UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

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

                  For the fiscal year ended September 30, 2001

                        Commission File Number 333-28163

                               CIRUS TELECOM, INC.
             (Exact name of registrant as specified in its charter)

Delaware                                                98-0212763
------------------------------                          -------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)

43-06 Main Street, Flushing, New York                      11355
-------------------------------------             ---------------------
(Address of principal executive offices)                   (Zip Code)

(718) 762-3115
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                  ------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X ] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ X]

The Company's revenues for the year ended September 30, 2001 were $739,065

As of January 15, 2002 the aggregate market value of the voting stock held by
non-affiliates of the registrant was $3,845,551.

As of January 15, 2002, there were 51,820,890 shares of the registrant's
common stock outstanding.


<PAGE>


                                TABLE OF CONTENTS


                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS.

ITEM 2.           DESCRIPTION OF PROPERTY.

ITEM 3.           LEGAL PROCEEDINGS.

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

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

ITEM 7.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.

                                    PART III

ITEM 9.           DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

ITEM 10.          EXECUTIVE COMPENSATION.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


                                     PART IV

ITEM 13.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 10-KSB.


                                       2
<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

General

         Cirus Telecom is a facilities-based domestic and international long
distance telecommunications service provider. Cirus was founded in 2001 to
capitalize on the significant opportunity to provide international long distance
services to prepaid end users and select underserved ethnic communities in major
U.S. metropolitan markets that generate substantial long-distance traffic to
their countries of origin. Cirus is also targeting small and medium sized
communications companies and to leading international long distance carriers.
The Company provides its services through a flexible, high-quality network of
owned and leased transmission facilities, operating and termination agreements
and resale agreements. The Company owns an international gateway switch in New
York, which was put into operation in October 2001, and expects to have other
operational facilities deployed in 2002.

         Cirus' strategic advantage in this sector are the critical
relationships it has been developing with carriers and existing communications
providers in negotiating competitive wholesale pricing on domestic and
international routings. Cirus will deploy the majority of its technology on its
own switching platforms. Cirus' growth strategy is to ensure it has under
contract, the minutes necessary before it purchases highly capital-intensive
telecommunications switching equipment, ensuring that Cirus will be able to
provide highly competitive services among the major population centers in North
America.

         The Cirus target customer is one who has created a niche within the
very lucrative telecommunications sector. Whether that customer is providing
phone cards, or reselling long distance, Cirus will be able to provide complete
turnkey solutions. Cirus will offer its customers the ability to provide
domestic and international voice, data and fax services at substantially lower
prices than those of conventional telephone services, or public switched
telephone networks (PSTNs). The switching network architecture is highly
scaleable, cost effective, requires no additional facilities based real-estate
investment on behalf of a client, and is fully deployable at a rapid pace. The
competitive strength of the Cirus network will be its ability to capture the
small to medium sized communications provider market in the United States via
cost effective technologies and its ability to adapt to changing technologies.


         We plan to introduce several new telecommunications related products
into our growing distribution channels, including prepaid wireless products and
prepaid internet services, and to expand upon our existing business
relationships with the United States telecommunications companies and large
national prepaid card providers we work with. Further, with the expansion of our
"Cirus Talk Multi Service Centers", we will provide sales and access to retail
customers, support for our existing distributors and a mechanism for
establishing new markets for our products.



                                       3
<PAGE>

HISTORY

         Cirus Telecom, Inc. was incorporated in the state of Delaware on August
25, 1997 under the name Sierra Madre Gold Corporation. On October 4, 1999, the
name was changed to Capital One Ventures Corp. On February 9, 2001, the name was
changed to Cirus Telecom, Inc. in connection with the merger discussed below.
Since March 31, 1998, Cirus had been a development stage company seeking a
merger or acquisition of a private entity. DMS Acquisitions Corp. ("DMS") was
incorporated in the state of Delaware on December 11, 2000 to operate as a
wholesale provider of long distance and telecommunication services.

         DMS Acquisitions Corp. subsequently changed it name to "Cirus
Communications, Inc." on July 26, 2001. Cirus also incorporated a wholly owned
subsidiary called Cirus Talk, Inc. on May 23, 2001. This corporation is the
parent for the Cirus Talk multi-service communications centers. CT Huntington
LLC and CT Copiague LLC were formed on May 24, 2001, CT Freeport LLC was formed
on June 18, 2001, CT Miami LLC was formed on August 24, 2001 and CT Little
Havana LLC was formed on August 27, 2001. All are subsidiaries of Cirus Talk,
Inc. These LLCs each hold a lease for an individual retail location in the
appropriate municipality.

MERGER

         Pursuant to an agreement and plan of merger dated February 8, 2001,
Cirus, through a wholly owned subsidiary, acquired all of the issued and
outstanding common stock of DMS in exchange for 10,000,000 shares of Cirus
common stock which represented 65.9% of the outstanding shares of Cirus's common
stock after the issuance. Concurrent with the above acquisition, DMS merged with
and into the wholly owned subsidiary, which then changed its name to DMS and
continues to be wholly owned by Cirus. Cirus and DMS are collectively referred
to as the "Company".

Recent Developments

Cirus "Multi-NET Independent Representative Marketing Program"

         Multi-NET is the marketing arm for the Cirus Retail Telecom Services
Division, through the use of outside sales agents. Cirus' intention is to
develop a grass-roots marketing program whose goal is attracting individuals to
sell voice and data products and services, to ethnic businesses and residential
customers. A marketing kit will be sold for $99, which includes a one-year
enrolment. Agents will earn a minimum of 2% residual commissions on their direct
sales.

         The Multi-NET program will provide exposure within the ethnic
communities allowing Cirus to become a dominant player in business and
residential telecom services.

"Cirus Talk Pro" Call Center Management Software

         On November 27th, 2001 Cirus launched its "Cirus Talk Pro" call center
software management suite. The software will be bundled with Cirus'
long-distance services and sold to owners and operators of calling centers.
Cirus based the platform on its existing calling center operations and utilized
them for its beta test.

                                       4
<PAGE>

         The "Cirus Talk Pro" is call management software that will allow a user
in real-time to ascertain the call distribution on every line of outbound
service. This element is tied to the billing function, which will manage the
rates charged, as well as the wholesale cost of the minutes sold. This enables
the user to verify payables to the carrier. The software can be used to manage
just one location or utilized to over multiple venues. The software provides a
web-based interface and is therefore accessible from any Internet enabled
browser. There is also an inventory control module, which keeps track of the
inventories of phone cards, and other telecom products sold at the stores.

         By providing additional components to its telecom services and thereby
giving customers the ability to manage their financial transactions effectively,
Cirus believes that it will be successful in switching customers over to its
wholesale long-distance products from its competition. There are over 300
calling centers in the New York metropolitan area that Cirus will be actively
pursuing as customers.

                                       5
<PAGE>

Industry Overview

Local Telecommunications Market

         The local telecommunications market is a highly competitive environment
and is dominated by ILECs. Based upon the geographical locations in which we
currently sell services, Verizon and BellSouth are our largest competitors. Most
of our actual and potential competitors, including most of the facilities-first
CLECs, have substantially greater financial, technical, marketing and other
resources (including brand name recognition) than we do. Furthermore, the
continuing trend toward business alliances in the telecommunications industry
and the lack of substantial barriers to entry in the data and Internet services
markets could help to generate substantial new competition. We anticipate that
we will be able to compete based upon our pricing, reliability, customer service
and rapid ability to provision accounts and respond to customer requests. Our
established competitors, such as the ILECs, are able to compete effectively
because they have long-term existing relationships with their customers, strong
name recognition, abundant financial resources, and the ability to cut prices of
certain services by subsidizing such services with revenues generated from other
products. Although the Telecommunications Act reduced barriers to entry into the
local market, future regulatory decisions could provide ILECs with more pricing
flexibility, which would result in increased price competition.

         In addition to competition from ILECs, other CLECs and wireless
entities, several other entities currently offer or are capable of offering
local service, such as long distance carriers, cable television companies,
electric utilities and microwave carriers. These entities, upon entering into
appropriate interconnection agreements or resale agreements with ILECs, can
offer single source local and long distance services like those we offer. For
example, long distance carriers, such as AT&T Corp., MCI WorldCom and Sprint
Corporation, among other carriers, have each begun to offer local
telecommunications services in major U.S. markets using the unbundled network
elements platform or by reselling the ILECs' services.

 Long Distance Telecommunications Market

         The long distance market, in comparison to the local market, has
relatively insignificant barriers to entry and has been populated by numerous
entities that compete for the same customers by frequently offering promotional
incentives and lower rates. We compete with many such companies that do not
offer any service other than long distance, and we compete with established
major carriers such as AT&T and MCI WorldCom. We will also have to maintain high
quality and low cost services to compete effectively. In many instances, we must
be in a position to reduce our rates to remain competitive.

                                       6
<PAGE>

Products and Services

         Cirus Telecom is focusing it's efforts on providing Prepaid products
and services for both ethnic Businesses and Residential customers, which is a
market that is currently being underserved by the major the major carriers like
WorldCom, Qwest, and Verizon. Due to these companies inability to properly
market their products and services to ethnic customers, it affords Cirus with a
competitive advantage which will allow us to dominate the market for Prepaid
ethnic business and consumer market. Cirus Telecom will offer its customers a
suite of bundled Voice and Data Services that are specifically designed for the
Prepaid market.

         In order to properly market Cirus' products and services to ethnic
customers, Cirus has created a wholly owned subsidiary known as "Cirus Talk",
Inc. which will be opening a number of "Internet and Calling Cafe's" which will
function as Multi-Service Communications Centers designed to cater to ethnic
consumers and the credit challenged. Many ethnic customers prefer to operate on
a cash only basis and Cirus Talk is designed to accommodate this market segment.
"Cirus Talk will open Retail stores in the ethnic neighborhoods of select cities
throughout the United States, Puerto Rico and the Dominican Republic. These
Multi-Service Communications Centers will provide "Metered International Long
Distance" calling, Internet access, Money Transmitting and also sell Prepaid
Calling Cards, Prepaid 1 PLUS Service, Prepaid Local Service, Internet, Paging
and Prepaid Wireless services All the products listed will not be available from
the firs
t day of operations but should all be available within six months of
operations.

The initial products and services offered by Cirus and Cirus Talk are:

o        Prepaid International and Domestic 1 PLUS Long Distance
o        Prepaid Dedicated (T-1) International and Domestic Long Distance
o        Prepaid "Dial-Around" Service
o        Prepaid Local Service
o        Prepaid Internet Service
o        Prepaid Cellular/PCS Service
o        Wholesale International VoIP Termination
o        Prepaid Calling Cards
o        Money Wiring Service

Strategy

Competition

         The telecommunications services industry generally, and the prepaid
phone card industry specifically, is intensely competitive, rapidly evolving and
subject to constant technological change. There are several large and numerous
small competitors in the industry, and we expect to face continuing competition
based on price and service offerings from existing competitors and new market
entrants. In addition, the increasing prevalence of the Internet and emerging
technologies seeking to establish Internet telephony pose potential competitive
threats to the market for long distance telephone services. The principal
competitive factors in the market include:

         o        Price;
         o        Quality of service;
         o        Breadth of geographic presence;
         o        Customer service;

                                       7
<PAGE>

         o        Reliability;
         o        Network capacity; and
         o        Availability of enhanced communications services.

         Our competitors include:

         o        Other distributors of prepaid products, such as Union
                  Telecard Alliance and Blackstone Calling Card;
         o        Telecommunications companies that produce their own prepaid
                  products, such as IDT, PT-1 Communications, World Access and
                  Qwest; and
         o        Other telecommunications companies, such as AT&T, Worldcom and
                  Total-Tel USA.

         Many of our competitors have substantially greater financial, technical
and marketing resources, larger customer bases, longer operating histories,
greater name recognition and more established relationships in the industry than
we have. As a result, certain of these competitors may be able to adopt more
aggressive pricing policies, which could hinder our growth.

Government Regulation--Overview

         FCC rulings, precedents or considerations on regulating "Voice over the
Net" services although in the U.S. regulating the Internet, in some way or to
some degree has been a long-standing issue. Until now, the Internet has remained
a truly "Free" mechanism and all attempts to regulate the medium have failed.

         The overall effect that Internet telephony has on the traditional Long
Distance market is that it decreases barriers to entry and increases the level
of competition. The two most significant barriers to entry into the telecom
industry are related to size and regulatory constraints that preclude smaller
companies from gaining significant market share at this particular stage of
market development. Internet telephony, however, effectively eliminates or
reduces these barriers because it is presently unregulated and enjoys economies
of scale by using the Internet as a common voice video and data network. Cirus
has filed for a "214 Telecom Tariff" which allows it to provide a host of
telecom services to its customer base.

United States Domestic Regulations

         In the United States, the Company's provision of services is subject to
the Communications Act of 1934, as amended, and the FCC regulations there under
with respect to interstate and international operations, as well as the
applicable law and regulations of the various states with respect to intrastate
operations. Federal and State Transactional Approvals,. The FCC and certain PSCs
require telecommunications carriers to obtain prior approval for assignment or
transfer of control of licenses, corporate reorganizations, acquisitions of
operations, assignments of assets, carrier stock offerings, and assumption of
significant debt obligations. State requirements vary. Such federal and state
requirements may have the effect of delaying or preventing a change in control
of the Company.

                                       8
<PAGE>

         Federal and State Licenses and Tariffs. The Company is classified as a
non-dominant carrier for domestic services and is not required to obtain
specific prior FCC approval to initiate or expand domestic interstate services.
The Company currently is required by federal law and regulations to file tariffs
listing the rates, terms, and conditions applicable to their interstate
services. The Company has filed domestic long distance tariffs with the FCC. The
FCC has adopted a new policy requiring that non-dominant interstate carriers,
such as the Company, eliminate FCC tariffs for domestic interstate long distance
service. Should pending court appeals concerning this new policy fail and the
FCC's order become effective, the Company may benefit from the elimination of
FCC tariffs by gaining more flexibility and speed in dealing with marketplace
changes. The absence of tariffs, however, will also require that the Company
secure agreements with its customers regarding its existing tariffs or face
potential claims arising because the rights of the parties are no longer clearly
defined. To the extent that the Company's customer base involves "casual
calling" customers, the absence of tariffs would require the Company to limit
potential liability by contractual means. On August 20, 1997, the FCC partially
reconsidered its order by allowing dial-around carriers such as the Company to
maintain tariffs on file with the FCC.

         The Company also currently is seeking the certifications required to
provide service in the 50 states. Although the Company intends and expects to
obtain operating authority in each jurisdiction in which operating authority is
required, there can be no assurance that the Company will succeed. To the extent
that any incidental intrastate service is provided in any state where the
Company has not yet obtained any required certification, the applicable state
commission may impose penalties for any such unauthorized provision of service.
The Company monitors regulatory developments in all 50 states to ensure
regulatory compliance.

Interexchange Competition Under The 1996 Telecommunications Act ("1996 Act")

         Under the 1996 Act, RBOCs are permitted to provide out-of-region long
distance (or inter-LATA) services upon receipt of standard state and/or federal
regulator approvals for long distance service. The GTE Operating Companies
("GTOCs") also are permitted to enter the long distance market without regard to
limitations by region. An RBOC may provide in-region long distance services,
however, only after satisfying a 14-point "checklist" for nondiscriminatory
competitive access to its local network. The grant of long distance authority
could permit RBOCs and GTOCs to compete with the Company in the provision of
domestic and international long distance services. To date, the FCC has denied
several applications for in-region long distance authority filed by RBOCS. These
denials remain in effect pending further appeals to the U.S. Court of Appeals
for the D.C. Circuit. In addition, the U.S. Court of Appeals for the 5th Circuit
is hearing an appeal of a Texas Federal District Court Order finding
unconstitutional certain provisions of the 1996 Act concerning the 14-point
checklist. The District Court Order has been stayed pending the 5th Circuit
Appeal. If the District Court's decision ultimately is permitted to stand by the
5th Circuit or the FCC denials are reversed by the DC Circuit, it may result in
RBOCs providing interexchange service in their operating regions sooner than
previously expected.

                                       9
<PAGE>

         Two RBOCs have recently proposed partnerships or agreements with long
distance service providers that would allow the RBOCs to provide, indirectly,
in-region long distance services. Both of the proposals have been challenged,
one before the FCC and the other in a U.S. district court, on the basis, among
other things, that these RBOCs cannot enter into such partnerships or agreements
until they have satisfied the 14-point checklist. If the partnerships or
agreements are allowed to stand, it may result in RBOCs being allowed to provide
interexchange service in their operating regions sooner than previously
expected. The Company cannot predict the outcome of these proceedings or their
possible impact on the Company.

         The 1996 Act also addresses a wide range of other telecommunications
issues that could impact the Company's operations, including, for example,
access charges and universal service. As required by the legislation, the FCC
and the PSCs have initiated a number of proceedings to adopt regulations to
implement the 1996 Act. Many of these regulations have been, and others likely
will be, judicially challenged. It is not possible to assess what impact the
1996 Act, the rulemakings, or related litigation will have on the Company's
business, financial conditions and results of operations.

Access Charges

         To originate and terminate calls, long distance carriers such as the
Company must purchase "access services" from LECs or CLECS. Access charges
represent a significant portion of the Company's costs of United States domestic
long distance services. The FCC regulates interstate access charges. Under
alternative rate structures being considered by the FCC, LECs would be permitted
to allow volume discounts in the pricing of access charges. PSCs regulate
intrastate access charges. The RBOCs and other local exchange carriers also have
been seeking greater pricing flexibility and reduction of intrastate access
charges. While the outcome of these proceedings is uncertain, if LECs are
permitted to utilize more flexible rate structures for access charges, smaller
long distance carriers such as the Company, could be placed at a significant
cost disadvantage with respect to larger competitors.

Casual Calling Issues

         The FCC has ordered all telecommunications companies to migrate from
their existing five-digit CIC codes (10+XXX) to seven-digit codes (10+10+XXX) as
of July 1, 1998. Petitions for Reconsideration of the July 1, 1998 deadline are
currently pending before the FCC. Once the FCC's order becomes effective, there
will be more codes available for casual calling services, which would allow for
increased competition in the casual calling industry.

DEREGULATION AND PRIVATIZATION OF TELECOMMUNICATIONS MARKETS WORLDWIDE

         Significant legislation and agreements have been adopted since the
beginning of 1996 that are expected to lead to increased liberalization of the
majority of the world's telecommunication markets. The U.S. Telecommunications
Act, signed in February 1996, which establishes parameters for the

                                       10
<PAGE>

implementation of full competition in the U.S. domestic local and long distance
markets; the European Union's Services Directive, adopted in 1990, which
abolishes exclusive rights for the provision of voice telephony services
throughout the European Union and the public switched telephone networks of any
member country of the European Union by January 1, 1998, subject to extension by
certain European Union member countries; and the WTO Agreement, signed in
February 1997, which creates a framework under which 69 countries have committed
to liberalize their telecommunications laws in order to permit increased
competition and, in most cases, foreign ownership in their telecommunications
markets, beginning in 1998. The Company believes that these initiatives, as well
as other proposed legislation and agreements, will provide increased
opportunities for emerging competitive carriers such as Cirus to provide
telecommunications services in targeted markets.

         Deregulation has encouraged competition, which in turn has prompted
carriers to offer a wider selection of services and reduce prices. The
industry's projections for substantially increased international minutes of use
and revenue over both the near term and long term are based in part on the
belief that reduced pricing as a result of deregulation and competition will
result in a substantial increase in the demand for telecommunications services
in most markets.

U.S. International Authorizations

         International common carriers, such as the Company, are required to
obtain authority from the FCC under Section 214 of the Communications Act to
provide international telecommunications services that originate or terminate in
the U.S., and to file and maintain tariffs with the FCC specifying the rates,
terms, and conditions of their services. In 1989, the Company received Section
214 authority from the FCC to acquire and operate satellite facilities for the
provision of direct international service to Italy, Kenya, India, Iran, Saudi
Arabia, Pakistan, Sri Lanka, South Korea and the United Arab Emirates. At the
same time, the Company also was authorized to resell services of other common
carriers for the provision of switched voice, telex, facsimile and other data
services, and for the provision of INTELSAT Business Services and international
television services to various overseas points. On August 27, 1997, the Company
was granted global facilities-based Section 214 authorization under streamlined
processing rules adopted in 1996 to provide international basic switched,
private line, data, television and business services using authorized facilities
to virtually all countries in the world.

         The FCC's streamlined Section 214 authorizations and tariff regulation
processes provide for shorter tariff notice and review periods for certain U.S.
international carriers, including the Company, as well as for other streamlined
regulatory requirements for "non-dominant" carriers found to lack market power
on the routes served. The Company is classified by the FCC as a non-dominant
international and domestic carrier.

         The provision of telecommunications services is regulated by the
federal and state governments of the United States. Federal laws and regulations
promulgated by the Federal Communications Commission apply to interstate and
international telecommunications, while state regulatory authorities have
jurisdiction over telecommunications services that originate and terminate
within the same state. Various other international authorities also may seek to
regulate telecommunications services originating in their respective countries.
However, as of the date of this report, we are not aware of any requirement for
government approval to manufacture, distribute and/or market prepaid phone
cards.


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<PAGE>

Employees

         As of September 30, 2001, we had 5 full-time employees. Of these, 2
were technical support, 2 were management and finance personnel and 1was general
and administrative personnel. None of our personnel are covered by a collective
bargaining agreement. We have never experienced an employment-related work
stoppage and consider our employee relations to be satisfactory.


ITEM 2. DESCRIPTION OF PROPERTY.


         Our executive offices are located at 43-06 Main St. Flushing, NY, where
we lease approximately 1,300 square feet, pursuant to a sublease agreement that
expires on August 31, 2002. The aggregate annual base rental for this space is
$16,280. We sublet these premises from an officer and director of ours, on terms
substantially the same as those under which the officer leases the space.

         We also lease approximately 1,400 square feet, located at 1761 New York
Ave, Huntington Station, New York, 11746 as a call center. The lease agreement
expires on 05/31/06. The aggregate annual base rental for such space is $27,000.

         In addition, we lease approximately 1200 square feet, located at 1635
Great Neck Road, Copiague, New York, 11726 as a call center, pursuant to a lease
agreement that expires on, 05/31/2004. The aggregate annual base rental for this
space is $20,400.

         We also lease approximately 1,500 square feet, located at 47W Sunrise
Highway, Freeport, New York, 11520 as a call center, pursuant to a lease
agreement that expires on 06/30/2006. The aggregate annual base rental for this
space is $18,000.

         In addition, we lease approximately 1,200 square feet, located at 106
NE 3rd Ave, Miami, Florida, 33132, as a call center, pursuant to a lease
agreement that expires on, 09/01/2006. The aggregate annual base rent for this
space is $29,394.

         Lastly, we also lease approximately 1,800 square feet, located at 521NW
12th Ave, Miami, Florida, 33136, as a call center, pursuant to a lease agreement
that expires on, 01/09/2006. The aggregate annual base rental for this space is
$30,672.

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<PAGE>

ITEM 3. LEGAL PROCEEDINGS.

         There are no legal proceedings that Cirus Telecom, Inc. or any of its
subsidiaries are involved in.


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


         As of September 30, 2001 there were no matters for the security holders
of Cirus to vote on.

                                       13
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information

         Our common stock is quoted on the over-the-counter bulletin board
("OTCBB") under the symbol "CTLE", since February 10, 2001. Prior to this,
beginning in June 2000 the common stock was traded under the symbol "CVCX." The
following table sets forth the range of the high and low quotations for our
common stock for the periods indicated. Such market quotations reflect
inter-dealer prices, without mark-up, mark-down or commission and may not
necessarily represent actual transactions.

                                            High                 Low
                                            ----                 ---
       2001

        Second quarter                      2.43                 1.21
        Third quarter                       2.00                 0.75
        Fourth quarter                      1.47                 0.60



         As of September 30, 2001, there were approximately 350 holders of
record of our common stock and the closing bid quotation of our common stock on
the OTCBB was $1.06 per share.


Dividend Policy

         At the present time, Cirus has not implemented a dividend plan for the
company.


Recent Sales of Unregistered Securities

         The company has not had any recent sales of unregistered securities. As
except as set forth in the Liquidity section of Management's Discussion and
Analysis.


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<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with the consolidated
financial statements and notes thereto set forth in Item 7 of this Annual
Report. This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements are statements other than historical information or statements of
current condition. Some forward-looking statements may be identified by the use
of such terms as "believes," "anticipates," "intends," or "expects." These
forward-looking statements relate to our plans, objectives and expectations for
future operations and growth. Other forward-looking statements in this Annual
Report on Form 10-KSB include statements regarding synergies and growth expected
as a result of our in-progress and future acquisitions, expected growth in
earnings, revenue and gross margin, our expectation regarding our ability to
consummate future acquisitions and the necessity for and expected availability
of additional financing. In light of the risks and uncertainties inherent in all
such projected operational matters, the inclusion of forward-looking statements
in this report should not be regarded as a representation by us or any other
person that our objectives or plans will be achieved or that any of our
operating expectations will be realized. Our revenues and results of operations
are difficult to forecast and could differ materially from those projected in
the forward-looking statements contained in this report as a result of certain
risks and uncertainties including, but not limited to, our ability to integrate
and manage acquired companies, assets and personnel, changes in market
conditions, the volatile and competitive environment for Internet telephony, the
availability of transmission facilities, management of our rapid growth, entry
into new and developing markets, competition, the international
telecommunications industry, dependence on operating agreements with foreign
partners, reliance on third parties to provide us with technology,
infrastructure and content, significant foreign and U.S.-based customers and
suppliers, availability of transmission facilities, U.S. and foreign
regulations, international economic and political instability, dependence on
effective billing and information systems, customer concentration and attrition,
rapid technological change, and the expansion of the global network. These
factors should not be considered exhaustive; we undertake no obligation to
release publicly the results of any future revisions we may make to
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.


                                       15
<PAGE>

OVERVIEW

         Cirus Telecom, Inc. ("Cirus") is a full-service telecommunications
company that focuses on developing integrated telephone service in the emerging
competitive carrier industry. We offer an integrated set of telecommunications
products and services, including local exchange, local access, domestic and
international long distance telephone, calling cards, dedicated access, and
other enhanced and value-added telecommunications services tailored to meet the
needs of our customers and the growing marketplace demand from small and
medium-sized businesses for reliability and speed.

         In the third quarter Cirus Telecom, Inc. added its "Cirus Talk"
multi-service telecom center subsidiary. This division will own and operate a
retail chain of "Internet and Calling Cafes" catered to ethnic customers. These
centers will allow the distribution of telecom products to the underserved
retail niche that Cirus has identified in the telecom marketplace. Services and
products include prepaid phonecards, prepaid wireless products, prepaid home
services and direct international dialing.

HISTORY

         Cirus Telecom, Inc. was incorporated in the state of Delaware on August
25, 1997 under the name Sierra Madre Gold Corporation. On October 4, 1999, the
name was changed to Capital One Ventures Corp. On February 9, 2001, the name was
changed to Cirus Telecom, Inc. in connection with the merger discussed below.
Since March 31, 1998, Cirus had been a development stage company seeking a
merger or acquisition of a private entity. DMS Acquisitions Corp. ("DMS") was
incorporated in the state of Delaware on December 11, 2000 to operate as a
wholesale provider of long distance and telecommunication services.

         DMS Acquisitions Corp. subsequently changed it name to "Cirus
Communications, Inc." on July 26, 2001. Cirus also incorporated a wholly owned
subsidiary called Cirus Talk, Inc. on May 23, 2001. This corporation is the
parent for the Cirus Talk multi-service communications centers. CT Huntington
LLC and CT Copiague LLC were formed on May 24, 2001, CT Freeport LLC was formed
on June 18, 2001, CT Miami LLC was formed on August 24, 2001 and CT Little
Havana LLC was formed on August 27, 2001. All are subsidiaries of Cirus Talk,
Inc. These LLCs each hold a lease for an individual retail location in the
appropriate municipality.

MERGER

         Pursuant to an agreement and plan of merger dated February 8, 2001,
Cirus, through a wholly owned subsidiary, acquired all of the issued and
outstanding common stock of DMS in exchange for 10,000,000 shares of Cirus
common stock which represented 65.9% of the outstanding shares of Cirus's common
stock after the issuance. Concurrent with the above acquisition, DMS merged with
and into the wholly owned subsidiary, which then changed its name to DMS and
continues to be wholly owned by Cirus. Cirus and DMS are collectively referred
to as the "Company".

                                       16
<PAGE>

         We offer long distance services to customers through agreements we have
with several international long distance carriers. The long distance services
include domestic service, such as interLATA, which are calls that pass from one
"Local Access and Transport Area" or "LATA" to another LATA, and intraLATA,
which are calls that stay within the LATA in which they originated, but are
beyond the distance limits of the local calling plan. Our services also include
international calling, toll-free services (800, 888, 877, 866), calling card,
and other enhanced services. We offer individual customers consultation services
with regard to the design and implementation of complete telecommunications
systems to meet their specific needs, including the selection of equipment,
interconnection of local area networks and wide area networks, and
implementation of virtual private networks.

         The nature of our telecommunications business is rapidly evolving but
has a limited operating history. The Company began operations in the second
quarter of the year 2001 and as such; we believe period-to-period comparisons of
operations are not meaningful and should not be relied upon as indicators of
future performance. We also believe our historical growth rates are not
indicative of future growth rates.

         We continue to deploy our telecom-switching network, expand our
customer base and we are beginning to penetrate the business segment. We
anticipate future growth from providing a comprehensive product suite of
communications services. These services are expected to include wholesale
telecom sales, international long-distance services, domestic call termination,
phone-card PIN activation and debit-card billing software deployment.

         There is a great demand in the United States for telecom carriers to
provide a host of services at competitive prices. Due to the deregulation of the
telecom industry, any corporation with the appropriate state and federal
licenses may provide any number of those services. As the incumbent Baby Bell's
navigate the telecom waters, we believe they may be hampered by their size and
legislative limitations as to what they can and are able to do. This creates
opportunities for smaller and more nimble organizations to react to changing
technologies and market demands.

         Cirus' service offering allows us to lease from the incumbent local
exchange carriers ("ILECs"), on an as-needed basis, multiple unbundled network
elements and combine them into our own full service platform. We lease a
combination of network elements, including the local loop, a network interface
device, where the local loop terminates at the customer's premises, a switch
port that connects the local loop to the ILEC's switch, the switching
functionality of the ILEC's switch, and the transport of telephone calls between
ILEC switches for local calls, or to a long distance telephone company's
point-of-presence for a long distance call. We have chosen this platform to grow
our customer base because it allows us to rapidly enter new markets with minimal
capital expenditures. For example, we can build a customer base without
deploying either a local switch in every location that we decide to grow into,
or create the last-mile infrastructure. Generally, instead of buying and
maintaining our own equipment in the field, we utilize the reliable equipment
owned by the ILECs and focus our resources on building a customer base. Cirus
believes in creating a centralized switching facility with interconnections and
gateways at the partner's facility.


                                       17
<PAGE>

         In March of 2001 Cirus purchased a switch from NACT Telecommunications,
Inc. a leading telecom hardware producer. This switch was operational in October
2001. This increased the telecom capacity of Cirus by 20,000,000 minutes per
month. Cirus intends to utilize this switch to run prepaid phonecard programs
for various distributors of such cards, wholesaling long-distance minutes and
providing call-termination into the United States.

         The margins on switched telecom products vary on several factors, but
most importantly the relationships with direct providers both domestically and
internationally. Cirus deals with both the incumbent PTTs and Secondary Network
Operators (SNOs) in international locations. The logic behind choosing a
provider is based upon costs and service reliability. As the NACT switch is
operational, Cirus is endeavoring to place direct lines into as many
international locations as possible, thereby creating the most direct route to
the country in question.

         Building and expanding our business has required and will continue to
require us to make significant expenditures in excess of the amounts of cash
that our business is generating. We believe our strategy of leasing excess
capacity on existing circuit-switched networks and building our own
packet-switched network will help our operations to generate positive cash flow
much sooner than the strategy used by CLECs of building a circuit-switched
network before a customer base has been established. We have experienced
operating losses and generated negative cash flow since we began operating and
we expect to continue to generate negative cash flow for a period of time while
we continue to expand our network and develop product offerings and our customer
base. We cannot assure you that our revenue or customer base will increase or
that we will be able to achieve or sustain positive cash flow.

      Our plan for the growth of our telecommunications division includes an
aggressive strategy to obtain as many new local and international access lines
as our cash resources allow. We will need to expend cash and incur additional
losses before we are able to grow our telecommunications business to a
profitable level. We believe our cash will provide us with sufficient liquidity
to grow our business and carry out many of our expansion plans. We may seek
additional financing, however, there can be no assurance that we will be able to
obtain such funding when needed, or that such funding, if available, will be
obtainable on terms acceptable to us.

Cirus Talk Multi-Service Communications Centers

         Cirus added its "Cirus Talk" multi-service telecom center subsidiary in
May of 2001. This division owns and operates a retail chain of "Internet and
Calling Cafes" catered to ethnic customers. These centers will allow the
distribution of telecom products to the underserved retail niche that Cirus has
identified in the telecom marketplace. Services and products include phone
cards, prepaid wireless products, prepaid home services and direct international
dialing.

         Within each center there are a series of phone booths where individuals
may make calls to any global destination, via the Cirus switching platform.
Cirus estimates that on a 20-booth configuration it will run approximately
175,000 minutes per location. On average the minute charges range from 20 cents
to 35 cents, depending on the country. As Cirus manages its own calls, the gross
margins are expected to be 25-50% higher than competitors who do not have their
own facilities to route their call traffic.

                                       18
<PAGE>

         Cirus completed its first five locations in Miami and Little Havana,
Florida and Huntington, Freeport and Copiague, New York. The primary demographic
focus for these locations is for calling services to Central and South American
destinations. Cirus has negotiated with its international carriers and will be
able to offer its customers highly competitive rates to several select
countries. Cirus intends on expanding these retail locations throughout the New
York, New Jersey, Connecticut, Florida and Rhode Island markets.

Competition in the Telecommunications Industry

Local Telecommunications Market

         The local telecommunications market is a highly competitive environment
and is dominated by ILECs. Based upon the geographical locations in which we
currently sell services, Verizon and BellSouth are our largest competitors. Most
of our actual and potential competitors, including most of the facilities-first
CLECs, have substantially greater financial, technical, marketing and other
resources (including brand name recognition) than we do. Furthermore, the
continuing trend toward business alliances in the telecommunications industry
and the lack of substantial barriers to entry in the data and Internet services
markets could help to generate substantial new competition. We anticipate that
we will be able to compete based upon our pricing, reliability, customer service
and rapid ability to provision accounts and respond to customer requests. Our
established competitors, such as the ILECs, are able to compete effectively
because they have long-term existing relationships with their customers, strong
name recognition, abundant financial resources, and the ability to cut prices of
certain services by subsidizing such services with revenues generated from other
products. Although the Telecommunications Act reduced barriers to entry into the
local market, future regulatory decisions could provide ILECs with more pricing
flexibility, which would result in increased price competition.

         In addition to competition from ILECs, other CLECs and wireless
entities, several other entities currently offer or are capable of offering
local service, such as long distance carriers, cable television companies,
electric utilities and microwave carriers. These entities, upon entering into
appropriate interconnection agreements or resale agreements with ILECs, can
offer single source local and long distance services like those we offer. For
example, long distance carriers, such as AT&T Corp., MCI WorldCom and Sprint
Corporation, among other carriers, have each begun to offer local
telecommunications services in major U.S. markets using the unbundled network
elements platform or by reselling the ILECs' services.

 Long Distance Telecommunications Market

         The long distance market, in comparison to the local market, has
relatively insignificant barriers to entry and has been populated by numerous
entities that compete for the same customers by frequently offering promotional
incentives and lower rates. We compete with many such companies that do not
offer any service other than long distance, and we compete with established
major carriers such as AT&T and MCI WorldCom. We will also have to maintain high
quality and low cost services to compete effectively. In many instances, we must
be in a position to reduce our rates to remain competitive.

                                       19
<PAGE>

Government Regulation

         Local and long distance telecommunications services are subject to
regulation by the Federal Communications Commission ("FCC") and by state
regulatory authorities. Among other things, these regulatory authorities impose
regulations governing the rates, terms and conditions for interstate and
intrastate telecommunications services and require us to file tariffs for
interstate and international service with the FCC and obtain approval for
intrastate service provided in the states in which we currently market our
services. We must obtain and maintain certificates of public convenience and
necessity from regulatory authorities in the states in which we operate. We are
also required to file and obtain prior regulatory approval for tariffs and
intrastate services. In addition, we must update or amend the tariffs and, in
some cases, the certificates of public convenience and necessity, when rates are
adjusted or new products are added to the local and long distance services we
offer. Changes in existing laws and regulations, particularly regulations
resulting in increased price competition, may have a significant impact on our
business activities and on our future operating results. We are also subject to
Federal Trade Commission regulation and other federal and state laws relating to
the promotion, advertising and direct marketing of our products and services.

         Certain marketing practices, including the means to convert a
customer's local or long distance telephone service from one carrier to another,
have recently been subject to increased regulatory review of both federal and
state authorities. Even though we have implemented procedures to comply with
applicable regulations, increased regulatory scrutiny could adversely affect the
transitioning of customers and the acquisition of new customer bases. Amendments
to existing statutes and regulations, adoption of new statutes and regulations
and expansion of our operations into new geographic areas and new services could
require us to alter our methods of operation or obtain additional approvals, at
costs which could be substantial. There can be no assurance that we will be able
to comply with applicable laws, regulations and licensing requirements. Failure
to comply with applicable laws, regulations and licensing requirements could
result in civil penalties, including substantial fines, as well as possible
criminal sanctions.

Gross Profit

         Cirus generated no revenues in the three-month and cumulative period
preceding the quarter ended June 30, 2001. Cirus used the time and resources
from February 2001 to install and build its network. Cirus generated revenues in
the third quarter through the sale of third party phonecards to its existing
customer base.

         As of September 30, 2001 the end of our fourth quarter, Cirus generated
$ 739,065 in sales. Of this figure $417,159 was generated through 9278
Communications, Inc., a related party prior to September 29, 2001. The Company

                                       20
<PAGE>

generated $321,906 of sales of phones cards to various other customers including
THC Internet Solutions, Inc. as part of a services contract with Cirus. The
gross profit generated from these operating activities was $147,218 for the
period December 11, 2000 (date of inception) to September 30, 2001.

General and Administrative

         General and administrative expenses for the period from inception to
September 30, 2001 were $961,080. The general and administrative expenses were
primarily due to the Company incurring costs associated with marketing and
investor relations, consulting, officers' salaries, professional fees and
travel. Included in general and administrative expenses are $389,086 of investor
relations costs of which $374,959 resulted from the Company issuing 476,000
shares of common stock to consultants to perform their services. The Company
incurred $105,429 in professional fees, which includes legal and accounting fees
in connection with the merger. Officers' salaries amounted to $140,250 payable
to the officers under the employment agreement. Other office salaries amounted
to $29,375. Other general and administrative expenses amounted to $296,940.

         We anticipate the amount of general and administrative expenses to rise
over the next two quarters as Cirus anticipates the addition of further
technical, support and managerial staff. Cirus estimates that it will have to
double its staffing requirements to meet the upcoming demands. As the number of
staff increases, Cirus will have to relocate to larger office premises, causing
the monthly rental expense to increase by an estimated 100%.

Depreciation and Amortization

         For the period December 11, 2000 (date of inception) to September 30,
2001 certain computer and office furniture and equipment were put into
operation, therefore, the Company incurred a depreciation expense of $5,042 on
equipment.

         On July 13, 2001, the Company purchased certain assets from a
distributor in an asset purchase transaction, wherein the Company acquired the
lease and leaseholds of two call centers run by the distributor. The Company
paid $100,000 for each the leases. The lease acquisition costs are being
amortized over the five-year life of the leases. The amortization expense on
these leases amounted to $5,000 through September 30, 2001.

Interest Income

         Interest income of $5,914 was derived from cash deposits at Cirus'
banking institutions.

Net Loss

         The Company had a cumulative net loss of $822,597 from inception to
September 30, 2001. In addition the Company reported a net loss attributable to
common stockholders of $1,152,597 for the period ended September 30, 2001. This
amount equates to -$0.02 per share. Within this net loss figure, there is a
non-cash dividend attributed to the convertible preferred stock issued of
$330,000 for the period ended September 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash balances vary significantly from day-to-day due to
the volume of purchases, sales and deposits required in the telecom industry.
Due to the nature of the telecom industry and the financial risk and exposure of
the Company, all customers are required to prepay for services based upon their
carrier requirements. If the Company establishes credit terms with customers, it
is done on an individual basis, based upon payment history and the duration of
the customer relationship.

     The Company is currently planning to raise additional capital. Further, the
Company has not generated sufficient cash flow to fund its operations and
activities. The Company has relied funds from the sale of preferred shares of
stock. Management is optimistic that the Company will be successful in its
capital raising efforts; however, there can be no assurance that the Company
will be successful in raising additional capital.

     As of September 30, 2001, the Company's current assets were $ 85,348, which
included $27,684 in accounts receivables and $57,573 in prepaid expenses and
other current assets. Its current liabilities were $383,930, with accounts
payable and accrued expenses of $ 169,085 mainly due to vendors, current portion
of balance due on equipment loan and capital lease of $144,845 and short-term
working capital loans of $70,000.

     For the cumulative period December 11, 2000 through September 30, 2001, the
net cash used for operating activities was $369,030. Operating activities uses
were primarily due to a net loss of $822,597, an increase in accounts receivable
of $27,684 and prepaid expenses and other current assets of $57,573, offset by
an increase in accounts payable and accrued expenses of $169,085.

       The Company used cash in investing activities of $564,817 for the period
December 11, 2000 through September 30, 2001 which were primarily due to
purchases of property and equipment, acquisition of call centers and merger
expenses.

     The Company increased its net cash from financing activities for the period
December 11, 2000 through September 30, 2001 by $933,939. The major component
primarily consisted of proceeds from issuance of convertible Preferred Stocks of
$990,000 and $70,000 of short-term financing received from other parties.

         In the first quarter of fiscal year 2002, the Company has raised
$395,000 of additional capital investments through the sale of Preferred stock.

         The Company will not be able to substantially expand its switching
facility to increase the capacity without additional capital being raised for
the company, or preferential leasing terms are negotiated with hardware and
software suppliers. At that point, it is projected that the Company will be able
to grow its network through its internal cash flow. Cirus estimates that it will
have to triple the size of its switching facilities to meet the customer demand
for its telecom services. These new switches will be designed to work in tandem
with Cirus' existing NACT platform.


                                       21
<PAGE>

EQUITY AND DEBT FINANCING

Preferred Stock

         On February 6, 2001 the Board of Directors of the Company adopted and
created a series of preferred stock consisting of 1,000 shares designated as the
Series A Convertible Preferred Stock ("Preferred Stock"). Each share of
Preferred Stock has a liquidation preference of $1,000. The Preferred Stock is
convertible into common stock at any time after the 30th calendar day the
Company receives payment in full. The conversion rate is equal to $1,000 per
share of preferred stock divided by 75% of the average market price of the
common stock for ten days prior to the date of conversion. The conversion rate
is subject to adjustment under certain circumstances. Outstanding Preferred
Stock may be repurchased by the Company from holders of shares of Preferred
Stock by: (i) delivering notice in writing thereof to such holders prior to the
date which is one year following the date on which the Company received payment
in full for the Preferred Stock and issued the Preferred Stock to a particular
holder of Preferred Stock (the "Issuance Date"); and (ii) by the payment to such
holders of the sum of $1,250 per share of Preferred Stock so repurchased within
three (3) business days of such notice by way of wire transfer, certified check
or bank draft.

         The Company may not repurchase any shares of Preferred Stock for which
it has received a Conversion Notice. As a condition to the closing of the above
agreement and plan of merger with Comm, Cirus sold 850 shares of the Preferred
Stock for total proceeds of $850,000 to three entities. Subsequently and through
September 30, 2001, the Company has sold an additional 140 shares of Preferred
Stocks for total proceeds of $140,000. Each entity holding such shares shall
only be allowed to convert preferred shares into common stock up to a maximum of
9.9% of the outstanding shares of common stock following the conversion. The
calculation includes common stock beneficially owned by the entity and its
affiliates. On October 2, 2001, the Company issued additional10 shares of its
Series A Convertible Preferred stock and received $10,000.

         On October 2, 2001 the Board of Directors of the Company adopted and
created a series of preferred stock consisting of 1,000 shares designated as the
Series B Convertible Preferred Stock ("Preferred B"). Each share of Preferred
Stock has a liquidation preference of $1,000. The Preferred Stock is convertible
into common stock at any time after the 30th calendar day the Company receives
payment in full. The conversion rate is equal to $1,000 per share of preferred
stock divided by 75% of the average market price of the common stock for ten
days prior to the date of conversion. The conversion rate is subject to
adjustment under certain circumstances. Outstanding Preferred Stock may be
repurchased by the Company from holders of shares of Preferred Stock by: (i)
delivering notice in writing thereof to such holders prior to the date which is
one year following the date on which the Company received payment in full for
the Preferred Stock and issued the Preferred Stock to a particular holder of
Preferred Stock (the "Issuance Date"); and (ii) by the payment to such holders
of the sum of $1,250 per share of Preferred Stock so repurchased within three
(3) business days of such notice by way of wire transfer, certified check or
bank draft. The Company has agreed to allow the preferred shareholders
"Piggy-back Registration Rights" for the shares converted to common stock. This
allows the shareholder the right to "Piggy-back" on any registration offering by
the Company without cost to them. Between October 1, 2001 and January 14, 2002,
385 Preferred Shares were issued by the Company and the Company received
$385,000.


                                       22
<PAGE>

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      ------------------------------------
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

                              FINANCIAL STATEMENTS

                      DECEMBER 11, 2000 (DATE OF INCEPTION)
                              TO SEPTEMBER 30, 2001


                                       23
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      ------------------------------------
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

                              FINANCIAL STATEMENTS

                      DECEMBER 11, 2000 (DATE OF INCEPTION)
                              TO SEPTEMBER 30, 2001



                                TABLE OF CONTENTS


                                                                          PAGE

Independent Auditors' Report                                               25

Consolidated balance sheet as at September 30, 2001                        26

Consolidated statement of operations for the period December 11, 2000
   (date of inception) to September 30, 2001                               27

Consolidated statement of cash flows for the period
  December 11, 2000 (date of inception) to September 30, 2001              28

Consolidated statement of stockholders' equity for the period
   December 11, 2000 (date of inception) to September 30, 2001             29

Notes to Consolidated Financial Statements                                 31






                                      24
<PAGE>



                         F R E E M A N  &  D A V I S L L P
               C e r t i f i e d  P u b l i c  A c c o u n t a n t s

Harold N. London, CPA
Robert H. Feldstein, CPA                         225 West 34th Street, Suite 320
Stuart H. Levitt, CPA                                 New York, N.Y.  10122-0397
Gerald Lubowsky, CPA
                                                --------------------------------
Arthur Schwartzman, CPA
Mark Feldstein, CPA                                      Telephone: 212-594-8155
                                                        Telecopier: 212-465-0520
-----------------------------------------

Philip J. London

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To The Board of Directors and Stockholders of
Cirus Telecom, Inc.:

       We have audited the accompanying consolidated balance sheet of Cirus
Telecom, Inc. and subsidiaries as at September 30, 2001, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the period December 11, 2000 (inception) to September 30, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

       We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

       In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Cirus Telecom, Inc. and subsidiaries as of September 30, 2001, and the results
of their operations and their cash flows for the period December 11, 2000
(inception) to September 30, 2001 in conformity with accounting principles
generally accepted in the United States of America.

       The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred substantial losses from
operations and has a deficiency in working capital at September 30, 2001, which
raise substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.

FREEMAN & DAVIS LLP

New York, New York
January 4, 2002




                                       25
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                           CONSOLIDATED BALANCE SHEET
                            AS AT SEPTEMBER 30, 2001
<TABLE>
<CAPTION>


                                     ASSETS
                                     ------

<S>                                                                           <C>
Current Assets:
      Cash                                                                    $        91
      Accounts receivable                                                          27,684
      Prepaid expenses and other current assets                                    57,573
                                                                              -----------
         Total Current Assets                                                      85,348
                                                                              -----------

Plant and Equipment - net                                                         544,233
                                                                              -----------

Other Assets:
      Lease acquisition costs, net of accumulated
        amortization of $5,000                                                    195,000
      Security deposits                                                            15,262
                                                                              -----------
         Toal Other Assets                                                        210,262
                                                                              -----------
                                                                              $   839,843
                                                                              ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities :
      Accounts payable                                                        $   126,817
      Accrued expenses                                                             36,192
      Taxes payable - other than on income                                          6,076
      Current maturities of equipment loan payable
         and capital lease obligation                                             144,845
      Notes and loans payable                                                      70,000
                                                                              -----------
         Total Current Liabilities                                                383,930
                                                                              -----------

Noncurrent Liability:
      Equipment loan payable and
         capital lease obligation - noncurrent                                     38,538
                                                                              -----------

Commitments and Contingencies

Stockholders' Equity:
      Preferred Stock - $0.0001 par value, 5,000,000 shares authorized:
         Series A Convertible Preferred stock, 1,000 shares authorized,
         990 shares issued and outstanding, liquidation preference $990,000
      Common Stock - $0.0001 par value,
         100,000,000 shares authorized, 51,037,824 shares
         issued and outstanding                                                     5,104
      Additional paid in capital                                                1,564,868
      Accumulated deficit                                                      (1,152,597)
                                                                              -----------
         Total Stockholders' Equity                                               417,375
                                                                              -----------
                                                                              $   839,843
                                                                              ===========
</TABLE>



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



                                       26
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                      CONSOLIDATED STATEMENT OF OPERATIONS
               DECEMBER 11, 2000 (INCEPTION) TO SEPTEMBER 30, 2001




Sales                                                              $    739,065

Cost of sales                                                           591,847
                                                                   ------------
Gross profit                                                            147,218
                                                                   ------------

Operating expenses:
             General and administrative                                 961,080
             Depreciation and amortization                               10,042
                                                                   ------------
                         Total Operating Expenses                       971,122
                                                                   ------------

Loss before other income (expense)                                     (823,904)
                                                                   ------------

Other income(expense):
             Interest income                                              5,914
             Interest expense                                            (4,607)
                                                                   ------------

                         Total Other Income(Expense)                      1,307
                                                                   ------------

Net Loss                                                               (822,597)

Dividends accreted on convertible preferred stock                      (330,000)
                                                                   ------------

Net loss attributable to common stockholders                       $ (1,152,597)
                                                                   ============

Loss per share: Basic                                              $      (0.02)
                                                                   ============

Weighted average number of common shares outstanding: Basic          62,280,893
                                                                   ============


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


                                       27
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
               DECEMBER 11, 2000 (INCEPTION) TO SEPTEMBER 30, 2001
<TABLE>
<CAPTION>



                                                                    Preferred Stock            Common Stock
                                                                  Shares       Amount       Shares         Amount
                                                                -----------   --------   -----------    -----------
<S>                                                                     <C>   <C>              <C>      <C>
Balance at December 11, 2000 (Inception)                                 --   $     --         4,000    $         4

Contribution of common shares by
             founders in connection with recapitalization                --         --        (4,000)            (4)

Recapitalization in connection with reverse
             acquisition of Cirus Telecom, Inc.                          --         --    20,701,824          2,070

Issuance of common stock in connection with
             reverse acquisition of Cirus Telecom, Inc.,
             net of related costs                                        --         --    40,000,000          4,000

Return of common stock issued in connection
             with reverse acquisition of Cirus Telecom, Inc.             --         --   (10,140,000)        (1,014)

Sale of preferred shares                                                990

Issuance of common stock for consulting services                         --         --       476,000             48

Imputed preferred stock dividend attributable to a beneficial
             conversion feature                                          --         --            --             --

Net loss for the period December 11, 2000 (inception)
             to September 30, 2001                                       --         --            --             --
                                                                -----------   --------   -----------    -----------

BALANCE AT SEPTEMBER 30, 2001                                           990   $     --    51,037,824    $     5,104
                                                                ===========   ========   ===========    ===========
[RESTUBBED]
<CAPTION>

                                                                 Additional       Stock                          Total
                                                                  Paid - in    Subscription    Accumulated    Stockholders'
                                                                   Capital      Receivable       Deficit         Equity
                                                                 -----------    -----------    -----------    -----------
<S>                                                              <C>            <C>            <C>            <C>
Balance at December 11, 2000 (Inception)                         $        96    $      (100)   $        --    $        --

Contribution of common shares by
             founders in connection with recapitalization                (96)           100             --             --

Recapitalization in connection with reverse
             acquisition of Cirus Telecom, Inc.                      (68,752)            --             --        (66,682)

Issuance of common stock in connection with
             reverse acquisition of Cirus Telecom, Inc.,
             net of related costs                                    (62,306)            --             --        (58,306)

Return of common stock issued in connection
             with reverse acquisition of Cirus Telecom, Inc.           1,014             --             --             --

Sale of preferred shares                                                  --        990,000             --        990,000

Issuance of common stock for consulting services                     374,912             --             --        374,960

Imputed preferred stock dividend attributable to a beneficial
             conversion feature                                      330,000             --       (330,000)             0

Net loss for the period December 11, 2000 (inception)
             to September 30, 2001                                        --             --       (822,597)      (822,597)
                                                                 -----------    -----------    -----------    -----------

BALANCE AT SEPTEMBER 30, 2001                                    $ 1,564,868    $        --    ($1,152,597)   $   417,375
                                                                 ===========    ===========    ===========    ===========
</TABLE>


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


                                       28
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
               DECEMBER 11, 2000 (INCEPTION) TO SEPTEMBER 30, 2001
<TABLE>
<CAPTION>

<S>                                                                                            <C>
Cash flows from operating activities :
             Net loss                                                                          $(822,597)
             Adjustments to reconcile net loss
                to net cash used in operating activities:
                         Noncash items:
                           Depreciation and amortization                                          10,042
                           Value of common stock issued for services received by the Company     374,959
                         Increase in :
                           Accounts receivable                                                   (27,684)
                           Prepaid expenses and other current assets                             (57,573)
                           Security deposits                                                     (15,262)
                           Accounts payable                                                      126,817
                           Accrued expenses                                                       36,192
                           Taxes payable - other than on income                                    6,076
                                                                                               ---------
             Net cash used in operating activities                                              (369,031)
                                                                                               ---------

Cash flows from investing activities :
             Purchase of plant and equipment                                                    (311,253)
             Lease acquisition costs                                                            (200,000)
             Costs in connection with merger                                                     (53,564)
                                                                                               ---------
             Net cash used in investing activities                                              (564,817)
                                                                                               ---------

Cash flows from financing activities :
             Sale of preferred stock                                                             990,000
             Advances from stockholder                                                            15,712
             Repayment to stockholder                                                            (15,712)
             Repayment of related party debt in
                         connection with recapitalization                                        (71,423)
             Repayment of equipment loan and capital lease obligation                            (54,638)
             Proceeds from notes and loans payable                                                70,000
                                                                                               ---------
             Net cash provided by financing activities                                           933,939
                                                                                               ---------

Increase in cash                                                                                      90

Cash at December 11, 2000                                                                             --
                                                                                               ---------
Cash at September 30, 2001                                                                     $      90
                                                                                               =========
</TABLE>


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



                                       29
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)
                CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
               DECEMBER 11, 2000 (INCEPTION) TO SEPTEMBER 30, 2001
<TABLE>
<CAPTION>


<S>                                                                       <C>
Supplemental disclosure of cash flow information:
             Cash paid during the year for:
                         Interest                                         $   4,086
                                                                          =========
                         Income taxes                                     $      --
                                                                          =========

Schedule of non-cash operating activities:
             Issuance of 476,000 shares of common stock
             for consulting services                                      $ 374,960
                                                                          =========

Schedule of non-cash investing activities :
             Computer equipment and software acquired under
             equipment loan and capital lease obligation                  $ 238,022
                                                                          =========


Schedule of non-cash financing activities :
             Issuance of 40,000,000 shares of common
             stock in connection with Cirus Communications, Inc. merger   $ (58,306)
                                                                          =========

             Cancellation of 10,140,000 shares of common
             stock on cancellation of distribution agreement              $   1,014
                                                                          =========

             Imputed preferred stock dividend attributable to
             a beneficial conversion feature                              $(330,000)
                                                                          =========
</TABLE>





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



                                       30
<PAGE>



                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 1.      ORGANIZATION
             ------------

                 HISTORY
                 -------

                      Cirus Telecom, Inc. ("Cirus") was incorporated in the
                 state of Delaware on August 25, 1997 under the name Sierra
                 Madre Gold Corporation. On October 4, 1999, the name was
                 changed to Capital One Ventures Corp. On February 9, 2001, the
                 name was changed to Cirus Telecom, Inc. in connection with the
                 merger discussed below. Prior to the quarter ended June 30,
                 2001, Cirus was a development stage company with no operations
                 seeking a merger or acquisition of a private entity. Cirus'
                 year-end is September 30.

                      Cirus Communications, Inc. ("Comm") was incorporated
                 in the state of Delaware on December 11, 2000 to operate as a
                 wholesale provider of long distance and telecommunication
                 services under the name DMS Acquisition Corp. ("DMS"). On July
                 26, 2001, DMS changed its name to Cirus Communications, Inc.
                 Comm's year end is September 30.

                      Capital One Acquisition Corp. ("Capital One") was
                 incorporated in the state of Delaware on February 1, 2001 in
                 order to facilitate the merger between Cirus and Cirus Comm.
                 Capital One was wholly owned by Cirus.

                      Cirus Talk, Inc. ("Talk") was incorporated on January 24,
                 2001 under the name Telcorp Holdings LTD. On May 23, 2001 the
                 name was changed to Cirus Talk, Inc. Talk is to operate as the
                 holding and management company for companies to be wholly owned
                 by Talk which will operate as call centers providing long
                 distance and telecommunication services. Talk is wholly owned
                 by Cirus. The following limited liability companies are wholly
                 owned subsidiaries of Talk and have been formed on the
                 following dates: CT Copiague, LLC ("Copiague") and CT
                 Huntington, LLC ("Huntington") were formed on May 24, 2001, CT
                 Freeport, LLC ("Freeport") was formed on June 18, 2001, CT
                 Miami, LLC ("Miami") was formed on August 24, 2001 and CT
                 Little Havana, LLC ("Havana") was formed on August 27, 2001.
                 The telephone call centers commenced operations in August 2001.

                 MERGER
                 ------

                      Pursuant to an agreement and plan of merger dated February
                 8, 2001,Capital One acquired all of the issued and outstanding
                 common stock of Comm in exchange for 40,000,000 shares
                 (retroactively restated for 4 for 1 stock split) of Cirus
                 common stock, which represented 65.9% of the outstanding shares
                 of Cirus common stock after the issuance. Concurrent with the
                 above acquisition, Comm merged with and into Capital One.




                                       31
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001




NOTE 1.      ORGANIZATION (CONTINUED)
             ------------

                 MERGER (CONTINUED)
                 ------

                      Capital One then changed its name to Cirus

                 Communications, Inc. and continues to be wholly owned by Cirus.
                 Cirus and all of its subsidiaries are collectively referred to
                 as the "Company".

                      The merger of Cirus and Comm has been treated as a
                 recapitalization and purchase by Comm as the acquirer (reverse
                 acquisition) of Cirus as control rests with the former Comm
                 shareholders, although prior to the acquisition, Cirus had been
                 the registrant.

                      Therefore, the historical financial statements prior to
                 February 8, 2001 are those of Comm. The transaction is
                 considered a capital transaction whereby Comm contributed its
                 stock for the net assets of the Company. Simultaneously with
                 the merger, Comm's former President was elected as the
                 Company's President.

                 DESCRIPTION OF BUSINESS OPERATIONS
                 ----------------------------------

                      The Company sells telecommunications products and
                 services, including local exchange, local access, domestic and
                 international long distance telephone, calling cards, dedicated
                 access, and other enhanced and value-added telecommunications
                 services.

                      The Company also operates a retail chain of telecom
                 centers which provide distribution of telecom products to the
                 retail market. Services and products include prepaid
                 phonecards, prepaid wireless products, prepaid home services
                 and direct international dialing.

                      The accompanying financial statements have been prepared
                 in conformity with accounting principles generally accepted in
                 the United States which contemplates continuation of the
                 Company as a going concern. The Company has incurred
                 substantial operating losses since inception of operations and
                 as at September 30, 2001 reflects a deficiency in working
                 capital. These conditions indicate that the Company may be
                 unable to continue as a going concern. Management believes that
                 it can achieve profitable operations in the future and that it
                 can continue to raise adequate capital as may be required.
                 However, there can be no assurance that future capital
                 contributions and/or financing will be sufficient for the
                 Company to continue as a going concern or that it can achieve
                 profitable operations in the future. These financial statements
                 do not include any adjustments that might result from the
                 outcome of these uncertainties.



                                       32
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
             ------------------------------------------

                 PRINCIPLES OF CONSOLIDATION
                 ---------------------------

                      The accompanying consolidated financial statements as of
                 September 30, 2001 includes the accounts of the Company and its
                 wholly owned subsidiaries. All significant intercompany
                 transactions and balances have been eliminated.

                 USE OF ESTIMATES
                 ----------------

                      In preparing financial statements in conformity with
                 accounting principles generally accepted in the United States,
                 management is required to make estimates and assumptions that
                 affect the reported amounts of assets and liabilities at the
                 date of the financial statements and revenue and expenses
                 during the reported period. Actual results could differ from
                 those estimates.

                 ACCOUNTS RECEIVABLE
                 -------------------

                      The Company utilizes the allowance method for recognizing
                 the collectibility of its accounts receivables. The allowance
                 method recognizes bad debt expense based on a review of the
                 individual accounts outstanding based on the surrounding facts.
                 As of September 30, 2001, no allowance was deemed necessary by
                 management.

                 PLANT AND EQUIPMENT
                 -------------------

                      Plant and equipment are recorded at cost less accumulated
                 depreciation, which is provided on the straight-line basis over
                 the estimated useful lives of the respective assets, 3 to 7
                 years. Expenditures for maintenance and repairs are expensed as
                 incurred.

                      A long-term lease transaction relating to certain
                 equipment acquired by the Company has been accounted for as a
                 capital lease in accordance with Financial Accounting Standards
                 Board Statement No. 13. The lease obligation has been
                 capitalized as at the beginning of the lease term, reflecting
                 the present value of future rental payments. A corresponding
                 amount has been capitalized as the cost of the equipment and
                 depreciation will be charged over the five year estimated
                 economic life of the asset when it is placed in service.




                                       33
<PAGE>

                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
             ------------------------------------------------------

                 REVENUE RECOGNITION
                 -------------------

                      Revenue consists of sales of branded prepaid phone cards
                 of other distributors, sales of personal identification numbers
                 ("PINS") to wholesale distributors for use in their calling
                 cards and fees charged for retail telephone usage including
                 local exchange, local access, domestic and international long
                 distance, and sales of telephonic services from Cirus owned
                 telecom centers. Sales of PINs may be subject to a right of
                 return and revenue from such sales is recognized when the
                 return privilege has substantially expired or when all
                 conditions have been met to terminate the buyers right of
                 return, whichever occurs first. Revenue is recognized on sale
                 of prepaid phone cards at the time of sale and at Cirus owned
                 telecom centers upon use of telephone services.

                 INCOME TAXES
                 ------------

                      The Company accounts for income taxes under the Financial
                 Accounting Standards Board Statement of Financial Accounting
                 Standards ("SFAS") No. 109 "Accounting for Income Taxes" (SFAS
                 109). Under SFAS 109, deferred tax assets and liabilities are
                 recognized for the future tax consequences attributable to
                 differences between the financial statement carrying amounts of
                 existing assets and liabilities and their respective tax basis.
                 Deferred tax assets and liabilities are measured using enacted
                 tax rates expected to apply to taxable income in the years in
                 which those temporary differences are expected to be recovered
                 or settled. Under SFAS109, the effect on deferred tax assets
                 and liabilities of a change in tax rates is recognized in
                 income in the period that includes the enactment date.

                 FAIR VALUE DISCLOSURE AT SEPTEMBER 30, 2001
                 -------------------------------------------

                      The carrying value of cash, accounts receivable, accounts
                 payable and accrued expenses are a reasonable estimate of their
                 fair value because of the short-term maturity of these
                 instruments. The carrying value of long-term debt closely
                 approximates its fair value based on the instruments' interest
                 rate, terms, maturity date and collateral, if any, in
                 comparison to the Company's incremental borrowing rates of
                 similar financial instruments.



                                       34
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
             ------------------------------------------

                 LOSS PER COMMON SHARE
                 ---------------------

                      Loss per common share is computed pursuant to Financial
                 Accounting Standards Board, Statement of Financial Accounting
                 Standards ("SFAS") No. 128, "Earnings Per Share" ("EPS"). Basic
                 income (loss) per share is computed as net income (loss)
                 available to common shareholders divided by the weighted
                 average number of common shares outstanding for the period.
                 Diluted EPS reflects the potential dilution that could occur
                 from common stock issuable through stock based compensation
                 including stock options, restrictive stock awards, warrants and
                 other convertible securities. Diluted EPS is not presented
                 since the effect would be antidilutive.


NOTE 3.      PLANT AND EQUIPMENT
             -------------------

                      Property and equipment consists of the following as of
                 September 30, 2001:

                      Computer equipment and software                 $391,366
                      Equipment acquired under capital lease            84,500
                      Office equipment                                  27,618
                      Leasehold improvements                            19,914
                      Furniture and fixtures                             5,348
                      Security equipment                                15,529
                      Automobiles                                        5,000
                                                                      --------
                                                                       549,275
                      Less: accumulated depreciation                     5,042
                                                                      --------
                                                                      $544,233

                      At September 30, 2001 the computer equipment and software
                 and the equipment acquired under the capital lease have not yet
                 been placed into operation. Therefore, the Company has not
                 started depreciating such equipment.



                                       35
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001


NOTE 4.      LEASE ACQUISITION COSTS
             -----------------------

                      On July 13, 2001, the Company purchased from a
                 distributor the lease and leaseholds of two call centers
                 operated by the distributor. The Company paid $200,000 for the
                 two leases ($83,500 in cash and a reduction of $116,500 of the
                 Company's accounts receivable from a company controlled by the
                 distributor). The leases were subsequently cancelled when the
                 Company entered into two new leases with the landlords on
                 August 6, 2001 and September 1, 2001, respectively. The lease
                 acquisition costs of $200,000 are being amortized on a
                 straight line basis over the five-year life of each of the two
                 new leases.

NOTE 5.      EQUIPMENT LOAN PAYABLE AND CAPITAL LEASE OBLIGATION
             ----------------------------------------------------

                      On March 23, 2001 the Company entered into an agreement to
                 acquire $215,022 of computer equipment and software. The terms
                 of the agreement call for the following payment terms and
                 conditions: an initial down payment of $61,500 and twelve
                 monthly payments of $13,336 commencing April 2001. The Company
                 has imputed interest related to this agreement at 8% per annum
                 since no interest is stated in the agreement. The equipment
                 loan is secured by the related computer equipment and
                 software.

                 In addition, on March 29, 2001 the Company entered into an
                 agreement to acquire $84,500 of computer equipment under a
                 capital lease for 24 monthly payments of $3,825 commencing
                 July 1, 2001.

                      Future loan principal and minimum lease payments at
                 September 30, 2001 are as follows:
<TABLE>
<CAPTION>

                      YEAR ENDING                                               EQUIPMENT            CAPITAL
                      SEPTEMBER 30,                                               LOAN                LEASE
                                                                                 --------            --------

<S>                         <C>                                                  <C>                 <C>
                            2002                                                 $106,688            $ 46,347
                            2003                                                                       34,760
                                                                                 --------            --------
                            Total minimum payments                                106,688              81,107
                            Less: Amount representing interest                      3,131               1,281
                                                                                 --------            --------

                            Present value of net minimum payments                 103,557              79,826

                            Less: Current maturities                              103,557              41,288
                                                                                 --------            --------

                            Long-term portion of equipment loan
                               payable and capital lease obligation              $                   $  38,538
                                                                                 ========            =========
</TABLE>

                      Interest expense on equipment loan and capital lease
                 obligation for the year ended September 30, 2001 was $4,086.



                                       36
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 6.      NOTES AND LOANS PAYABLE ($70,000)
             ---------------------------------

                      On August 2, 2001 and August 10, 2001, the Company
                 received short-term financing totaling $40,000 from an
                 unrelated company to finance its short-term cash flow
                 requirements. The promissory notes are due and payable in 90
                 days and carry an interest rate of 8.5% per annum. On November
                 23, 2001, the Company repaid the entire balance due on both of
                 these promissory notes. The Company recorded interest expense
                 of $522 through September 30, 2001.

                      In June 2001, the Company purchased certain office
                 furniture and equipment for $50,000 from a company owned by
                 its Chief Technology Officer. As of September 30, 2001, there
                 is a balance due of $30,000, which is noninterest bearing. On
                 November 26, 2001, the Company paid $20,000 against this loan.


NOTE 7.      PROVISION FOR INCOME TAX
             ------------------------

                      Income taxes are provided for the tax effects of
                 transactions reported in the financial statements and consist
                 of taxes currently due plus deferred taxes related to
                 differences between the financial statement and tax bases of
                 assets and liabilities for financial statement and income tax
                 reporting purposes. Deferred tax assets and liabilities
                 represent the future tax return consequences of these
                 temporary differences, which will either be taxable or
                 deductible in the year when the assets or liabilities are
                 recovered or settled. Accordingly, measurement of the deferred
                 tax assets and liabilities attributable to the book-tax basis
                 differentials are computed at a rate of 34% federal, 9% state,
                 and 9% city. Cirus and its subsidiaries file consolidated tax
                 returns for federal, state and city tax purposes.

                      The only material tax effect of significant items
                 comprising the Company's current deferred tax assets as of
                 September 30, 2001, is the Company's net operating losses
                 "NOL's" which amounted to approximately $825,000 as of
                 September 30, 2001. The deferred tax asset associated with the
                 Company's NOL's amounted to approximately $420,000 as of
                 September 30, 2001.

                      In accordance with SFAS 109, the Company has recorded a
                 100% valuation allowance for such deferred tax asset since
                 management could not determine that it was "more likely than
                 not" that the deferred tax asset would be realized in the
                 future. The Company's NOL's will expire in 2021 if not
                 utilized prior.




                                       37
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 8.      COMMITMENTS AND CONTINGENCIES

                 LEASE COMMITMENTS
                 -----------------

                      The Company leases its administrative offices under the
                 terms of a sublease with a related party at an annual rental of
                 approximating $15,500, which expires on August 31, 2002. The
                 Company leases space to store equipment on a month-to-month
                 basis with annual payments approximating $7,200.

                      As at September 30, 2001, the Company is obligated under
                 the terms of five separate lease agreements for retail space to
                 be used for its telephone call centers. The five leases are for
                 3 and 5 year terms expiring between May 31, 2004 and August 31,
                 2006.

                      The Company's approximate future minimum rentals under the
                 non-cancelable operating leases in effect on September 30, 2001
                 are as follows:

                          YEAR ENDED
                         SEPTEMBER 30,
                         -------------

                             2002                               $ 135,120
                             2003                                 123,031
                             2004                                 118,629
                             2005                                 107,547
                             2006                                  73,068
                                                                ---------
                                                                $ 557,395
                                                                =========

             SIGNIFICANT CUSTOMERS
             ---------------------

                      The Company has derived approximately 56% of its revenues
                 from a related party (see note 10 "Distribution Agreement" for
                 termination of a contract with this customer) and 44% of its
                 revenues from four unrelated parties for the period from
                 December 11, 2000 (date of inception) to September 30, 2001.




                                       38
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 9.      STOCKHOLDERS' EQUITY
             --------------------

                 ACQUISITION OF SUBSIDIARY
                 -------------------------

                      Pursuant to the agreement and plan of merger, dated
                 February 8, 2001, Cirus issued 40,000,000 shares of its common
                 stock to enable its subsidiary, Capital One, to acquire and
                 merge with Comm. In addition to the merger agreement, Cirus and
                 the four stockholders of Comm signed a lock-up agreement in
                 which the stockholders agreed not to sell, assign, transfer,
                 pledge hypothecate or otherwise dispose of the Cirus shares
                 they received in the merger until one year after the date of
                 merger.

                 PREFERRED STOCK
                 ---------------

                      On February 6, 2001 the Board of Directors of the Company
                 adopted and created a series of preferred stock consisting of
                 1,000 shares designated as the Series A Convertible Preferred
                 Stock ("Preferred Stock"). Each share of Preferred Stock has a
                 liquidation preference of $1,000. The Preferred Stock is
                 convertible into common stock at any time after the 30th
                 calendar day the Company receives payment in full. The
                 conversion rate is equal to $1,000 per share of preferred stock
                 divided by 75% of the average market price of the common stock
                 for ten days prior to the date of conversion. The conversion
                 rate is subject to adjustment under certain circumstances.
                 Outstanding Preferred Stock may be repurchased by the Company
                 from holders of shares of Preferred Stock by: (i) delivering
                 notice in writing thereof to such holders prior to the date
                 which is one year following the date on which the Company
                 received payment in full for the Preferred Stock and issued the
                 Preferred Stock to a particular holder of Preferred Stock (the
                 "Issuance Date"); and (ii) by the payment to such holders of
                 the sum of $1,250 per share of Preferred Stock so repurchased
                 within three (3) business days of such notice by way of wire
                 transfer, certified check or bank draft.

                      The Company may not repurchase any shares of Preferred
                 Stock for which it has received a Conversion Notice. As a
                 condition to the closing of the above agreement and plan of
                 merger with Comm, Cirus sold 850 shares of the Preferred Stock
                 for total proceeds of $850,000 to 3 entities. Subsequently,
                 through September 30, 2001, the Company has sold an additional
                 140 shares of the Preferred Stock for total proceeds of
                 $140,000. Each entity holding such shares shall only be allowed
                 to convert preferred shares into common stock up to a maximum
                 of 9.9% of the outstanding shares of common stock following the
                 conversion. The calculation includes common stock beneficially
                 owned by the entity and its affiliates.




                                       39
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001



NOTE 9.      STOCKHOLDERS' EQUITY (CONTINUED)
             --------------------

                 PREFERRED STOCK (CONTINUED)
                 ---------------

                      The holders of such shares are not entitled to receive any
                 dividends. In accordance with Financial Accounting Standards
                 Boards Emerging Issues Task Force ("EITF") Issue No. 98-5,
                 "Accounting for Convertible Securities with Beneficial
                 Conversion Features or Contingently Adjustable Conversion
                 Ratios" and EITF Issue No. 00-27, "Application of Issue No.
                 98-5 to Certain Convertible Investments", the Company has
                 calculated the discount resulting from the beneficial
                 conversion option available to the preferred holders (75% of
                 market value) to be $330,000, based on the market value of
                 common stock at the date of preferred stock issuance. The
                 discount is being amortized from the date of issuance to the
                 earliest conversion date and has been treated as a preferred
                 dividend. For the period from December 11, 2000 (date of
                 inception) to September 30, 2001 the Company recorded a
                 preferred dividend of $330,000.

                 ISSUANCE OF COMMON STOCK FOR CONSULTING SERVICES
                 ------------------------------------------------

                      In February 2001, the Company entered into a consulting
                 agreement for investor relations services for a six month
                 period. In exchange for the services to be rendered, the
                 consultant was to receive 4.9% of the total issued and
                 outstanding common stock of the Company. Due to unfulfilled
                 performance-based representations and other issues, this
                 agreement was terminated as of June 21, 2001. In settlement of
                 this agreement the consultant agreed to a total of 250,000
                 shares of common stock, which was valued at $125,000 and the
                 remaining previously issued shares were returned and retired by
                 the Company. At September 30, 2001, the Company recorded
                 $125,000 of consulting expense related to this agreement.

                      On March 30, 2001, the Company entered into a consulting
                 agreement for promotion and investor relations. In exchange for
                 services rendered the consultant received a non-refundable
                 commitment fee equal to 100,000 shares of the Company's common
                 stock, which has been valued at $125,000. The Company has
                 agreed to allow the consultant "Piggy-back Registration Rights"
                 for the shares issued to the consultant. This allows the
                 consultant the right to "Piggy-back" on any registration
                 offering by the Company without cost to the consultant. In
                 addition to the commitment fee the Company has agreed to pay
                 $5,000 per month under this agreement. In July 2001, the
                 Company canceled the services of the consultant. The Company
                 has recorded to date $125,000 of consulting expense related to
                 this agreement and an additional $15,000 paid in cash through
                 September 30, 2001.




                                       40
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001




NOTE 9.      STOCKHOLDERS' EQUITY (CONTINUED)
             --------------------

                 ISSUANCE OF COMMON STOCK FOR CONSULTING SERVICES (CONTINUED)
                 ------------------------------------------------

                      On May 4, 2001, the Company entered into a consulting
                 agreement for a one-month term for marketing to new investors.
                 In exchange for services rendered the consultant received
                 50,000 shares of restricted common stock, which has been valued
                 at $67,500 and expensed as consulting fees.

                      On June 27, 2001, the Company entered into a new six
                 months consulting agreement for marketing to new investors. In
                 exchange for services to be rendered the consultant was issued
                 300,000 shares of restricted common stock, which were held in
                 escrow by the Company's attorney. This agreement was valued at
                 $258,000. The terms of the agreement allowed the Company to
                 cancel the agreement if it was not satisfied with the
                 consultant's work. On August 23, 2001 this agreement was
                 terminated. In settlement of this agreement the consultant was
                 delivered a total of 30,000 shares of common stock, which were
                 valued at $25,500 and its attorney returned the remaining
                 270,000 previously issued shares to the Company. At September
                 30, 2001, the Company recorded $25,500 of consulting expense
                 related to this agreement.

                      On July 3, 2001, the Company entered into a consulting
                 agreement for a one-month term for marketing to new investors.
                 In exchange for services rendered the consultant received 6,000
                 shares of restricted common stock, which has been valued at
                 $5,400 and expensed as consulting fees.

                      On July 23, 2001, the Company entered into a consulting
                 agreement for preparation of a report for marketing to new
                 investors. In exchange for services rendered the consultant
                 received 20,000 shares of restricted common stock, which has
                 been valued at $12,980 and expensed as consulting fees.

                 On July 27, 2001, the Company entered into a one year
                 consulting agreement for services in connection with the
                 Company's public relations and investor relations. In exchange
                 for services rendered the consultant received 20,000 shares of
                 restricted common stock, which has been valued at $13,580. As
                 of September 30, 2001, the Company has expensed $2,263 as
                 consulting expense and $11,317 is being carried as prepaid.




                                       41
<PAGE>


                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001




NOTE 9.       STOCKHOLDERS' EQUITY (CONTINUED)
              --------------------

                 COMMON STOCK SPLIT
                 ------------------

                       On March 30, 2001, the stockholders voted to increase the
                 authorized number of shares of common stock from 30,000,000 to
                 100,000,000 and to effect a four for one forward split of the
                 Company's outstanding common stock to all shareholders of
                 record as of April 6, 2001. The number of shares of common
                 stock outstanding increased from 15,237,956 to 60,951,824. A
                 total of $4,571 was reclassified from the Company's additional
                 paid in capital account to the Company's common stock account.
                 All share and per share amounts have been restated to
                 retroactively reflect the stock split.



NOTE 10.      RELATED PARTY TRANSACTIONS
              --------------------------

                  EMPLOYMENT AGREEMENTS
                  ---------------------

                       On February 8, 2001, Comm entered into employment
                 agreements with two key officers/shareholders, the chief
                 executive officer and president and the chief technology
                 officer. The employment agreements are for a term of two years
                 with annual salaries of $90,000 and $108,000, respectively,
                 for the first year and $120,000 each for the second year. The
                 chief executive officer owned 25% of Comm prior to its merger
                 with Capital One. In addition, the chief technology officer
                 owned 100% of a company that was a 23% shareholder of Comm.

                       As a result of the agreement and plan of merger, the
                 chief executive officer now owns 16.5% of Cirus and the
                 company owned by the chief technology officer now owns 15.2%
                 of Cirus. For the period from December 11, 2000 (date of
                 inception) to September 30, 2001, the Company has recorded
                 $140,250 of officers' salaries under these agreements.





                                       42
<PAGE>



                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001





NOTE 10.      RELATED PARTY TRANSACTIONS (CONTINUED)
              --------------------------

                  DISTRIBUTION AGREEMENT
                  ----------------------

                       On February 6, 2001, Comm entered into a distribution
                  agreement with a company (the "distributor") that owned 27% of
                  Comm prior to the merger. The agreement was for two years with
                  an option to renew for an additional year at the end of the
                  initial term. As a result of the merger, the distributor owned
                  17.8% of Cirus. The distribution agreement provided the
                  distributor the right to purchase long distance and
                  telecommunications services from Comm for the purpose of
                  distributing prepaid calling cards.

                       On September 28, 2001, pursuant to a release agreement,
                  the Company and the distributor mutually agreed to release
                  each other of their obligations as provided in the
                  Distribution Agreement dated February 6, 2001, the Agreement
                  and Plan of Merger dated February 8, 2001 and a
                  Telecommunications Service Agreement dated January 16, 2001.
                  Consequently, the distributor returned 10,140,000 shares of
                  the Company's common stock received by the distributor
                  pursuant to the Agreement and Plan of Merger. The Company
                  subsequently retired the shares received.

                       In addition, during the period December 11, 2000
                  (inception) to September 30, 2001, the Company purchased
                  approximately $115,000 of phone cards from the aforementioned
                  distributor.




                                       43
<PAGE>



                      CIRUS TELECOM, INC. AND SUBSIDIARIES
                      (FORMERLY CAPITAL ONE VENTURES CORP.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        FOR THE PERIOD DECEMBER 11, 2000
                    (DATE OF INCEPTION) TO SEPTEMBER 30, 2001





NOTE 11.      SUBSEQUENT EVENTS
              -----------------

                      On October 2, 2001, the Company issued 10 shares of its
                  Series A Convertible Preferred stock and received $10,000.

                      On October 2, 2001 the Board of Directors of the Company
                  adopted and created a series of preferred stock consisting of
                  1,000 shares designated as the Series B Convertible Preferred
                  Stock ("Preferred B"). Each share of Preferred B stock has a
                  liquidation preference of $1,000. The Preferred B stock is
                  convertible into common stock at any time after the 30th
                  calendar day the Company receives payment in full. The
                  conversion rate is equal to $1,000 per share of preferred
                  stock divided by 75% of the average market price of the common
                  stock for ten days prior to the date of conversion. The
                  conversion rate is subject to adjustment under certain
                  circumstances. Outstanding Preferred B stock may be
                  repurchased by the Company from holders of shares of Preferred
                  B stock by: (i) delivering notice in writing thereof to such
                  holders prior to the date which is one year following the date
                  on which the Company received payment in full for the
                  Preferred B stock and issued the Preferred B stock to a
                  particular holder of Preferred B stock (the "Issuance Date");
                  and (ii) by the payment to such holders of the sum of $1,250
                  per share of Preferred B stock so repurchased within three (3)
                  business days of such notice by way of wire transfer,
                  certified check or bank draft. The Company has agreed to allow
                  the Preferred B shareholders "Piggy-back Registration Rights"
                  for the shares converted to common stock. This allows the
                  shareholder the right to "Piggy-back" on any registration
                  offering by the Company without cost to them. Between October
                  1, 2001 and January 14, 2002, 385 Preferred B shares were
                  issued by the Company and the Company received $385,000.

                      On November 14, 2001, the Company renegotiated its
                  equipment loan dated March 23, 2001 with the supplier, wherein
                  the then outstanding balance of $99,188, plus a service
                  contract of $17,053 through June 2002 (aggregating $116,241)
                  will be payable in 15 monthly installments of $8,100,
                  including interest. The first payment is due on December 1,
                  2001.

                      On November 15, 2001, the Company entered into a one year
                  agreement for services in connection with the development of
                  its website and maintenance. In exchange for services rendered
                  the consultant received 300,000 shares of restricted common
                  stock, which has been valued at $126,000.



                                       44
<PAGE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE.

         On February 23, 2001, in connection with the Acquisition, the Company
notified N.I. Cameron Inc., its independent public accountants, that the Company
was terminating the services of N.I. Cameron Inc., effective as of February 28,
2001. The Company's sole member of the Board of Directors approved such
decision.

         During the time that N.I. Cameron Inc. was the Company's principal
independent auditor, N.I. Cameron Inc. never issued a report on the financial
statements of the Company which contained any adverse opinion or disclaimer of
opinion, or was qualified or modified as to uncertainty, audit scope or
accounting principles. Furthermore, during the time that N.I. Cameron Inc. were
the Company's principal accountants, there were no disagreements within the
meaning of Instruction 4 to Item 304 of Regulation S-B under the Securities
Exchange Act of 1934 on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of N.I. Cameron Inc., would
have caused them to make reference in connection with their opinion to the
subject matter of the disagreement in connection with any report they might have
issued.

         On April 25, 2001, the Company, notified Friedman, Alpren & Green LLP,
its independent public accountants, that the Company was terminating its
services, effective as of that date. The Company's Board of Directors approved
such decision.

         During the two most recent fiscal years and the subsequent interim
period preceding April 25, 2001, Friedman Alpren & Green LLP never issued a
report on the financial statements of the Company which contained any adverse
opinion or disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles. Furthermore, during the two
most recent fiscal years and the subsequent interim period preceding April 25,
2001, there were no disagreements with Friedman Alpren & Green LLP within the
meaning of Instruction 4 to Item 304 of Regulation S-B under the Securities
Exchange Act of 1934 on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Friedman Alpren & Green
LLP, would have caused them to make reference in connection with their opinion
to the subject matter of the disagreement in connection with any report they
might have issued.

On April 25, 2001, the Company engaged Massella, Tomaro & Co., LLP, as its
independent public accountants. The Company did not previously consult with
Massella, Tomaro & Co., LLP regarding any matter, including but not limited to:

         -        the application of accounting principles to a specified
                  transaction, either completed or proposed; or the type of
                  audit opinion that might be rendered on the Company's
                  financial statements; or
         -        any matter that was either the subject matter of a
                  disagreement (as defined in Item 304(a)(1)(iv) of Regulation
                  S-B and the related instructions) or a reportable event (as
                  defined in Item 304(a)(1)(v) of Regulation S-B).

                                       45
<PAGE>


         On December 20, 2001,the Company notified Massella, Tomaro & Co., LLP,
its independent public accountants, that the Company was terminating its
services, effective as of that date. The Company's Board of Directors approved
such decision.

         On December 21, 2001, the Company engaged Freeman & Davis LLP, as its
independent public accountants. The Company did not previously consult with
Freeman & Davis LLP regarding any matter, including but not limited to:

         -        the application of accounting principles to a specified
                  transaction, either completed or proposed; or the type of
                  audit opinion that might be rendered on the Company's
                  financial statements; or
         -        any matter that was either the subject matter of a
                  disagreement (as defined in Item 304(a)(1)(iv) of Regulation
                  S-B and the related instructions) or a reportable event (as
                  defined in Item 304(a)(1)(v) of Regulation S-B).





                                       46
<PAGE>


                                    PART III



ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.


         The following persons are our executive officers and directors as of
the date hereof:

NAME                  AGE      OFFICES HELD
----                  ---      ------------
Amar Bahadoorsingh    31       Chief Executive Officer, Chief Financial Officer,
                                    President and Director

Kashif Syed           28       Vice-President, CTO and Director


         AMAR BAHADOORSINGH. Mr. Bahadoorsingh has been our Chairman, Chief
Executive Officer and a director of ours since February 2001. Prior to his
appointment at Cirus Mr. Bahadoorsingh was the President of 9278 Communications,
Inc. and iLink Telecom, Inc. Mr. Bahadoorsingh holds a Bachelor of Arts degree
in Sociology from the University of Western Ontario located in London, Ontario,
Canada and a Master's of Business Administration degree from Queen's University,
located in Kingston, Ontario, Canada, with a focus on management and marketing
strategy.

         KASHIF SYED. Mr. Syed has been our Vice-President, Chief Technical
Officer and our director of ours since December 1999. From the period 1996 to
his appointment at Cirus, Mr. Syed was Chief Executive Officer of TCI Telecom,
Inc. based in Flushing, New York. TCI specialized in the sale and deployment of
telecommunications equipment and software. Mr. Syed maintained the relationships
with and supported 12 Telco networks. He was responsible for planning and
strategizing LAN's and WAN's, as well as maintaining and managing the technical
division and the training of new and existing clients on telephony applications.
Previous to this position, he was the Chief Operation Officer for Universal
Network Solutions during the period 1992-1995. He managed a client-base of
approximately 300 people in conjunction with managing 16 employees and was
responsible for the deployment of and the termination through IPL's
(International phone lines) and the implementation of billing and accounting
package as well as training staff therein to ensure growth and profitability.
Mr. Syed was enrolled in the Bachelor of Business Administration program at
Century University. Mr. Syed resigned all positions with the Company as of
December 19, 2001.

Board of Directors

         All of our directors hold office until the next annual meeting of
stockholders and the election and qualification of their successors. Our
executive officers are elected annually by the Board of Directors to hold office
until the first meeting of the Board following the next annual meeting of
stockholders and until their successors are chosen and qualified.


                                       47
<PAGE>

Directors' Compensation

         We reimburse our directors for expenses incurred in connection with
attending Board meetings but we do not pay director's fees or other cash
compensation for services rendered as a director.


ITEM 10. EXECUTIVE COMPENSATION.

Summary Compensation

         Set forth below is the aggregate compensation for services rendered in
all capacities to us during our fiscal years ended September 30, 2001, for our
Chief Executive Officer and Chief Technical Officer. No other executive officer
of ours had compensation in excess of $100,000 during the fiscal year ended
September 30, 2001.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                      LONG-TERM
                         ANNUAL COMPENSATION          COMPENSATION AWARDS
                         -------------------          -------------------
NAME AND
PRINCIPAL                           ANNUAL                                   SECURITIES UNDERLYING
POSITION                 YEAR       SALARY          BONUS      OTHER          OPTIONS/SARS
--------                 ----       ------          -----      -----          ------------
<S>                      <C>        <C>            <C>        <C>
Amar Bahadoorsingh,
Chairman and Chief       2001       $ 90,000       $   --     $   --
Executive Officer
--
Kashif Syed              2001      $ 108,000       $   --     $   --
CTO and Director
</TABLE>

         We did not grant any stock options to the named directors and officers
in 2001.

EMPLOYMENT AGREEMENTS

Contract with Amar Bahadoorsingh

         On January 13, 2001, DMS Acquisition Corp., the predecessor to Cirus
Telecom, Inc., entered into an Employment Agreement with Amar Bahadoorsingh.
Under the terms of this agreement, Mr. Bahadoorsingh will serve as our Chairman



                                       48
<PAGE>

of the Board and Chief Executive Officer for an initial term of two years.
Pursuant to the agreement, Mr. Bahadoorsingh receives a base salary of $90,000
during his first year of employment, and $120,000 during his second year. In
addition, during each year of employment Mr. Bahadoorsingh shall receive cash
bonuses and stock option grants in amounts to be determined by our Board of
Directors. Mr. Bahadoorsingh is also entitled to participate in all plans
adopted for the general benefit of our employees and executive employees.

Contract with Kashif Syed

         On January 13, 2001, DMS Acquisition Corp., the predecessor to Cirus
Telecom, Inc., entered into an Employment Agreement with Kashif Syed. Under the
terms of this agreement, Mr. Syed will serve as our Chief Technology Officer and
Director for an initial term of two years. Mr. Syed resigned from all positions
with the Company and terminated his employment agreement with the consent of the
Company on December 19, 2001.

         Pursuant to the agreement, Mr. Syed received a base salary of $108,000
during his first year of employment, and was entitled to $120,000 during his
second year. In addition, during each year of employment Mr. Syed was entitled
to receive cash bonuses and stock option grants in amounts to be determined by
our Board of Directors. Mr. Syed was also entitled to participate in all plans
adopted for the general benefit of our employees and executive employees.

Limitation of Liability and Indemnification Matters

         Article nine of our certificate of incorporation provides that the
personal liability of our directors will be eliminated to the fullest extent
permitted by the provisions of paragraph (7) of subsection (b) of ss.102 of the
General Corporation Law of the State of Delaware, as the same may be amended and
supplemented.

         Article ten of our certificate of incorporation provides that we will,
to the fullest extent permitted by the provisions of the General Corporation Law
of the State of Delaware, as now or hereafter in effect, indemnify all persons
whom we may indemnify under such provisions. The indemnification provided by
this section shall not limit or exclude any rights, indemnities or limitations
of liability to which any person may be entitled, whether as a matter of law,
under our bylaws, by agreement, vote of our stockholders or disinterested
directors, or otherwise. Except as specifically required by the General
Corporation Law of the State of Delaware, as the same exists or may be amended,
none of our directors of will be liable to us or our stockholders for monetary
damages for breach of his or her fiduciary duty as a director. No amendment to
or repeal of this provision of our certificate of incorporation will apply to or
have any effect on the liability or alleged liability of any director for or
with respect to any acts or omissions of that director occurring prior to the
amendment or repeal.

         Under Section 145 of the Delaware General Corporation Law, we have the
power, under certain circumstances, to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
contemplated action, suit or proceeding, whether civil, criminal, administrative



                                       49
<PAGE>

or investigative, by reason of the fact that he is or was a director, officer,
employee or agent of ours, or is or was serving at our request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including attorneys' fees, and
judgments against, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the action, suit or proceeding.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, or persons controlling us
pursuant to the foregoing provisions, we have been informed that, in the opinion
of the SEC, that type of indemnification is against public policy as expressed
in the Act and is therefore unenforceable.




                                       50
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table sets forth information as of the date hereof, based
on information obtained from the persons named below, with respect to the
beneficial ownership of shares of our common stock by (i) each of our directors,
(ii) our named executive officer, (iii) each person known by us to be the owner
of more than 5% of our outstanding shares of common stock and (iv) all executive
officers and directors as a group.

         Unless otherwise indicated, we believe that all persons named in the
table have sole voting and investment power with respect to all shares of common
stock beneficially owned by them. A person is deemed to be the beneficial owner
or securities that can be acquired by such person within 60 days from the date
of this prospectus upon exercise of options, warrants or convertible securities.
Each beneficial owner's percentage ownership is determined by assuming that all
options, warrants or convertible securities that are held by that person, but
not those held by any other person, and which are exercisable within 60 days of
the date of this prospectus have been exercised and converted. This table
assumes a base of 51,820,890 shares of common stock outstanding as of the date
hereof, before any consideration is given to outstanding options, warrants or
convertible securities.

         Unless otherwise noted, the address for each of the persons listed
below is: c/o Cirus Telecom, Inc. 43-06 Main St. Flushing, NY 11355

            The following sets forth the current beneficial ownership of the
Company's common stock:

Name of                                         Shares of               Percent
Beneficial Owner                               Common Stock             of Class
----------------                              ------------              --------

Amar Bahadoorsingh                             10,000,000                 19.3%

Universal Network
Solutions, Inc.                                 9,200,000                 17.7%

Kashif Syed                                     9,200,000 (1)             17.7%

Hansa Capital Corp.                            10,000,000                 19.3%

All officers and directors (2 persons)         19,200,000                 37%

(1.)     Represents shares beneficially owned by Mr. Syed as the owner of all of
the issued and outstanding capital stock of Universal Network Solutions, Inc.


                                       51
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         From the inception of DMS Acquisition Corp. until September 28, 2001,
Cirus Telecom, Inc. was doing business with 9278 Communications, Inc. an
original shareholder of DMS Acquisition Corp. and an owner to that point, of
10,800,000 shares of Cirus Telecom, Inc. common stock. Cirus had a contract to
provide 9278 with $24 million of telecom services. This contract was
subsequently cancelled.

         Universal Network Solutions, Inc. is a corporation owned by one of the
directors and officers of Cirus Telecom, Inc. This company has provided
consulting services to Cirus.

         ABDE Holdings, Inc. is a corporation owned by one of the directors and
officers of Cirus Telecom, Inc. This company has provided consulting services to
Cirus.

                                    PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
         FORM 10-KSB.

         Exhibit No.                 Exhibit
         -----------                 -------
         3.1      Certificate of Incorporation, as amended to date
         3.2      Certificate of Designation of Series A Preferred Stock
         3.3      Certificate of Designation of Series B Preferred Stock
         3.2      Bylaws
         4.1      Specimen stock certificate
        10.1      Employment Agreement between the Company and
                  Amar Bahadoorsingh
        10.2      Telecommunications services agreement between THC Internet
                  Solutions, Inc. and the Company, dated as of May 22, 2000



                                       52
<PAGE>


                                   Signatures

         In accordance with Section 13 or 15 (d) of the Securities Exchange Act
of 1934, the Registrant has caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Date:   January 16, 2002

                         CIRUS TELECOM, Inc.


                         By:   /s/  AMAR BAHADOORSINGH
                         ------------------------------------------------------
                                    Amar Bahadoorsingh, President and
                                    Chief Executive Officer
                                    (Principal Executive and Accounting Officer)



         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.



/s/ AMAR BAHADOORSINGH     President, Chief Executive Officer   January 16, 2002
----------------------     and Director
Amar Bahadoorsingh



                                       53