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 September 30, 2001

[ ]  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
September 30, 2001: 31,355,830

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

<PAGE>

                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.










                             SYMPHONY TELECOM CORP.


                        CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2001 and 2000


                                   (Unaudited)









<PAGE>

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                           SEPTEMBER 30, 2001 and 2000
                                   (Unaudited)



                                    CONTENTS

                                                                            Page
FINANCIAL STATEMENTS
    Consolidated Balance Sheets                                                1

    Consolidated Statements of Operations and Other Comprehensive (Loss)       2

    Consolidated Statements of Cash Flows                                      3

    Notes to Consolidated Financial Statements                             4- 10





<PAGE>
<TABLE>
<CAPTION>

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                           Consolidated Balance Sheets


                                                                                     September 30      June 30
                                                                                          2001           2001
                                                                                          ----           ----
<S>                                                                                   <C>            <C>

ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                                         $   145,932    $   115,123
    Short-term investments, securing letters of credit                                    132,214        302,971
    Accounts receivable, net of allowance for doubtful
        accounts of $173,100 and $121,059                                               1,873,791      1,410,436
    Note receivable                                                                       200,000        200,000
    Finished Goods Inventory                                                              325,699        157,094
    Income taxes recoverable                                                                   61             64
    Prepaid expenses                                                                      194,414        280,339
                                                                                      -----------    -----------

TOTAL CURRENT ASSETS                                                                    2,872,111      2,466,027
                                                                                      -----------    -----------

PROPERTY AND EQUIPMENT
    Automobiles, computer equipment and office furniture                                  690,326        711,791
    Systems software                                                                      133,754        137,760
    Telephone equipment                                                                   121,757        126,944
                                                                                      -----------    -----------
                                                                                          945,837        976,495
    Less: accumulated depreciation                                                       (403,372)      (379,170)
                                                                                      -----------    -----------

TOTAL PROPERTY AND EQUIPMENT                                                              542,465        597,325
                                                                                      -----------    -----------

OTHER ASSETS
    Goodwill, net                                                                       4,375,133      4,859,012
                                                                                      -----------    -----------

TOTAL OTHER ASSETS                                                                      4,375,133      4,859,012
                                                                                      -----------    -----------

TOTAL ASSETS                                                                          $ 7,789,709    $ 7,922,364
                                                                                      ===========    ===========



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Bank loans                                                                        $   244,429    $   362,414
    Accounts payable                                                                    2,943,169      2,322,315
    Accrued liabilities                                                                   792,852        697,277
    Notes payable                                                                       1,582,778      1,650,210
    Deferred revenue                                                                      120,680        125,821
    Current portion of leases payable                                                      28,517         31,561
    Current portion of long-term loans                                                     58,065         68,795
                                                                                      -----------    -----------


TOTAL CURRENT LIABILITIES                                                               5,770,490      5,258,393
                                                                                      -----------    -----------

OTHER LIABILITIES
    Deferred income taxes                                                                     252            262
    Leases payable                                                                         42,714         48,748
    Long-term loans                                                                       842,432        860,092
    Notes payable to related parties                                                       53,617         44,625
                                                                                      -----------    -----------
        TOTAL OTHER LIABILITIES                                                           939,015        953,727
                                                                                      -----------    -----------

TOTAL CURRENT AND OTHER LIABILITIES                                                     6,709,505      6,212,120

MINORITY INTEREST                                                                       1,344,374        514,895

STOCKHOLDERS' (DEFICIT) EQUITY
        Common stock: $0.0001 par value, 100,000,000 shares authorized;
        31,355,830 and 29,355,830 shares  issued and outstanding                            3,136          2,935
    Preferred stock,: $0.0001 par value, 100,000,000 shares authorized;
        none issued
    Additional paid-in capital                                                          7,490,477      7,398,450
    Contributed capital                                                                    31,474         31,474
    Accumulated deficit                                                                (6,599,824)    (6,024,987)

    Accumulated other comprehensive income (loss)
        Cumulative translation adjustments                                             (1,189,433)      (212,523)
                                                                                      -----------    -----------


        TOTAL STOCKHOLDERS' (DEFICIT) EQUITY                                             (264,170)     1,195,349
                                                                                      -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                  $ 7,789,709    $ 7,922,364
                                                                                      ===========    ===========

</TABLE>

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

                                       1.


<PAGE>
<TABLE>
<CAPTION>


                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                    Consolidated Statements of Operations and
                           Other Comprehensive (Loss)
          For the Three-Month Periods Ended September 30, 2001 and 2000
                                   (Unaudited)
                                                         September 30    September 30
                                                              2001            2000
                                                              ----            ----
<S>                                                      <C>             <C>

REVENUE
    Telephone services                                   $    155,934    $  1,046,032
    Phone cards                                             3,084,851
                                                                              671,015
    Sales of equipment and systems                            150,344         195,332
    Internet services                                          44,139          43,705
    Directory Management                                      168,421          11,996
                                                         ------------    ------------

TOTAL SALES                                                 3,603,689       1,968,080
                                                         ------------    ------------

COST OF SALES
    Cost of telephone services                                155,715         587,355
    Cost of phone cards                                     2,580,952         631,039
    Cost of equipment and systems sold                        117,462         132,930
    Cost of internet services                                  38,783          32,147
    Cost of directory management                              157,695           8,602
                                                         ------------    ------------


TOTAL COST OF SALES                                         3,050,607       1,392,073
                                                         ------------    ------------

GROSS PROFIT                                                  553,082         576,007
                                                         ------------    ------------

SELLING & GENERAL EXPENSES
    Selling expense                                           127,519          60,432
    General and administrative expense                        725,322       1,209,923
    Amortization and depreciation                             332,866         259,794
                                                         ------------    ------------

    TOTAL SELLING & GENERAL EXPENSES                        1,185,707       1,530,149
                                                         ------------    ------------

        (LOSS) FROM OPERATIONS                               (632,625)       (954,142)
                                                         ------------    ------------

OTHER (INCOME) AND EXPENSES
    Other (income)                                             (9,523)        (14,933)
    Other expenses:
         Bad debts                                                 65           9,353
         Interest, long-term                                   18,308          16,767
                                                         ------------    ------------
         Total other expenses                                  18,373          26,120
                                                         ------------    ------------

    TOTAL OTHER (INCOME) AND EXPENSES                           8,850          11,187
                                                         ------------    ------------

NET (LOSS) BEFORE  MINORITY INTEREST IN EARNINGS
     OF CONSOLIDATED SUBSIDIARIES                            (641,475)       (965,329)

MINORITY INTEREST IN EARNINGS OF
     CONSOLIDATED SUBSIDIARIES                                 66,639         106,878
                                                         ------------    ------------

        NET (LOSS)                                           (574,836)       (858,451)
                                                         ------------    ------------
         OTHER COMPREHENSIVE INCOME (LOSS)
              Foreign currency translation adjustments       (976,910)         32,259
                                                         ------------    ------------

         TOTAL OTHER COMPREHENSIVE INCOME (LOSS)             (976,910)         32,259
                                                         ------------    ------------

           TOTAL COMPREHENSIVE (LOSS)                    $ (1,551,746)   $   (826,192)
                                                         ============    ============

Weighted average number of common shares outstanding
     Basic                                                 29,573,221      25,589,885
                                                         ============    ============

     Diluted                                               29,573,221      25,589,885
                                                         ============    ============

Net (loss) per common share
     Basic                                               $      (0.05)   $      (0.03)
                                                         ============    ============
     Diluted                                             $      (0.05)   $      (0.03)
                                                         ============    ============
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements
                                       2.

<PAGE>
<TABLE>
<CAPTION>

                             SYMPHONY TELECOM CORP.
                                AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                           For the Three-Month Periods
                        Ended September 30, 2001 and 2000
                                   (Unaudited)
                                                                    September 30   September 30
                                                                        2001           2000
                                                                        ----           ----
<S>                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)                                                          $  (574,836)   $  (858,451)
Adjustments to reconcile net (loss) to net cash used
    by operating activities:
    Consulting fees for common stock                                     15,046           --
    Depreciation and amortization expense                               332,866        259,794
    Changes in assets and liabilities:
        (Increase) in short-term investments                            170,758           --
        (Increase) in accounts receivable                              (463,354)    (1,027,533)
        (Increase) in prepaid expenses                                   85,925       (114,964)
        (Increase) in inventories                                      (168,605)       (49,120)
        (Decrease) in bank loans                                       (117,985)          --
        Increase in accounts payable                                    697,936      2,299,537
        Increase (decrease) in accrued liabilities                       95,575        (71,706)
        Increase in notes payable                                       (67,433)       614,920
        (Decrease) in deferred revenue                                   (5,141)          --
        Increase (decrease) in income taxes payable                           3             (3)
        (Decrease) in deferred income taxes payable                         (11)          --
        (Decrease) increase in current portion of leases payable         (3,043)        36,484
        (Decrease) in current portion of long-term loans payable        (10,730)          --
                                                                    -----------    -----------

           NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES             (13,029)     1,088,958
                                                                    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    (Acquisition) of property and equipment                              (9,245)      (253,506)
    (Additions) to other intangible assets                                 --       (1,854,450)
                                                                    -----------    -----------

           NET CASH (USED) BY INVESTING ACTIVITIES                       (9,245)    (2,107,956)
                                                                    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    (Repayment) advances from leases payable                             (6,033)       104,537
    (Current ) portion of leases payable                                   --          (36,484)
    (Repayment) of long-term loans                                      (17,660)          --
    Advances from (repayment of) notes payable to related parties         8,992        (17,338)
    Proceeds from common stock                                             --        1,256,235
    Minority interest                                                   829,479       (105,561)
                                                                    -----------    -----------

           NET CASH PROVIDED BY FINANCING ACTIVITIES                    814,778      1,201,389
                                                                    -----------    -----------

EFFECT OF FOREIGN CURRENCY TRANSACTIONS ON CASH                        (761,592)        23,422
                                                                    -----------    -----------


INCREASE IN CASH AND CASH EQUIVALENTS                                    30,912        205,813

CASH AND CASH EQUIVALENTS, beginning of period                          115,020        275,823
                                                                    -----------    -----------

CASH AND CASH EQUIVALENTS, end of period                            $   145,932    $   481,636
                                                                    ===========    ===========


SUPPLEMENTAL DISCLOSURES
Interest paid                                                       $   (18,309)   $   (16,767)
Income taxes paid                                                   $      --      $      --
Schedule of non-cash investing and financing activities:
    Acquisition of Telemax Communications Inc.                      $      --      $ 1,005,236
    Purchase of net assets from Mondetta Telecommunications Inc.    $      --      $ 1,366,950
</TABLE>





The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                       3.



<PAGE>

                             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 three months
ended September 30, 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.

<PAGE>

                             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.  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.

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.  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.  Accordingly,  the
trustee in  Bankruptcy  was  instructed  to cancel  the  Notice,  failing  which
Mondetta  Communications  Corp.  will bring an action to set aside the Notice in
its entirety.

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, a
significant  amount of which is currently being arranged.  There is no assurance
the Company will be able to obtain such financing.

                                       5.

<PAGE>
<TABLE>
<CAPTION>

                             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 September 30, 2001 and 2000.

SHORT-TERM   INVESTMENTS  Telemax  Communications  Inc.,  subsidiary  of  Comtel
Communications Inc., holds one year Guaranteed Investment Certificates in amount
of $126,702  maturing December 31, 2001, which have been pledged as security for
letters of credit in amount of $126,702 in favour of its service provider. Also,
$5,512 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 September 30, 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  $39,450 for the  three-month  period  ended
September 30, 2001 and $20,964 for the  three-month  period ended  September 30,
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    September 30  September 30
                                     Cost        Depreciation      2001          2000
                                   ---------     ------------    ---------     ---------
<S>                                <C>            <C>            <C>           <C>
Automobile                         $   9,113      $  (5,362)     $   3,751     $   7,569
Computer Equipment                   360,822       (154,701)       206,121       174,091
Leasehold Improvements                81,762        (11,855)        69,907         9,864
Office Furniture                     133,750        (36,202)        97,548        43,264
Systems Software                     133,754       (117,624)        16,130        16,020
Telephone Equipment                  121,757        (53,580)        68,177        85,271
                                   ---------      ---------      ---------     ---------
Subtotal                             840,958       (379,324)       461,634       336,079
Capital Leases, office equipment     104,879        (24,048)        80,831       102,524
                                   ---------      ---------      ---------     ---------
                                   $ 945,837      $(403,372)     $ 542,465     $ 438,603
                                   =========      =========      =========     =========
</TABLE>



                                       6.

<PAGE>

                             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 Telemax
Communications  Inc.,  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  September  30,  2001 the  amount for  minority  interest
represents a 38.5% interest in the  subsidiary  Telemax  Communications  Inc., a
company  incorporated  under the laws of the province of Ontario,  Canada on May
12, 1997; 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;   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; and a 12% interest in the subsidiary Comtel Communications
Inc., a company  incorporated under the laws of the province of Ontario,  Canada
on May 27,  1996.  At  September  30,  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: pre-paid phone cards, which are
the operations of Telemax  Communications  Inc.;  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.


                                       7.

<PAGE>

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

6.   BANK LOANS

Bank loans comprise the following:
                  Line of credit                     $  152,042
                  Line of credit                         47,513
                  Line of credit                         31,676
                  Line of credit                         13,198
                                                     ----------
                                                     $  244,429
                                                     ==========

The Company's subsidiary company, Telemax Communications Inc., has been provided
with a line of credit  facility  of up to $190,053  with  interest at the bank's
prime plus 1.25%,  secured by a general  security  agreement  over the company's
assets. At September 30, 2001 the company had drawn down $152,042.

The Company's subsidiary company Linkdata Communications London Ontario Inc. has
a line of credit of up to $63,351 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 $47,513 at September 30, 2001.

The Company's subsidiary company Comtel Communications Inc. has a line of credit
of $31,676  with  interest at the bank's  prime rate plus 2.0%,  of which it has
drawn down in full at September  30, 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 $79,187  with  interest at the bank's  prime
plus 2.50%,  secured by a director's  principal  residence up to $53,848,  and a
general security agreement over the company's assets, of which it has drawn down
$13,198 at September 30, 2001.

7.   NOTES PAYABLE AND PROMISSORY NOTE

Notes and promissory notes comprise the following:
                                                  September 30,  September 30,
                                                     2001           2000
                                                     ----           ----

Officers and directors of subsidiary companies    $  945,121     $   13,693
Private notes                                           --            7,270
Balance payable on acquisition of
  Linkdata Communications London Ontario Inc.           --          128,326
Promissory note, private                                --           18,500
Promissory note to AT& T Canada Corp.                637,657           --
                                                  ----------     ----------

                                                  $1,582,778     $  167,789
                                                  ==========     ==========

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
$957,725  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.   DEFERRED REVENUE

The  Company's  subsidiary  company  Telemax  Communications  Inc.,  which sells
prepaid  phonecards,  has estimated the amount of revenue it has collected  that
relates to use of telephone services after September 30, 2001is $120,680.

9.   LONG-TERM DEBT

Long-term debt is summarized as follows:
                                                  September 30,  September 30,
                                                     2001           2000
                                                     ----           ----

Convertible Notes payable to Laurus Master Fund   $  750,000     $     --
Business Development Bank of Canada                  145,216           --
Small Business Loan                                    5,281           --
                                                  ----------     ----------

Total Long-term debt                                 900,497           --
Less: current portion                                 58,065           --
                                                  ----------     ----------

                                                  $  842,432     $     --
                                                  ==========     ==========

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

                                       8.

<PAGE>
<TABLE>
<CAPTION>

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

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.  The Company's subsidiary company,  Telemax Communications Inc.,
has borrowed $158,377 from the Business Development Bank of Canada at the bank's
floating  rate plus 2.0% to  purchase  telephone  equipment  totaling  $309,153.
Principal  repayment  of the loan is  scheduled as one payment of $4,387 on July
31, 2001,  plus 35 monthly  payments of $4,400 plus interest on the  outstanding
balance.  The balance of the purchase  price  $150,775 is being  contributed  by
Telemax   Communications   Inc.  from  its  working   capital.   Also,   Telemax
Communications  Inc. has been  provided a Small  Business Loan by its bankers in
the amount of $158,377,  with  interest at the bank's prime plus 2.5%,  which is
secured by  property  and  equipment.  Telemax  Communications  Inc.  has repaid
$153,096 and the balance  payable at September 30, 2001 is $5,281.  Repayment is
$2,640 monthly plus interest, and the loan matures November 30, 2001.

10.  NOTES PAYABLE TO RELATED PARTIES

Long-term debt,  presented as notes payable to related parties, is summarized as
follows:

                                                  Principal      Discount
                                                  ----------     ---------

Noninterest-bearing notes payable to directors    $   53,617     $  12,160
                                                  ==========     =========

Notes payable to directors are considered long-term, and are noninterest-bearing
with no specific terms for repayment. Discount is based on imputed interest rate
of 10%, and has been recorded as contributed capital.

11.  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 $71,253 for the three-month  period ended September 30, 2001 and $35,383 for
the  three-month  period  ended  September  30,  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     $153,515           $30,271
                  2003     $143,197           $27,933
                  2004     $132,063           $18,823
                  2005     $133,557           $    -
                  2006     $ 33,082           $    -

12.  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 $293,416 for the three-month period ended September 30,
2001 and $238,830 for the three-month period ended September 30, 2000.

The details of goodwill and other intangible assets are as follows:
                                                                   Net              Net
                                             Accumulated      September 30     September 30
                              Cost          Amortization          2001             2000
                         --------------     ------------          ----             ----
<S>                      <C>               <C>              <C>               <C>

         Goodwill        $    5,876,555    $    1,501,422   $    4,375,133    $    4,702,960
                         ==============    ==============   ===============   ==============
</TABLE>



13.  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
September 30, 2001.


14.  FOREIGN ASSETS, REVENUES AND CONSOLIDATED FOREIGN ENTITIES

The Company is presently  Canadian based, and as such carries out its operations
in  Canada.  Symphony  Telecom  International,  Inc.  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.

15.  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. Further, a counterclaim will be issued against the employee. The claim
is scheduled  for  mediation on October 15, 2001.  Management  believes  that no
further liability will be assessed against the Company.



                                       9.

<PAGE>

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


16.  RELATED PARTY TRANSACTIONS

Related party  transactions at September 30, 2001 and 2000 comprised advances by
directors to subsidiary companies as stated in Note 7, and advances by directors
to the parent Company as stated in Note 10. There were no other material related
party transactions.

17.  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 September 30, the
company was still being wound up.

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.

























                                       10.

<PAGE>

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  - FIRST  QUARTER OF FISCAL  YEAR  ENDING  JUNE 30,  2002
COMPARED TO FIRST QUARTER OF FISCAL YEAR ENDED JUNE 30, 2001.

The company's  overall  revenue  performance in fiscal Q1 2002, at $3.6 million,
shows an increase of 83% over the three months  ended  September  30,2001.  This
increase was the result of increased sales in the pre-paid phone card business.

Sales in the Phone Card segment at $3.1million  compare  favourably with figures
reported for the first quarter last year at $671  thousand,  reflect the results
of the Company's  Telemax  Communications  Inc.  subsidiary.  The sales in phone
cards  reported in this quarter of the previous year reflected only sales in the
month of September

Year over year results within the Telephone  Services category  decreased by 85%
in the first three months of this year compared to the respective  previous year
period. This decrease reflects the 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; 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.

For the  voice and data  systems  business  units the  company  is  reporting  a
year-over-year  revenue drop of 23% for the quarter  from $195  thousand to $150
thousand.  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  were  essentially  unchanged  for the  quarter at $44
thousand.

Revenue from  directory  management  activities  was up in the quarter by 1300%,
from $12 thousand to $168 thousand, as this business unit continues its start-up
growth.

The company is reporting an overall gross margin for the first quarter of fiscal
year ending June 30, 2002 of 15%. This compares to a first quarter  FY2001 gross
margin of 29.3%.  The decline in gross profit is  substantially  attributable to
the performance of the pre-paid phone card business.

The company is reporting a 16% gross margin in the pre-paid  phone card business
in the first quarter compared to a 6% margin reported in the previous quarter of
the current year.  However,  sales in this lower-margin  segment of our business
represented  85.6% of total sales in the current quarter  compared to 34% in the
previous quarter.

Within the Telephone Services  operating  segment,  the company achieved a gross
margin of 0.4% in the first quarter of fiscal year ending 2002 compared to 43.8%
in the  comparable  quarter  last year.  The gross margin in this segment of our
business has typically  been in the 40%+ range.  Results in the current  quarter
reflect the impact of a significant decline in this business segment.


                                       11
<PAGE>

Margins on equipment and systems at 22% reflect the result of restructuring  and
downsizing as the company strives to reduce cost. The comparable gross margin in
this business in this quarter of the previous year was 32%.

Gross  Margin  in the  directory  management  category  at 6.4% for the  quarter
reflects  additional  sales costs  associated  with a company in a growth phase:
Directory Management America dot Com.

The  company  took  substantial  steps  to  reduce  its  Selling,   General  and
Administrative  expenses in fiscal 1Q 2002,  however the costs  associated  with
downsizing the organization  were absorbed in the quarter resulting in only a 3%
reduction in this area being apparent.  With the inclusion of  amortization  and
depreciation  total selling and general  expenses,  at $1.2  million,  or 33% of
sales show a substantial  reduction  compared to the corresponding  quarter last
year when total selling and general expenses were $1.5 million or 78% of sales.

Loss from operations at $633 thousand, or 17.6% of sales for the current quarter
compares to a loss of $954  thousand,  or 48.5% of sales for this quarter of the
previous  year.  Operating  losses,  were  primarily a result of  infrastructure
build-up,  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 growth and is
delayed in its current business plan which was projecting  break-even before the
end of the first quarter of fiscal 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 on its cash on hand as of September 30, 2001,  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

Symphony  Telecom  has  strived  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  hinged on the work we were planning using the
expertise  of Nortel  Networks  Professional  Services to  "formalize a business
strategy" that would help us move  aggressively into the North American CLEC and
Applications  Services Provider (ASP) markets.  For now, however, the company is
not a CLEC,  nor does it have any ASP  services.  We have  curtailed our network
development plans  particularly  those related to previously  announced purchase
agreements with Nortel Networks.

We have seen a rapid and increasingly severe downturn in the economy,  which has
affected  growth in demand for our  products and  services.  While we expect the
economic downturn to continue well into the second quarter of 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.


                                       12
<PAGE>

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.


Our focus is on meeting the needs of the  marketplace  and,  through the efforts
and creativity of our account executives and customer engineers,  to present our
customers with the best  communications  solution for their needs. To do this we
are addressing  several  strategic  elements in our  infrastructure  and network
capabilities.   The  company  is  actively  pursuing  various  initiatives  with
Hydro-Electric  Power Utility companies  including joint marketing  initiatives.
The Power Utilities have large customer bases and strong customer loyalty.  Many
have invested  significantly in fibre based  communications  facilities in their
regions and the Company sees great  potential in  co-operative  ventures in this
sector.

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.
On March 21, 2001 an Order was made by the Honourable Madame Justice Swinton, in
the  Ontario  Superior  Court of Justice ( In  Bankruptcy)  in the matter of the
Bankruptcy of Mondetta  Telecommunications  Inc.  declaring that the application
brought pursuant to the Bulk Sales Act, R.S.O. 1990, c.B. 14, commenced by David
Chan, as Applicant against Mondetta Telecommunications Inc. and Symphony Telecom
Inc.,  as  respondents  is stayed by operation of s.69.3 of the  Bankruptcy  and
Insolvency  Act.  R.S.C.  1985,  B-3.  This order was issued on August 2, 2001 .
Accordingly  the previous Order of the Honourable Mr. Justice Matlow of November
29, 2000 prohibiting the transfer of assets or other  consideration  pursuant to
the  September  23, 2000  agreement  between  Symphony  Telecom Inc and Mondetta
Telecommunications Inc. is no longer applicable. Costs were awarded in favour of
Symphony.

Another creditor of Mondetta  Telecommunications  Inc. Frank Alvarez has brought
proceedings  under the Bulk Sales Act,  R.S.O.  1990,  c.B. 14,  against  Comtel
Communications Inc., a wholly owned subsidiary of the Corporation,  as purchaser
in respect  of Comtel  Communication  Inc.'s  acquisition  of certain  assets of
Mondetta  Telecommunications  Inc..  Management believes that the Order of March
21, 2001 by the Honourable  Madame Justice Swinton in the Ontario Superior Court
of  Justice  (in   Bankruptcy)   staying  the  action  of  Chan  against  Comtel
Communications Inc. also applies to Mr. Alvarez by virtue of the doctrine of res
judicta.

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.  The effect of the  settlement  is that the
$1,900,530  worth of Symphony  Telecom Inc.  convertible  to SYPY shares and the
$2,534,040  promissory  note have been returned to Symphony  Telecom and will be
retired in exchange for the Telemax  shares.  Further  benefits were received by
Symphony as part of the settlement,  including a Promissory Note from Telemax to
Symphony in the amount of $82,356  and  further  cash  equivalent  credits  with
Canquest Communications Inc. of $53,848.


                                       13
<PAGE>

On July 3,  2001  Dan  Nelson  issued a claim  against  Symphony  Telecom  Corp.
claiming  unpaid wages and severance pay of $60,817.  The Company's  subsidiary,
Symphony Telecom Inc., hired Mr. Nelson on October 3, 2000 and accordingly it is
expected that the Claim will be dismissed as against  Symphony  Telecom Corp. in
its  entirety.  Furthermore  a  counterclaim  in the amount of $126,702  will be
issued against Mr. Nelson whom the defendants claim was dismissed for cause. The
Plaintiff's  solicitor  has  amended  the claim to include as  defendant  Comtel
Communications Inc. The Plaintiff has also brought a motion to add the Directors
of Comtel  Communications  Inc. as Defendants in this matter.  It is anticipated
that this matter will go to trial.

Comtel  Communications Inc. has received  correspondence  indicating that claims
may be issued  against it as a defendant in various other minor matters  arising
out of the ordinary course of Business.

A Notice of Intent to file a Proposal by the subsidiary Mondetta  Communications
Corp was filed on July 18, 2001. On October 19, 2001 the Official  Receiver from
the Office of the  Superintendent  of Bankruptcy  Canada set November 9, 2001 as
the date of the first meeting of  Creditors.  The  assignment  being deemed as a
result of the failure by the Trustee in Bankruptcy to file a cash flow statement
even  though all the  information  to enable it to do so was  provided  to it by
Mondetta prior to the filing date. A financial  institution of Mondetta's,  as a
secured creditor, filed a Claim of $ 26,607. An unsecured creditor filed a claim
for  $19,005.  The only  other  creditor  to file a claim is the  parent  of the
bankrupt Comtel Communications Inc. for $885,013.  Under these circumstances the
application to set aside the proceedings may not be necessary.

Item 2. Changes in Securities.


On September  24, 2001 the company filed a  registration  statement on form S-8,
which is incorporated by reference.


Item 3. Defaults Upon Senior Securities


None


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 September 30, 2001.


Item 5. Other Information.


Item 6. Exhibits and Reports on Form 8-K


No Reports were filed on form 8-K during the three months  ended  September  30,
2001.

                                   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: December 24, 2001                   /s/ Gilles A. Trahan
                                          --------------------
                                         Gilles A. Trahan, CEO