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**UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                 For the quarterly period ended **March 31, 2002.**

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                 For the transition period from _______________

                        Commission file number **000-11808****SYMPHONY TELECOM CORP**
        (Exact name of small business issuer as specified in its charter)

                                    **DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   **87-0378892
                        (IRS Employer Identification No.)

                **41 George Street South, Brampton, Ontario, Canada**
                    (Address of principal executive offices)

                                 **(905) 457-4300**
                           (Issuer's telephone number)

 -------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                     report)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

   Check whether the registrant filed all documents and reports required to be
 filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
          securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

 State the number of shares outstanding of each of the issuer's classes of common
   equity, as of the latest practicable date: Common Shares outstanding as of
                              May _____, 2002: _______________.

    Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x]

                                       1
**PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                             SYMPHONY TELECOM CORP.

                              FINANCIAL STATEMENTS

                             MARCH 31, 2002 and 2001

                                   (Unaudited)

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                             MARCH 31, 2002 and 2001
                                   (Unaudited)

                                    CONTENTS

                                      Page
FINANCIAL STATEMENTS
    Consolidated Balance Sheets                                                1
    Consolidated Statements of Operations and Other Comprehensive Income       2
    Consolidated Statements of Cash Flows                                      3
    Notes to Financial Statements                                          4 - 9

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                           Consolidated Balance Sheets

                                                                                      March 31           June 30
                                                                                        2002              2001
                                                                                        ----              ----
ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                                   $            -    $       115,123
    Short-term investments, securing letters of credit                                 5,462
    302,971
    Accounts receivable, net of allowance for doubtful
        accounts of $23,516 and $178,014                                               699,284           1,410,436
    Note receivable                                                                    200,                200,000
    Finished Goods Inventory                                                           109,225             157,094
    Income taxes recoverable                                                                 -                  64
    Prepaid expenses                                                                    11,535             280,339
                                                                                --------------    ----------------

TOTAL CURRENT ASSETS                                                                 1,025,506           2,466,027
                                                                                --------------     ---------------

PROPERTY AND EQUIPMENT
    Automobiles, computer equipment and office furniture                               544,366             711,791
    Computer software                                                                  113,006             137,760
    Telephone equipment                                                                 86,598             126,944
                                                                                --------------    ----------------
                                                                                       743,970             976,495
    Less: accumulated depreciation                                                   (344,374)            (379,170)
                                                                                --------------    ----------------

TOTAL PROPERTY AND EQUIPMENT                                                           399,596             597,325
                                                                                --------------    ----------------

OTHER ASSETS
    Goodwill, net                                                                    2,623,802           4,859,012
                                                                                --------------     ---------------

TOTAL OTHER ASSETS                                                                   2,623,802           4,859,012
                                                                                --------------     ---------------

TOTAL ASSETS                                                                    $    4,048,904      $    7,922,364
                                                                                ==============      ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Bank loans                                                                  $       87,896    $        362,414
    Accounts payable                                                                 1,616,369           2,322,315
    Accrued liabilities                                                                631,682             697,277
    Notes payable                                                                      644,668           1,650,210
    Deferred revenue                                                                         -             125,821
    Income taxes payable                                                                    71
                         -
    Current portion of leases payable                                                   16,021              31,561
    Current portion of long-term loans                                                       -              68,795
                                                                                --------------    -----------------

TOTAL CURRENT LIABILITIES                                                            2,996,707           5,258,393
                                                                                --------------    ---------------

OTHER LIABILITIES
    Deferred income taxes                                                                  249
    262
    Leases payable                                                                      22,441              48,748
    Long-term loans                                                                    485,689             860,092
    Notes payable to related parties                                                         -              44,625
                                                                                --------------    ----------------

TOTAL OTHER LIABILITIES                                                                508,379             953,727
                                                                                --------------    ----------------

TOTAL CURRENT AND OTHER LIABILITIES                                                  3,505,086           6,212,120

MINORITY INTEREST                                                                      115,557             514,895

STOCKHOLDERS' EQUITY
    Common stock: $0.0001 par value, 100,000,000 shares authorized;
        47,427,075 and 29,355,830 shares  issued and outstanding                         4,743               2,935
    Preferred stock: $0.0001 par value, 100,000,000 shares authorized; none issued
    Additional paid-in capital                                                       7,982,994           7,398,450
    Contributed capital                                                                 31,474              31,474
    Retained earnings (deficit)                                                     (7,450,890)         (6,024,987)
    Accumulated other comprehensive income (loss)
        Cumulative translation adjustments                                            (140,060)            (212,523)
                                                                                 ----------------------------------

TOTAL STOCKHOLDERS' EQUITY                                                              428,261          1,195,349
                                                                                ---------------    ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $     4,048,904     $    7,922,364
                                                                                ================    ==============
   The accompanying notes are an integral part of these financial statements

                                       1

      Consolidated Statements of Operations and Other Comprehensive Income
           For the Nine and Three Months Ended March 31, 2002 and 2001
                                   (Unaudited)

                                                            Three Months      Three Months     Nine Months      Nine Months
                                                                Ended             Ended            Ended             Ended
                                                              March 31,          March 31,       March 31,          March 31,
                                                                2002              2001             2002              2001
                                                                ----              ----             ----              ----
REVENUE
    Phone cards                                      $                -       $2,488,452        $3,099,195       $5,525,226
    Telephone services                                           39,781          770,305           234,520        2,670,508
      Sales of equipment and systems                             38,770          227,042           173,033          514,532
    Internet services                                           110,900           43,398           261,118          130,433
    Directory management                                        132,953           83,759           538,984           98,118
    Maintenance contracts                                             -            5,794                   -         22,056
                                                     ------------------   -------------- -------------------  -------------
    TOTAL SALES                                                 322,404        3,618,750         4,306,850        8,960,874
                                                           ------------      -----------     -------------      -----------

COST OF GOODS SOLD
    Cost of phone cards                                               -        3,297,599         2,588,935        5,484,326
    Cost of telephone services                                   17,818          524,050           207,986        1,546,065
    Cost of equipment and systems sold                           11,768          131,862           111,110          337,025
    Cost of internet services                                    70,775           45,122          171,5445          115,075
    Cost of directory management                                105,253           73,618           451,855           89,542
                                                           ------------    -------------     -------------    -------------
    TOTAL COST OF GOODS SOLD                                    205,614        4,072,251         3,531,430        7,572,033
                                                           ------------      -----------      ------------      -----------

GROSS PROFIT                                                    116,790        (453,501)           775,420        1,388,841
                                                           ------------      -----------     -------------      -----------

SELLING & GENERAL EXPENSES
    Selling expense                                               4,542           17,251            18,905          123,163
    General and administrative expense                          529,024        1,542,009         1,457,977        4,229,767
    Amortization and depreciation                               228,587          292,282           415,099          801,167
                                                          -------------     ------------     -------------     ------------
    TOTAL SELLING & GENERAL EXPENSES                        762,153        1,851,542         1,891,981        5,154,096
                                                          -------------      -----------      ------------     -----------

        (LOSS) FROM OPERATIONS                                (645,363)      (2,305,043)         (480,670)      (3,765,255)
                                                          ------------     ------------         ----------     -----------

OTHER (INCOME) AND EXPENSES
    Other (income)                                              (9,887)                -                 -          (2,802)
    Other expenses:
         Loss on disposition of interest in subsidiaries        204,482                -           590,588                -
         Bad debts                                                4,057            6,423             3,840           28,160
         Interest expense                                        49,125            6,486            67,681           47,351
                                                         --------------   --------------    --------------    -------------
         Total other expenses                                   257,664           12,909           662,109           75,511
                                                         --------------    -------------     -------------    -------------

    TOTAL OTHER (INCOME) AND EXPENSES                           247,777           12,909           662,109           72,709

NET (LOSS) BEFORE  INCOME TAXES AND MINORITY
      INTEREST IN EARNINGS OF CONSOLIDATED
      SUBSIDIARIES                                            (893,140)      (2,317,952)         (1,142,779)      (3,837,964)

INCOME TAXES (RECOVERED)                                              -            -                     -                -
MINORITY INTEREST IN EARNINGS OF
     CONSOLIDATED SUBSIDIARIES                                   76,413       (436,662)           (77,180)        (346,865)
                                                         --------------  --------------  ---------------------------------

NET (LOSS)                                                    (969,553)      (1,881,290)       (1,065,599)      (3,491,099)
                                                           -----------    -------------      -------------    -------------

 OTHER COMPREHENSIVE INCOME (LOSS)
    Foreign currency translation adjustments                  1,049,373        (125,029)            72,463        (113,487)
                                                           ------------   -------------    --------------------------------

     TOTAL OTHER COMPREHENSIVE INCOME                         1,049,373         (125,029)           72,463         (113,487)
                                                           -----------------------------   --------------- -----------------

           TOTAL COMPREHENSIVE (LOSS)                     $      79,820    $ (2,006,319)        $(993,136)    $ (3,604,586)
                                                          =============    ============         ==========    =============

Weighted average number of common shares outstanding
     Primary                                                 47,427,075       17,527,709        47,427,075       17,527,709
                                                             ==========       ==========        ==========       ==========

     Fully diluted                                           47,427,075       20,503,039        47,427,075       20,503,039
                                                             ==========       ==========        ==========       ==========

Basic net (loss) per share
      Primary                                              $       0.00       $   (0.11)       $    (0.02)     $     (0.21)
                                                           ============       ==========       ===========     ============
      Fully diluted                                        $       0.00          $ (0.10)      $    (0.02)     $     (0.18)
                                                           ============       ==========       ===========      ============

 The accompanying notes are an integral part of these financial statements

                                       2

                      Consolidated Statements of Cash Flows
            For the Nine-Month Periods Ended March 31, 2002 and 2001
                                   (Unaudited)
                                                                                       March 31          March 31
                                                                                          2002             2001
                                                                                          ----             ----

CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)                                                                           $   (1,065,599)  $   (3,491,099)
Adjustments to reconcile net (loss) to net cash used
    by operating activities:
    Imputed interest                                                                             -            18,513
    Consulting fees, salaries and other services for common stock                           102,488          137,917
    Depreciation and amortization expense                                                   429,265          801,167
    Changes in assets and liabilities:
           Decrease in short-term investments                                               297,509                -
        (Increase) decrease in accounts receivable                                          751,206       (1,606,048)
        (Increase) in notes receivable                                                            -         (385,184)
        (Increase) in prepaid expenses                                                      268,805
        (170,470)
        (Increase) in inventories                                                            47,868          (65,445)
        Increase (decrease) in accounts payable                                            (705,944)       2,452,887
        (Decrease) in accrued liabilities                                                   (65,595)         (35,484)
        (Decrease) in deferred revenue                                                     (125,821)               -
        (Decrease) increase in deferred income taxes                                            (13)             252
        Increase (decrease) in income taxes payable                                             134             (264)
        Current portion of leases payable                                                   (15,540)               -
        Current portion of long-term loans                                                  (68,795)               -
                                                                                     -----------------    ------------------

           NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                                (510,336)      (2,343,258)
                                                                                        -------------     -------------

CASH FLOWS FROM INVESTING ACTIVITIES
    (Acquisition) of property and equipment                                                  232,525        (494,344)
    (Additions) to other intangible assets                                                 2,296,242      (1,447,210)
                                                                                     --------------   ---------------

           NET CASH (USED) BY INVESTING ACTIVITIES                                        2,528,767       (1,941,554)
                                                                                     --------------   ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
    (Repayment of) proceeds from bank loans                                                (274,518)         189,479
    (Repayment of) proceeds from leases payable                                             (26,307)          86,916
    (Repayment of) proceeds from notes payable                                           (1,005,542)       1,902,410
    (Repayment of) proceeds from long-term loans                                           (107,073)              -
    (Repayment of) notes payable to related parties                                             -
    (53,955)
    Proceeds from common stock                                                               66,100        2,688,341
    Minority interest                                                                      (399,338)        (336,413)
                                                                                     ----------------  -----------------

           NET CASH PROVIDED BY FINANCING ACTIVITIES                                     (1,746,678)       4,476,778
                                                                                     ----------------  --------------

EFFECT OF FOREIGN CURRENCY TRANSACTIONS ON CASH                                            (386,876)        (171,407)
                                                                                      ----------------      --------

INCREASE IN CASH AND CASH EQUIVALENTS                                                      (115,123)          20,559

CASH AND CASH EQUIVALENTS, beginning of period                                              115,123          275,823
                                                                                     --------------   -----------------

CASH AND CASH EQUIVALENTS, end of period                                             $            -   $      296,382
                                                                                     ==============   =====================

SUPPLEMENTAL DISCLOSURES
Interest paid                                                                        $       67,681   $       26,559
Income taxes paid                                                                    $           -    $           -
Schedule of non-cash investing and financing activities:
Purchase of net assets from Mondetta Telecommunications Inc.                         $                $    2,408,464

   The accompanying notes are an integral part of these financial statements

                                       3

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.  BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Regulation S-B of the Securities
and Exchange Commission. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements and should be read in conjunction with Notes to
Consolidated Financial Statements contained in the Company's Annual Report on
Form 10-KSB for the year ended June 30, 2001. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six months ended
December 31, 2001 are not necessarily indicative of the results that may be
expected for the year ended June 30, 2002.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

Symphony Telecom Corp. ("Company") was incorporated on February 9, 2001 under
the laws of the State of Delaware. On May 14, 2001 the Company's shareholders
approved the merger of Symphony Telecom International, Inc. into Symphony
Telecom Corp., which was registered on June 7, 2001. Symphony Telecom
International, Inc. was incorporated January 15, 1982 as Mammoth Resources, Inc.
under the laws of the State of Utah. The Company changed its name to Symphony
Telecom International, Inc. by a resolution of the Board of Directors on March
23, 2000.

Pursuant to an Agreement and Plan of Reorganization dated March 9, 2000, the
Company acquired all the issued and outstanding shares of Symphony Telecom
International, Inc., a company incorporated under the laws of the State of
Delaware, in a non-cash transaction.

As part of its reorganization, the Company authorized a one for five reverse
stock split of existing issued common shares, resulting in the number being
reduced from 16,278,357 to 3,255,684. On the same date, and not subject to the
reverse stock split, the Company authorized issuance of 7,924,375 common shares
in restricted form being a one for one exchange of shares for all the issued and
outstanding shares of Symphony Telecom International, Inc. Further, two
directors were issued an additional 1,000,000 common each and 1,200,000 shares
were issued to consultants for services rendered with the transaction.
The change in control of the Company and the simultaneous March 9, 2000
acquisition of Symphony Telecom, Inc. (Delaware) has been accounted for on the
basis of a reverse acquisition, whereby combining financial statements gives
effect to the acquired company continuing to report as if it was the acquirer.
The financial statements as presented reflect the results of the combined
entities.

Symphony Telecom International, Inc. (the acquired company) was
incorporated under the laws of the State of Delaware on December 4, 1998, to
acquire Symphony Telecom Inc., an affiliated company engaged in providing
telephone services principally in southern Ontario, Canada. Symphony Telecom
Inc. was formed May 27, 1996 under the Business Corporations Act of Ontario,
Canada for the purpose of providing a broad range of telecommunication services
including voice and data transmission, internet services, and other related
services for North American and international markets. Pursuant to an Agreement
and Plan of Reorganization dated March 29, 1999, Symphony Telecom International,
Inc. acquired all of the common shares of Symphony Telecom Inc. in a non-cash
transaction on the basis of one Symphony Telecom International, Inc. share for
each Symphony Telecom Inc. share. A total of 7,351,875 shares were issued to
effect the acquisition. These shares were restricted for purposes of resale.
Over a period of twelve months, the right to sell the shares accrued on a
straight-line basis.

As a result of a subsidiary's agreement to purchase business assets and
customer listing, an option has been authorized by the board of directors of the
subsidiary company for 35,000 common shares at $3.00 per share, expiring
December 31, 2000. This agreement has been assumed by the Board of Directors of
the Company on its acquisition of Symphony Telecom International, Inc. As of
December 31, 2000 this option has not been exercised.

Effective July 1, 2000 Comtel Communications Inc. purchased certain assets,
including customer base, accounts receivable, name and other intangible assets
less certain trade payables of Mondetta Telecommunications Inc., a company
incorporated under the Canada Business Corporations Act, which provides
international long distance telephone services, directed mostly to retail and
residential ethnic populations across Canada, as well as small business
segments.

The transaction was non-cash after assumption of net liabilities of
$786,956, with the total purchase price of $3,195,420; Net purchase price of
$2,408,464 being satisfied by issue of 1,050,000 common shares of Symphony
Telecom Corp. with each common share having attached a warrant to purchase one
common share at the price of $3, expiring September 30, 2001. Subsequently,
October 1, 2000, all the assets acquired from Mondetta were transferred into a
newly incorporated company in Ontario Canada, named Mondetta Communications
Corp.

The net purchase price of  $2,408,464 was allocated as follows:

         Fair value of net assets (liabilities)              $(    786,956)
         Goodwill                                             $  3,195,420

Effective July 31, 2000 Comtel Communications Inc. purchased 61.5% of all
the issued and outstanding shares of Telemax Communications Inc., a company
incorporated in Ontario, Canada, which promotes and markets prepaid telephone
cards for national and international long distance telephone services directed
mostly to ethnic populations across Canada. The purchase was accounted for using
the purchase method of accounting and the results of operations have been
consolidated from the effective date of acquisition.

                                       4.

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

The purchase price of $4,830,361 was satisfied by cash payment of $166,277
on closing, a promissory note in amount of $2,690,000 and the issuance of
1,000,000 common shares, each attached with a one share warrant, of Comtel
Communications Inc., which are convertible, by September 30, 2005, into common
shares of Symphony Telecom Corp. for a value representing $1,995,330. The
issuance of Symphony Telecom Corp.'s common shares will be restricted for the
purposes of resale for a period of one year. A further three payments of
$166,278 each are due and payable up to and including September 30, 2001 upon
Telemax Communications Inc.'s first year's revenues reaching cumulative targets
of $10,087,500, $20,175,000 and $30,262,500 respectively. Comtel Communications
Inc. is also to provide Telemax Communications Inc., under terms of its
promissory note, with four equal payments of $672,500 for working capital by
October 31 and December 31, 2000, and March 31 and June 30, 2001.

The purchase price of $4,830,361 was allocated as follows:
         Fair market value of net assets                      $   984,040
         Goodwill                                             $ 3,846,321

Comtel Communications Inc. has paid $166,277 on closing and a further payment of
$166,278 in October 2000. No other payments have been made, resulting in the
company being in default on its promissory note. Effective October 31, 2001, the
Company's subsidiary company, Comtel Communications Inc. reached a settlement
with minority shareholders of its subsidiary company Telemax Communications Inc,
wherein they agreed to acquire Comtel Communications Inc.'s 61.5% controlling
interest in Telemax Communications Inc. for a total sale price of $136,204,
being paid by trade credit of $53,848 and a promissory note of $82,356 bearing
no interest and maturing in two years. As a result, Telemax Communications Inc.
has been removed from these consolidated financial statements for the six months
period ended December 31, 2001.

On August 31, 2000 Symphony Telecom Corp. purchased 51% of all the shares
of 9041-6868 Quebec Inc. operating as Directory Management America Dot Com, a
company incorporated in Quebec, Canada, which provides marketing and advertising
services, specifically to yellow pages and e-commerce advertising agencies
throughout North America, which gives national support for businesses.

The purchase price of $339,790 is an all cash transaction, with $135,916
paid at closing and the balance payable in 3 equal monthly installments. The
Company has only paid one full monthly installment, with a balance of $120,211
remaining payable at June 30, 2001. Because of Symphony Telecom Corp.'s
non-payment, Directory Management America Dot Com had to seek a line of credit
of $82,562 from its bankers, which was guaranteed by a minority shareholder. To
compensate the minority shareholder, Directory Management America Dot Com issued
1,665,306 common shares to the minority shareholder, thereby diluting Symphony
Telecom Corp.'s interest from 51.0% to 42.4%. The additional share issue
agreement allows Symphony Telecom Corp. to complete its payment for shares, and
purchase the additional shares to restore its diluted interest.

The purchase price of $339,790 was allocated as follows:
         Fair market value of net assets                      $ 114,725
         Goodwill                                             $ 225,065

Goodwill is being amortized on the straight-line basis with an estimated life of
5 years.

On August 28, 2000, the Company entered into a private placement agreement
with Geek Securities, Inc. to provide, on a best efforts basis, up to $100
million for common shares. In June 2000, Geek Securities, Inc. privately placed
660,000 common shares of Symphony Telecom Corp., restricted for the purposes of
resale for a period of one year, netting the Company $780,000. In December 2000,
the Company concluded its agreement with Geek Securities, Inc.

Mondetta Communications Corp. a wholly owned subsidiary of Comtel
Communications Inc.

d a Notice of Intention to Make a Proposal on July 19, 2001. This was
precipitated by a demand by AT&T Canada Corp. for immediate payment in full
of a promissory note dated January 15, 2001 in amount of $664,824.The Notice
named AT&T Canada Corp. and Comtel Communications Inc. as two principal
creditors. AT&T Canada Corp. has the position that it was not bound by the
automatic stay pursuant to the said proceeding and in fact has indicated that it
does not consider Mondetta Communications Corp. to owe it any money. All
operations in Mondetta Communications Corp. have ceased; after the voluntary
liquidation has been completed the company will no longer be consolidated.

In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the fiscal year
ending June 30, 2002.

2. GOING CONCERN AND MANAGEMENT PLAN

The Company has minimal capital resources presently available to meet
obligations, which normally can be expected to be incurred by similar companies,
has recurring operating losses, a working capital deficiency, and negative cash
flows from operating activities. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company will have to
pursue other sources of capital, such as additional equity financing or debt
financing. There is no assurance that the Company will be able to obtain such
financing; however, the Company is continuing its efforts to raise funding to
meets its operating requirements, and plans for immediate expansion. The
financial statements do not include any adjustments that might result from the
outcome of this going concern uncertainty. Management's plans over the next
twelve-month period are to further develop its telecommunications pursuits in
North America, mainly through acquisitions that require substantial funding.
There is no assurance the Company will be able to obtain such financing.

                                       5.

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, cash and
cash equivalents consist of money market funds and demand deposits in banks,
purchased with a maturity of three months or less. The Company has no such items
at December 31, 2001 and 2000.

SHORT-TERM INVESTMENTS At December 31, 2001 $5,462 is held by Mondetta
Communications Corp. in a Guaranteed Investment Certificate as security for its
VISA account.

INVENTORY Inventory is valued at the lower of cost or market using the first-in,
first out method.

INCOME TAXES The Company filed separate corporate federal income tax returns
through December 31, 1998. Due to changes in control occurring in 2000, the
Company has net operating loss carry-forwards available to offset financial
statement or tax return taxable income in future periods as follows:

                  2001              $5,928,808                Expires in 2008

The Company uses the asset and liability method of accounting for income taxes.
At September 30, 2001 and 2000, respectively, the deferred tax asset and
deferred tax liability accounts, as recorded when material to the financial
statements, are entirely the result of temporary differences. Temporary
differences represent differences in the recognition of assets and liabilities
for tax and financial reporting purposes, primarily non-deductible accrued
compensation amounts payable to an officer.

USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

NET LOSS PER COMMON SHARE The Company presents "basic" earnings (loss) per share
and, if applicable, "diluted" earnings (loss) per share pursuant to the
provisions of Statement of Financial Accounting Standards No. 128, Earnings Per
Share (SFAS 128). Basic net earnings (loss) per share is calculated by dividing
net income or loss by the weighted average number of shares outstanding during
each period. The diluted earnings (loss) per share is calculated by dividing the
net income or loss by the weighted average number of shares outstanding during
each period plus the weighted average of the 3,478,572 warrants and 18,750,000
common share options that were outstanding at June 30, 2001 and of the 35,000
options outstanding at June 30, 2000. However, since there is a net loss for
each period, the diluted weighted average number of shares is the same as the
basic. Also, the shares were numbered as though the April 10, 2001 3 to 2
forward stock split occurred on June 30, 1999.

FAIR VALUE OF FINANCIAL INSTRUMENTS The Company estimates that the fair value of
all financial instruments at December 31, 2001 does not differ materially from
the aggregate carrying values of its financial instruments recorded in the
balance sheet. The estimated fair value of amounts of receivables, accounts
payable and accrued liabilities approximate fair value due to their short-term
nature. Considerable judgement is necessarily required in interpreting market
data to develop the estimates of fair value, and accordingly, the estimates are
not necessarily indicative of the amounts that the Company could realize in a
current market exchange.

PROPERTY AND EQUIPMENT Computer equipment, office furniture, systems
software and telephone equipment are stated at cost. Expenditures for normal
maintenance and repairs are charged to expense as incurred. Depreciation is
computed using reducing balance method based upon the estimated useful lives of
the related assets. Depreciation expense was $55,775 for the six-month period
ended December 31, 2001 and $56,595 for the six-month period ended December 31,
2000.

                                                     Estimated                  Rate and
                  Asset Class                            Lives                   Method
                  -----------                        -------------               ------
                  Automobiles                          13 years                 30%per annum on reducing balance
                  Computer Equipment                   13 years                 30%per annum on reducing balance
                  Computer Software                     5 years                 20%per annum on straight-line
                  Leasehold Improvements                5 years                 20%per annum on straight-line
                  Office Furniture                     20 years                 20%per annum on reducing balance
                  Telephone Equipment                  16 years                 25%per annum on reducing balance

The details of property and equipment are as follows:
                                                                                        Net              Net
                                                                 Accumulated          March 31        March 31
                                                 Cost            Depreciation           2002             2001
                                            --------------       ------------           ----             ----
         Automobile                         $        9,032    $      (5,615)    $       3,417    $        7,020
         Computer Equipment                        267,701         (129,775)          137,926           240,586
         Computer Software                         113,006          (98,832)           14,174            16,612
         Leasehold Improvements                     81,029          (15,395)           65,634            74,486
         Office Furniture                          186,604          (50,645)          135,959           200,006
         Telephone Equipment                        86,598          (44,112)           42,486            85,565
                                            --------------    --------------    --------------   --------------
                                            $      743,970     $   (344,374)       $  399,596    $      624,275
                                            ===================================================================

                                       6.

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

REVENUE AND COST RECOGNITION For financial statement reporting, the Company
recognizes revenues when earned and the related cost when incurred.

PRINCIPLES OF CONSOLIDATION The financial statements include the accounts of
Symphony Telecom Corp., a Delaware corporation, and its subsidiaries, Linkdata
Communications London Ontario Inc., 9041-6868 Quebec Inc. o/a Directory
Management America Dot Com, Symphony Networks Inc. and Symphony Telecom
International, Inc., a Delaware corporation, and its subsidiaries Comtel
Communications Inc. and subsidiaries of Comtel Communications Inc.,
Communication Solutions Group Ltd., Mondetta Communications Corp., and Canadian
Inter-Latin Communications Inc., and a subsidiary of Canadian Inter-Latin
Communications Inc., Canadian Inter-Continental of Ecuador SA. All subsidiaries
of Symphony Telecom Corp. are Canadian corporations except Symphony Telecom
International, Inc. (Delaware) and Canadian Inter-Continental Communications of
Ecuador SA, which was incorporated in Ecuador (collectively, the
"Subsidiaries"). All significant inter-company transactions and balances have
been eliminated in consolidation. The consolidated group is referred to
collectively and individually as the "Company".

MINORITY INTEREST At December 31, 2001 the amount for minority interest
represents a 57.60% interest in the subsidiary 9041-6868 Quebec Inc., a company
incorporated under the laws of the province of Quebec, Canada on September 26,
1996; and a 25% interest in the subsidiary, Canadian Inter-Continental
Communications of Ecuador SA, a company incorporated under the laws of Ecuador
on November 23, 1998. At December 31, 2000 the amount for minority interest
represents 38.5% interest in subsidiary, Telemax Communications Inc.; 49%
interest in 9041-6868 Quebec Inc.; 25% interest in subsidiary, Canadian
Inter-Continental Communications of Ecuador SA; and 12% interest in Comtel
Communications Inc. The minority interest in net loss of subsidiaries has been
credited to income and charged to minority interest.

RECLASSIFICATIONS Certain amounts in the accompanying financial statements
have been reclassified to better reflect the Company's operations, in the
opinion of management. These reclassifications have been reflected in all
amounts shown in the accompanying financial statements.

NEW ACCOUNTING STANDARDS Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" ("SFAS" No. 130) issued by the FASB is
effective for financial statements with fiscal years beginning after December
15, 1997. SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. The Company adopted SFAS No. 130 as of June 30, 1997.

Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No. 131") issued by
the FASB is effective for financial statements with fiscal years beginning after
December 15, 1977. SFAS No. 131 requires that public companies report certain
information about operating segments, products, services and geographical areas
in which they operate and their major customers. The Company has adopted SFAS
No. 131 since incorporation and it had no effect on its financial position or
results of operations.

Statement of Position 98-5, "Reporting on the Costs of Start-up Activities,"
("SOP 98-5") issued by the American Institute of Certified Public Accountants is
effective for financial statements beginning after December 15, 1998. SOP 98-5
requires that the costs of start-up activities, including organization costs, be
expensed as incurred. Start-up activities are defined broadly as those one-time
activities related to opening a new facility, introducing a new product or
service, conducting business in a new territory, conducting business with a new
class of customers (excluding ongoing customer acquisition costs, such as policy
acquisition costs and loan origination costs) or beneficiary, initiating a new
process in an existing facility, or commencing some new operation.

4. SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

The Company is Canadian based, and as such carries out its operations in
Canada. The subsidiary company in Ecuador has remained inactive since inception.
However, the Company includes as part of its targets the U.S. small business
consumer market. The primary business lines are: telephone services, primarily
long distance resale; voice and data equipment and systems, which are marketed
by Comtel Communications Inc. and Linkdata Communications London Ontario Inc.;
internet services, provided primarily by Linkdata; and Yellow Pages advertising,
operated by Directory Management America.Com.

5. NOTE RECEIVABLE

The Company's subsidiary Comtel Communications Inc. advanced a non-interest
bearing loan of $400,000 to North American Gateway Inc. in the form of a
promissory note, with personal guarantees of the principal shareholder for the
first $200,000, and a general security over the company's assets for the
remainder. The term is for one year maturing in October 2001. North American
Gateway Inc. has ceased operations; therefore, management provided $200,000 as a
charge against income as an uncollectible debt in its fiscal year ended June 30,
2001, and expects to collect on the personal guarantee.

6.  BANK LOANS

Bank loans comprise the following:
                  Line of credit                     $ 56,504
                  Line of credit                        15,696
                  Line of credit                        15,696
                                                     ---------
                                                     $ 87,896
                                                     ========

The Company's subsidiary company Linkdata Communications London Ontario
Inc. has a line of credit of up to $62,783 with interest at the bank's prime
plus 0.50%, secured by a general security agreement over the company's assets,
of which it has drawn down $56,504 at December 31, 2001.

                                       7.

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

The Company's subsidiary company Comtel Communications Inc. has a line of
credit of $15,696 with interest at the bank's prime rate plus 2.0%, of which it
has drawn down in full at December 31, 2001. The credit facility is secured by a
general security agreement, and a corporate guarantee from its subsidiary
company, Mondetta Communications Corp., supported by a first ranking general
assignment of its book debts.

The Company's subsidiary company 9041-6868 Quebec Inc. has a line of credit
of up to $78,479 with interest at the bank's prime plus 2.50%, secured by a
director's principal residence up to $53,365, and a general security agreement
over the company's assets, of which it has drawn down $15,696 at December 31,
2001.

7.  NOTES PAYABLE AND PROMISSORY NOTE

Notes and promissory notes comprise the following:
                                                                  March 31,            March 31,
                                                                    2002                  2001
                                                                    ----                  ----

         Officers and directors of subsidiary companies        $     12,728            $   716,881
         Balance payable on acquisition of
              Linkdata Communications London Ontario Inc.                 -                 33,344
         Promissory note to AT& T Canada Corp.                      631,940                671,255
                                                                ------------           -----------
                                                                $   644,668             $1,421,480
                                                                ===========             ==========

Notes due to officers and directors of subsidiary companies are
non-interest bearing, unsecured and due upon demand. The balance payable on the
acquisition of Linkdata Communications London Ontario Inc. is non-interest
bearing, secured by term deposits at bank, and due on June 28, 2001. A
promissory note of $931,940 was made by Mondetta Telecommunications Inc. on May
19, 2000 to AT&T Canada Corp. This note was assumed by Comtel Communications
Inc. on the assets purchase from Mondetta Telecommunications Inc. July 1, 2000,
and transferred to Mondetta Communications Corp. on October 1, 2000. The
promissory note payable to AT&T Canada Corp. was rewritten at $637,657 on
January 15, 2001 by Comtel Communications Inc. secured by receivables of
Mondetta Communications Corp., on March 9, 2001, bearing interest at 8.5%, and
payable in twelve equal monthly instalments of $57,578 including interest. As
the promissory note has become in arrears, AT&T Canada Corp. has made a demand
for payment in full, which neither Mondetta Communications Corp. nor Comtel
Communications Inc. are able to pay.

8.  LONG-TERM DEBT

Long-term debt is summarized as follows:
                                                                   March 31,            March 31,
                                                                      2002                 2001
                                                                      ----                  ----

         Convertible Notes payable to Laurus Master Fund             $485,689        $       -
         Less: current portion                                              -                -
                                                                  --------------         ----------

                                                                     $485,689         $      -
                                                                     ========         ================

     Convertible Notes payable to Laurus Master Fund bear simple interest at 8%,
payable quarterly, and mature March 2003. The notes are convertible into fully
paid and non-assessable common stock of the Company at the conversion price of
80% of the average of the four lowest closing bid prices for thirty trading days
prior to but not including the conversion date. The Company is in default under
the terms of the loans, as it has not filed Form SB-2, Registration Statement
Under the Securities Act of 1933, which it is required to have filed within 90
days of the Loan Agreement.

9. COMMITMENTS

     On October 15, 2000 the Company moved its head office to Brampton, Ontario,
Canada and has entered into a five-year lease on 20,000 square foot building,
prepaying one year's rent of $82,931. The Company's total rent and lease expense
was $108,718 for the six-month period ended December 31, 2001 and $87,208 for
the six-month period ended December 31, 2000. The Company has leased premises,
equipment and automobiles, which have been accounted for as operating leases.
Lease payments required over the next five years are as follows:

                  Year     Operating          Capitalized
                  ----     -----------------  -----------
                  2002     $152,138           $18,338
                  2003     $141,914           $16,021
                  2004     $130,879           $14,431
                  2005     $132,359           $     -
                  2006     $ 32,785           $     -

10. GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill represents the excess of the purchase price over the fair value of
acquired businesses and, with other intangible assets, is being amortized on
straight-line basis. The life of goodwill arising on acquisitions, and the life
of other intangible assets is estimated to have lives of five years.
Amortization expense was $373,490 for the nine-month period ended March 31, 2002
and $467,417 for the nine-month period ended March 31, 2001.

                                       8.

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

10. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

The details of goodwill and other intangible assets are as follows:
                                                                               Net              Net
                                                         Accumulated        March 31,        March 31,
                                          Cost          Amortization          2002             2001
                                     --------------     ------------          ----             ----

         Goodwill                    $    3,830,678    $    1,206,876   $    2,623,802    $    4,351,098
                                     ==============    ==============   ===============   ==============

11. EMPLOYEE/CONSULTANTCOMMON STOCK PLAN 2001

Effective September 19, 2001 the Board of Directors approved the
Employee/Consultant Stock Plan 2001, wherein 6,000,000 shares of the common
stock of the Company may be issued directly or upon exercise of options, with
terms set by management, to employees or consultants for compensation and/or
services. The class of securities to be offered is registered under Section 12
of the Exchange Act. No shares or options under the plan were issued at December
31, 2001.

12. FOREIGN ASSETS, REVENUES AND CONSOLIDATED FOREIGN ENTITIES

The Company is presently Canadian based, and as such carries out its
operations in Canada. Symphony Telecom Corp. and subsidiary companies maintain
their books using Canadian dollars. The books of these companies have been
translated into U.S. dollars using the current rate method. Gains and losses on
foreign currency transactions are included in the consolidated statements of
other comprehensive loss.

13. CONTINGENT LIABILITIES

On July 23, 2001 a former employee of Comtel Communications Inc. issued a
claim against Symphony Telecom Corp. for unpaid wages in amount of $60,817.
Management believes that the claim will be dismissed against Symphony Telecom
Corp. in its entirety. Mediation efforts failed in October 2001, and a
counterclaim will be issued against the employee. Management believes that no
further liability will be assessed against the Company.

14. RELATED PARTY TRANSACTIONS

Related party transactions at December 31, 2001 and 2000 comprised advances
by directors to subsidiary companies as stated in Note 7, and advances by
directors to the Company were converted into common stock in October 2001. The
three directors were issued 10,000 common shares each, on account of director's
fees in lieu of cash payment. There were no other material related party
transactions.

15. SUBSEQUENT EVENTS

Mondetta Communications Corp. a wholly owned subsidiary of Comtel
Communications Inc. filed a Notice of Intention to Make a Proposal on July 19,
2001. This was precipitated by a demand by AT&T Canada Corp. for immediate
payment in full of a promissory note dated January 15, 2001 in amount of
$664,824.The Notice named AT&T Canada Corp. and Comtel Communications Inc. as
two principal creditors. As AT&T Canada Corp. has the position that it was not
bound by the automatic stay pursuant to the said proceeding and in fact has
indicated that it does not consider Mondetta Communications Corp. to owe it any
money. At December 31, 2001 the company, which is inactive, is still being wound
up.

                                       9.

**Item 2. Management's Discussion and Analysis or Plan of Operation.

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

The following discussion should be read in conjunction with the Financial
Statements and Notes thereto contained elsewhere herein. Please note that no
assurance exists as to the actual future outcome of Management's plans,
assumptions or estimates. Historically the Company has experienced losses from
operations. Management anticipates that losses will substantially decrease as
the business units are integrated and businesses are acquired, with revenues
substantially increasing. No guarantee exists.

The Company's books are kept in Canadian dollars and translated to US dollars
for reporting purposes. It is sometimes possible that subtracting the result for
the current quarter from figures reported previously will yield a number which
is slightly different from that reported in a previous quarter. Any such
discrepancy is due to currency translation rate differences that may apply at
the time the financial reports are prepared.

RESULTS OF OPERATIONS - SECOND QUARTER AND FIRST HALF OF FISCAL YEAR ENDING JUNE
30, 2002 COMPARED TO SECOND QUARTER AND FIRST HALF OF FISCAL YEAR ENDED JUNE 30,
2001.

Management continues to take steps to achieve profitable operations; many of
these actions, by eliminating unprofitable operations, will result in a
short-term reduction in gross revenue for the corporation.

The company's overall revenue performance in fiscal second quarter 2002, at
$322.404, shows a decrease of 91% over the three months ended December 30,2000.
This decrease was essentially the result of our divestiture of Telemax
Communications Inc. the corporation's pre-paid phone card business. The Company
divested itself of all interest in Telemax in a settlement with the Telemax
minority shareholders in November 2001 after reporting a net loss in the
pre-paid phone card business of $645 thousand on sales of $7.7 million for the
fiscal year ending June 30 2001. The Company has announced it's new pre-paid
phone card program that it will operate through majority-owned subsidiary, Sound
Tel Inc. The program is expected to quickly exceed the business which the
Corporation has been reporting through the operations of Telemax.

Sales of $811,660 for the six months ended December 31, 2001 reflect a
restatement of the first quarter revenues to remove $3.134 million in phone card
revenue previously reported in the first quarter of his fiscal year. The
six-month sales results are down 85% from the previous year reflecting the
restatement of phone card revenue as well as a 90% revenue reduction in
telephone service segment.

                                       2

Results within the Telephone Services category continue to show a substantial
year-over year decline. This decrease reflects the effects of significant
cost-cutting measures and in-year attrition in our customer base due to several
factors: a dispute with our principal carrier, AT&T Canada resulted in a denial
of service by the carrier which caused us to move traffic onto more expensive
routes and disrupted service to many of our customers; increased competition in
our industry resulting in lower rates to several international destinations, in
some cases by more than 50%; the failure of many of our competitors resulted in
a number of our business customers, afraid of loosing their basic service,
migrating to the incumbent local exchange carrier; and a general slowdown in the
economy. However, the win-back and new sales program in place has shown early
signs of success.

For the voice and data systems business units the company is reporting a
decrease in revenue of 64% for the second quarter and 49% for the first six
months, compared to the previous year. Management attributes this year over year
decline to a general weakening of the economy as well as a reduction in
personnel as a result of cost reduction and downsizing.

Internet services sales show a year-over-year gain for the second quarter and
first half of the year of 135% and 107% respectively.

Revenue from directory management activities were up in the quarter and first
half of the year by 653% and 1587%, as this business unit continues its start-up
growth phase.

The company is reporting an overall gross margin for the second quarter and
first half of fiscal year ending June 30, 2002 of 36% and 19% respectively. This
compares to FY2001 gross margin results of 35% and 33%.

In the Telephone Services operating segment, the company achieved a gross margin
of 55% in the second quarter of fiscal year ending 2002 compared to 50% in the
comparable quarter last year. The gross margin in this segment of our business
has typically been in the 40%+ range.

Margins on equipment and systems at 70% for the second quarter and 14% for the
first half reflect the result of restructuring and downsizing as the company
strives to reduce cost. The comparable gross margin in this business the
previous year was 12% and 31%. Margins in this business vary widely depending on
the mix of voice and data product sold and installed.

Gross Margin in the directory management category at 21% for the quarter and
12.6% for the first six months, compared to 2% and minus 7% for the previous
year, reflects continuing improvement in the gross margin of this segment as the
business matures.

The company continued to take steps to reduce its Selling, General and
Administrative expenses in fiscal 2Q 2002, resulting in a 64% reduction in this
area quarter over quarter. With the inclusion of amortization and depreciation
total selling and general expenses, at $762 thousand show a substantial
reduction compared to the corresponding quarter last year when total selling and
general expenses were $1.8 million. Results for the first half of fiscal 2002
compared with fiscal 2001 show a decrease in SG&A expenses of 57%.

                                       3

Loss from operations at $645 thousand, or 200% of sales for the current quarter
compares to a loss of $545 thousand, or 15% of sales for this quarter of the
previous year. Operating losses, were a result of the divestiture of the Telemax
operation; other business segment revenue losses and noted above and
infrastructure downsizing, particularly in sales executives and customer
engineers. Due to the current weakness in the economy our staff build up did not
translate into the anticipated volume of business and management have taken
steps to significantly reduce these costs. The company did not achieve its
targeted sales and is delayed in its current business plan but continues to
strive for positive cash flow before the end of the fiscal year 2002. Management
are continuing to take steps to achieve profitable operations, many of these
actions, by eliminating unprofitable operations will result in a short-term
reduction in gross revenue for the corporation.

FINANCIAL CONDITION

The Company has been substantially dependent on the proceeds of various
offerings of its securities to fund its operating expenses. Management believes
that by relying upon anticipated cash flow from business operations, private
placement offerings of shares, and some commercial borrowing, it will meet its
current commitments and requirements for the balance of the year. Management
believes that the ability of the Company to achieve substantial profitability in
the short term is conditional primarily upon the successful operation of its
business units and their future operating results.

The Company continues to explore opportunities with various investors, joint
venture candidates, and prospective licensees. The Company has various pursuits
for equity funding, underway for both the short and long term needs of the
Company. Management believes that current funding, as well as others in
potential private placements will assist the Company in meeting its cash needs,
but there is no guarantee.

OUTLOOK

We have seen a rapid and increasingly severe downturn in the economy, which has
affected growth in demand for our products and services. We expect the economic
downturn to continue well into the fourth quarter of fiscal 2002, there can be
no certainty as to the degree of the severity or duration of this downturn. We
also cannot predict the extent and timing, if any, of the impact of the economic
downturn on the North American economy. However, with the substantial growth of
the Internet and the increased volume of data network traffic, we are focusing
on the expected high growth areas of demand for packet networking for voice,
data and convergent services.

During the current economic uncertainty we have scaled down our operations and
re-organized our business units to focus on their areas of expertise. We are
also committed to meeting the market demand for network solutions that address
the needs of specific vertical markets, including but not limited to: desktop
videoconferencing; IP networking solutions for Virtual Private Networks over the
public Internet and mobile telecommunications solutions.

                                       4

The Company continues to position itself to take advantage of the opportunities
for change in the telecommunications marketplace by quickly implementing market
solutions using a new generation of equipment and technology. Much of our
strategy originally hinged on the deployment of next generation technology from
leading suppliers in the industry. We have curtailed our network development
plans particularly those related to previously announced purchase agreements.
The company, in an effort to achieve profitability in the short term, has
restructured to focus on its strengths in the various telecom segments.

In our restructuring of Symphony Telecom's operations we determined that we
needed to take a more hands on approach to the pre-paid phone card business in
order to achieve short-term profitability. The Corporation divested itself of
all interest in Telemax in a settlement with its minority shareholders in
November 2001. and has announced the launch of a new pre-paid phone card program
which it will operate through its Sound Tel Inc. subsidiary. Through SoundTel we
expect to maintain our market position while achieving profitability and
positive cash flow. This program is expected to quickly exceed the business
which the Corporation has previously been reporting through the operations of
Telemax

Sound Tel Inc., a recently formed Ontario corporation has, in its first few
weeks of operation, booked approximately $100 thousand in sales. The company is
on schedule to achieve $2.4 million in sales in its first year of operation. The
company has a strong network of key distribution channels and is working to
develop innovative distribution opportunities through affinity programs.

We intend to continue to compete for current and future market opportunities by
using our existing portfolio of network solutions and services, by refining and
deploying the available technology to meet the specific service demands of our
target markets; and by acquiring or aligning with companies that have new,
attractive product offerings and technologies. Our ability to develop or acquire
technologies, products and services to fulfill the changing needs of our
customers and address new market opportunities is critical to our future
success. To cost-effectively deploy services we have recognised the need to have
a level of proprietary technology and have been working to that end. The Company
recently announced that it has completed a deal to acquire 100% of Netsoft
Canada Inc, a software development house focused on the development of leading
edge VoIP technology and applications for the global telecommunications
marketplace. Netsoft Canada Inc. is affiliated with, holds a 25% stake in, and
an option to acquire a controlling interest in, Netsoft India Ltd., which has
been in business for over four years as a leading software development house and
Internet Service Provider headquartered in New Delhi, India.

Netsoft has been a partner in Symphony's development plans for some time. We
have been working together to produce a breakthrough in voice over IP solutions.
This acquisition offers us the ability to develop leading edge software
solutions at very competitive costs. We are very pleased to be able to bring
this technology and expertise in-house and feel this acquisition brings us a
significant leap forward in our converged IP based strategy. Netsoft is a unique
innovative technology company with the technology to provide unprecedented low
cost solutions to the global VoIP marketplace.

                                       5

Forward Looking Statements: Certain statements herein constitute forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
activity, performance, or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "could," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential," or
"continue" or the negative of such terms or other comparable terminology.
Although expectations reflected in the forward-looking statements are believed
to be reasonable, there is no guarantee of future results, levels of activity,
performance, or achievements. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of such statements. The Company
does not undertake to update any of the forward-looking statements herein.

                           **PART II- OTHER INFORMATION

Item 1. Legal Proceedings.**

Legal Proceedings against Comtel Communications Inc. and Communications
Solutions Group Ltd. and Mondetta Communications Corp., subsidiaries of Symphony
Telecom Corp. Telemax Communications Inc. and its shareholders excluding Comtel
Communications Inc. commenced an action in June of 2001 in the Ontario Superior
Court of Justice against a subsidiary of the Corporation, Comtel Communications
Inc., for a declaration that the July 31, 2000 issuance of Telemax shares is
void due to non payment, for rescission of the Telemax share purchase
agreements, for the return of the share certificates of Telemax held by Symphony
Telecom Inc. and for misrepresentation damages for $12,670.200. This litigation
has been settled effective as of November 7, 2001. A formal order dismissing the
action on consent and without costs was issued in Ontario Superior Court on
January 8, 2002.

**Item 2. Changes in Securities.**

     During the current quarter, we effected the following transactions in
reliance upon exemptions from registration under the Securities Act, as amended.
Unless stated otherwise; (i) that each of the persons who received these
unregistered securities had knowledge and experience in financial and business
matters which allowed them to evaluate the merits and risk of the receipt of
these securities, and that they were knowledgeable about our operations and
financial condition; (ii) no underwriter participated in, nor did we pay any
commissions or fees to any underwriter in connection with the transactions;
(iii) the transactions did not involve a public offerings; and (iv) each
certificate issued for these unregistered securities contained a legend stating
that the securities have not been registered under the Act and setting forth the
restrictions on the transferability and the sale of the securities.

On October 17, 2001 we issued 1,900,088 restricted shares to Gilles Trahan and
1,901,000 restricted shares to Daniel Cullen pursuant to a 4(2) private
placement.

                                       6

On November 6, 2001, in a private placement pursuant to Section 4(2) of the
Securities Act, we issued 100,000 restricted securities to Mario Giangioppo in
satisfaction of consulting services rendered.

On November 6, 2001 the Company issued 4,300,000 shares each to Gilles A. Trahan
and Daniel Cullen under an agreement to indemnify them from the loss of their
shareholding which had been pledged to The Laurus Group as security for a
$750,000 funding under a convertible debenture issued in March, 2001. In a
consent agreement Laurus accepted the default shares as consideration for the
monies advanced.

In January through March, 2002, the following issuuances occured:

**Item 3.****Item 4. Submission of Matters to a Vote of Security Holders.

There were no matters put to a vote of Security Holders in the three months
ended March 31, 2002.

**Item 5. Other Information.

On January 4, 2002, the Company's Board of Directors elected Syed Ali to fill
one of the two vacant positions in the Board of Directors and subsequently
accepted the resignation of Ross Campbell as a member of the Company's Board of
Directors, and the resignation of Daniel G. Cullen as the Company's President
and as a member of the Board of Directors. Both Directors resigned for personal
reasons, there having been no disagreement on any matter relating to the
Company's operations, policies or practices. Both Directors have agreed to
continue as advisors to the board. Mr. Cullen will continue to provide
assistance to the company primarily in a technical capacity.

At the same meeting the Board of Directors unanimously appointed Gilles A.
Trahan President, Treasurer, and Chief Executive Officer of the Company.

Mr. Ali has, for the last several years, been an entrepreneur with interests in
several businesses in Canada, India, the Middle East and Africa. He has held
interests in telecommunications ventures in Saudi Arabia and India, Mr Ali has a
20 year background in the precious metals industry, having served as precious
metals (gold) controller for Leach and Garner for eight years and as president
of Riviera Metals for more than a decade. Mr Ali holds a degree in Mechanical
Engineering.

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

None.

                                       7

                                   SIGNATURES

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

                                           SYMPHONY TELECOM CORP
                                              (Registrant)

Date: May 24, 2002                   /s/ Gilles A. Trahan
                                         Gilles A. Trahan, CEO****************
```