancel $2,050,000 of principal and
      accrued interest in return for the Company’s issuing 51,250,000 shares of our
      restricted common stock to certain shareholders of Abacas. No registration
      rights were granted.





33








*Additional
      Information*





As
      of
      December 31, 2001, Iehab Hawatmeh had loaned us a total of $1,390,125. The
      loans
      were demand loans, bore interest at 10% per annum and were unsecured. Effective
      January 14, 2002, we entered into four substantially identical agreements with
      existing shareholders pursuant to which we issued an aggregate of 43,321,186
      shares of restricted common stock at a price of $0.075 per share for $500,000
      in
      cash and the cancellation of $2,749,090 principal amount of our debt. Two of
      these agreements were with the Saliba Private Annuity Trust, one of our
      principal shareholders, and a related entity, the Saliba Living Trust. The
      Saliba trusts are also principals of Abacas Ventures, Inc., which entity
      purchased our line of credit in May 2000. Pursuant to the Saliba agreements,
      the
      trusts were issued a total of 26,654,520 shares of common stock in exchange
      for
      $500,000 cash and the cancellation of $1,499,090 of debt. We used the $500,000
      cash from the sale of the shares for working capital. As a result of this
      transaction, the percentage of our common stock owned by the Saliba Private
      Annuity Trust and the Saliba Living Trust increased from approximately 6.73%
      to
      approximately 17.76%. Mr. Trevor Saliba, one of our directors and officers,
      is a
      passive beneficiary of the Saliba Private Annuity Trust. Pursuant to the other
      two agreements made in January 2002, we issued an aggregate of 16,666,666 shares
      of restricted common stock at a price of $0.075 per share in exchange for the
      cancellation of $1,250,000 of notes payable by two shareholders, Mr. Iehab
      Hawatmeh (our president, a director and our principal shareholder) and Mr.
      Rajai
      Hawatmeh. Of these shares, 15,333,333 were issued to Iehab Hawatmeh in exchange
      for the cancellation of $1,150,000 in debt. As a result of this transaction,
      the
      percentage of our common stock owned by Mr. Hawatmeh increased from 19.9% to
      approximately 22.18%.





In
      February 2000, prior to its acquisition of Vermillion Ventures, Inc., a public
      company, Circuit Technology, Inc., while still a private entity, redeemed
      680,145 shares (as presently constituted) of common stock held by Raed Hawatmeh,
      who was a director of Circuit Technology, Inc. at that time, in exchange for
      $80,000 of expenses paid on behalf of the director. No other stated or unstated
      rights, privileges, or agreements existed in conjunction with this redemption.
      This transaction was consistent with other transactions where shares were
      offered for cash.





In
      1999,
      Circuit entered into an agreement with Cogent Capital Corp., or “Cogent,” a
      financial consulting firm, whereby Cogent agreed to assist and provide
      consulting services to Circuit in connection with a possible merger or
      acquisition. Pursuant to the terms of this agreement, we issued 800,000
      (pre-forward split) restricted shares (12,000,000 post-forward split shares)
      of
      our common stock to Cogent in July 2000 in connection with our acquisition
      of
      the assets and certain liabilities of Circuit. The principal of Cogent was
      appointed a director of Circuit after entering into the financial consulting
      agreement and resigned as a director prior to the acquisition of Circuit by
      Vermillion Ventures, Inc. on July 1, 2000.





Also,
      as
      of December 31, 2004 the company owed I&R Properties, LLC, the previous
      owner of our principal office and manufacturing facility for unpaid accrued
      rent
      and accrued interest. The Company settled with owed I&R Properties, LLC., on
      accrued rent and interest of $400,000 by issuing 10,000,000 shares of
      unregistered common stock in March 2005.





Management
      believed at the time of each of these transactions and continues to believe
      that
      each of these transactions were as fair to the Company as could have been made
      with unaffiliated third parties.





*Purchase
      of Interests in Landlord*





On
      March
      31, 2005, the Company entered into a Membership Acquisition Agreement (the
      “Acquisition Agreement”) with Rajayee Sayegh (the “Seller”) for the purchase of
      one hundred percent (100%) of the membership interests in PFE Properties LLC,
      a
      Utah limited liability company (“PFE”). Under the Acquisition Agreement, the
      Company agreed to issue twenty million (20,000,000) shares of its restricted
      common stock, with a fair value of $800,000 on the date of issuance. No
      registration rights were granted. The shares were issued without registration
      under the 1933 Act in reliance on Section 4(2) of the Securities Act of 1933,
      as
      amended (the “1933 Act”), and the rules and regulations promulgated
      thereunder.





34








The
      primary asset of PFE is its rights, titles and interests in and to a parcel
      of
      real property, together with any improvements, rents and profits thereon or
      associated therewith, located at 4125 S. 6000 W., West Valley City, Utah, 84128,
      where the Company presently has its headquarters and manufacturing
      facility.





Prior
      to
      the purchase of the membership interests, on December 17, 2003, the Company
      had
      entered into a ten-year lease with PFE for the property. The lease payments
      were
      $16,974. Following the acquisition of the PFE interests, PFE will continue
      to
      own the building, and the Company will continue to make lease payments under
      the
      2003 lease.





Item
      6.
      Exhibits





Exhibits:31
            Certification32
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002

















35








SIGNATURES





In
      accordance with the Securities Exchange Act of 1934, the registrant caused
      this
      report to be signed on its behalf by the undersigned thereunto duly
      authorized.








CIRTRAN
                CORPORATIONDate:
                November 11, 2005
            By:
            /s/
                Iehab J.
                HawatmehIehab
                J. HawatmehPresident
                and Chief Financial Officer






































36