UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                                   (Mark One)

         [X]      Annual report under Section 13 or 15(d) of the Securities
                  Exchange Act of 1934

                   For the fiscal year ended December 31, 2001

         [ ]      Transition report under Section 13 or 15(d) of the Securities
                  Exchange Act of 1934

              For the transition period from _________ to _________

                           Commission File No. 0-29487

                              CONUS HOLDINGS, INC.
                  --------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

          NEVADA                                              33-0850619
          ------                                              ----------
(State  or  Other  Jurisdiction  of                          (IRS  Employer
Incorporation  or  Organization)                        Identification  Number)

1517 E. 7th Avenue, Suite C, Tampa, Florida                     33605
--------------------------------------------                    -----
(Address  of  Principal  Executive  Offices)                  (Zip  Code)

                                 (813) 248-0089
                            -------------------------
                           (Issuer's Telephone Number)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
           -----------------------------------------------------------
                                     (None)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
           -----------------------------------------------------------
                         Common Stock, par value $0.001
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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]

State issuer's revenues for its most recent fiscal year. $ 0

State the aggregate market value of voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in rule
12b-2 of the Exchange Act.) N/A.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of March 18, 2002 is 1,000,000 common shares.

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them
and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc. ) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The listed
documents should be clearly described for identification purposes.

None.

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

                                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.

Item 8           Changes In and Disagreements With Accountants on Accounting and
                  Financial  Disclosure.

                                    PART III

Item 9           Directors, Executive Officers, Promoters and
                 Control Persons; Compliance With Section 16(a) of
                 the Exchange Act.

Item 10          Executive Compensation.

Item 11          Security Ownership of Certain Beneficial Owners and Management.

Item 12          Certain Relationships and Related Transactions.

Item 13          Exhibits and Reports on Form 8-K.

                                       2
<PAGE>

                                INTRODUCTORY NOTE

This Annual Report on Form 10-KSB may be deemed to contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company intends that
such forward-looking statements be subject to the safe harbors created by such
statutes. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Annual Report contains forward-looking statements regarding
the financial condition, operating results, business prospects or any other
aspect of the Company, please be advised that the Company's actual financial
condition, operating results and business performance may differ materially from
that projected or estimated by the Company in forward-looking statements. The
differences may be caused by a variety of factors, including but not limited to
adverse economic conditions, intense competition, including intensification of
price competition and entry of new competitors and products, adverse federal,
state and local government regulation, inadequate capital, unexpected costs and
operating deficits, increases in general and administrative costs, lower sales
and revenues than forecast, loss of customers, customer returns of products sold
to them by the Company, disadvantageous currency exchange rates, termination of
contracts, loss of suppliers, technological obsolescence of the Company's
products, technical problems with the Company's products, price increases for
supplies and components, inability to raise prices, failure to obtain new
customers, litigation and administrative proceedings involving the Company, the
possible acquisition of new businesses that result in operating losses or that
do not perform as anticipated, resulting in unanticipated losses, the possible
fluctuation and volatility of the Company's operating results, financial
condition, and stock price, losses incurred in litigating and settling cases,
dilution in the Company's ownership of its business, adverse publicity and news
coverage, inability to carry out marketing and sales plans, loss or retirement
of key executives, changes in interest rates, inflationary factors, and other
specific risks that may be alluded to in this Annual Report or in other reports
issued by the Company. In addition, the business and operations of the Company
are subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements. In light of the significant uncertainties inherent
in the forward-looking information included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be achieved.

                                       3
<PAGE>

                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

BACKGROUND OF THE COMPANY

The Company was organized under the Laws of the State of Nevada, on April
9,1998, as a blank check or shell company whose primary purpose is to engage in
a merger with, or acquisition of one or a small number of private firms. Such
firms are expected to be private corporations, partnerships or sole
proprietorships. From inception through the present time, the primary activity
of the Company has been directed towards organizational efforts, compliance
matters and locating potential merger candidates.

On August 6, 2001, M. Richard Cutler, the then majority shareholder of the
Company and sole officer and director, entered into a Stock Purchase Agreement
with BKR Investments, Inc. a Florida corporation. Pursuant to the terms of the
Stock Purchase Agreement, Mr. Cutler sold 600,000 shares of the Company's Common
Stock owned by him that represented 60% of the outstanding shares of the
Company's Common Stock, to BKR Investments, Inc. for $25,000.

On August 17, 2001, in accordance with the Stock Purchase Agreement, Mr. Cutler
appointed Richard J. Diamond an officer and director of the Company.
Simultaneously therewith, Mr. Cutler resigned his positions as sole officer and
director of the Company, thereby leaving Mr. Diamond as the Company's sole
officer and director.

On or about September 15, 2001, the Company formed two Florida companies as
wholly owned subsidiaries, Conus Marketing, Inc. and Conus Computers, Inc. The
companies were formed with the objective of marketing and selling various
products through telemarketing, direct mail, coupons, infomercials and the
Internet. To this end, the Company began negotiating several strategic marketing
agreements and expected to begin operations during September 2001. As a result
of a dispute, the Company ended negotiations related to the marketing agreements
and terminated its initial plan of operations. During this period the Company
began negotiating with In-Touch Marketing, Inc. regarding the potential
acquisition of In-Touch Marketing's assets, however these negotiations have been
terminated. Accordingly, the Company is still a "blank check" or "shell"
company. The Company has not engaged in any significant efforts to identify
possible merger or acquisition candidates and has no market studies available to
it. At present, the Company has no business opportunities under contemplation
for acquisitions.

BUSINESS OBJECTIVES

The Company plans to seek one or more potential businesses that Management
believes warrant the Company's involvement. As a result of its limited
resources, the number of potential businesses available will be extremely
limited. The Company will not restrict its search to any particular industry.
Nevertheless, Management does not intend to become involved with (i) a company
that is an investment company under the Investment Company Act of 1940; (ii)
with a company that is a broker or dealer of investment securities or
commodities, or (iii) a company in which the officers, directors or shareholders
of the target company are officers or directors of the Company. These business
objectives are extremely general and are not intended to be restrictive upon the
discretion of Management. Except for the general limitations contained above,
Management has not developed and does not intend to develop specific criteria to
be followed in the search for and selection of a business acquisition.
Shareholders will therefore have extremely limited information as to

                                       4
<PAGE>

Management's specific intentions and investors will be unable to determine even
the industries which Management might consider.

The target company may be (i) in its preliminary or developmental stage, (ii) a
financially troubled business or (iii) a going concern. It is impossible to
determine the capital requirements of the target business or whether such
business may require additional capital. Some target companies may seek to
establish a public trading market for their securities.

The analysis of potential business endeavors will be undertaken by or under the
supervision of Management. At present, Mr. Richard J. Diamond is the Company's
sole officer and director. Management will rely on its own business judgment in
evaluating businesses that the Company may acquire or participate. See Item 9 -
Directors, Executive Officers, Promoters and Control Persons. Locating and
investigating specific business proposals may take an extended period of time.
If a business is located, the negotiation, drafting, and execution of relevant
agreements, disclosure documents and other instruments will require substantial
time, effort, and expense. The time periods of these subsequent steps cannot be
determined. If a specific business endeavor cannot be located the costs incurred
in the investigation are not likely to be recovered. The failure to consummate
an attempted transaction would likely result in the loss of the costs incurred.

Shareholders of the Company are relying totally upon the business judgment of
Management. Shareholders will not likely be consulted or provided any disclosure
documentation in connection with any acquisition engaged in by the Company,
unless required by state corporate law or the federal securities laws. Although
Management does not anticipate a sale of their personally owned Company shares
in connection with an acquisition, in the event Management does enter into an
agreement to do so, the remaining shareholders of the Company may not be
afforded an equal opportunity to do so. As Management intends to offer a
controlling interest in the Company, it is probable that a change of control
will occur as a result of an acquisition engaged in by the Company. There are no
lock-up agreements or understandings between the Company and its shareholders or
among the shareholders which has the effect of restricting the transferability
of any shareholders stock holdings. There are no arrangements, agreements, or
understandings between non-management shareholders and Management under which
non-management shareholders may directly or indirectly participate in or
influence the management of the Company's affairs, and there are no agreements
concerning the election of members of the Board of Directors.

It is not presently anticipated that the Company will acquire or merge with a
business or company in which the Company's promoters, Management or their
affiliates or associates directly or indirectly have an ownership interest,
however there is no agreement, policy, or understanding to prevent such a
transaction. In the event of such a non-arm's length transaction, Management
would seek an independent appraisal of the transaction. Notwithstanding the
foregoing, there is the potential that a conflict of interest will arise between
the Company and its Management in which case Management's fiduciary duties may
be compromised. Any remedy available under state corporate law would, in such an
event, most likely be prohibitively expensive and time consuming.

A number of states have enacted statutes, rules and regulations limiting the
sale of securities of blank check companies in their respective jurisdictions.
Some states prohibit the initial offer and sale as well as any subsequent resale
of securities of shell companies to residents of their states. In such an event,
the shareholders of the Company, as well as the shareholders of any target
company, may be limited in their ability to resell shares of the Company. To the
best knowledge of the Company, the following states may have such limitations
(this list is not exhaustive and a significant number of other states may also
have such limitations): Connecticut, Georgia, Oregon, Washington, and Florida.

COMPETITION

Inherent difficulties exist for any new company seeking to enter an established
field. The Company will remain an insignificant participant among the firms
which engage in mergers with and acquisitions of privately financed entities.

There are many established venture capital and financial concerns which have
significantly greater financial and personnel resources, technical expertise and
experience than the Company. The Company is also subject to competition from

                                       5
<PAGE>

numerous other recently formed public and private entities with business
objectives similar to those of the Company.

REGULATION

The Investment Company Act of 1940 (Investment Act) defines an investment
company as an issuer which is or holds itself out as being engaged primarily in
the business of investing, reinvesting or trading of securities. The Company
does not intend to engage primarily in the activities of purchasing, trading or
selling securities and intends to conduct its activities so as to avoid being
classified as an investment company under the Investment Act. The Company could
be expected to incur significant registration and compliance costs if required
under the Investment Act, and the regulations promulgated thereunder.

Section 3(a) of the Investment Act provides exclusions from its application for
companies which are not primarily engaged in the business of investing,
reinvesting or trading in investment securities. Management intends to implement
its business plan in a manner which will result in the availability of this
exception from the definition of investment company. Accordingly, Management
will continue to review the Company's activities from time to time with a view
toward reducing the likelihood that the Company could be classified as an
investment company.

The Company's plan of business may involve changes in its capital structure,
Management, control, and business, especially if it consummates its plan to
acquire or merge with another entity. Each of these areas are regulated by the
Investment Act, which regulations have the purported purpose of protecting
purchasers of investment company securities. Since the Company will not register
as an investment company, its shareholders will not be afforded these purported
protections.

Even if the Company restricts its activities as described above, it is possible
that it may be classified as an inadvertent investment company. This would be
most likely to occur if significant delays are experienced in locating a
business opportunity.

The Company intends to vigorously resist classification as an investment company
and to take advantage of any exemptions or exceptions from application of the
Investment Act, including an exception which allows an entity a one-time option
during any three (3) year period to claim an exemption as a transient investment
company. The necessity of asserting any such contention, or making any other
claim of exemption, could be time consuming, costly or even prohibitive, given
the Company's limited resources.

The Company intends to structure a merger or acquisition in such a manner as to
minimize Federal and state tax consequences to the Company and its shareholders,
and to any target company and its shareholders. Under Section 368 of the
Internal Revenue Code of 1986, as amended (the Code), a statutory merger or
consolidation is an exempt transaction and may be tax free to the companies and
their shareholders if effected in accordance with state law. A tax free
reorganization may require the Company to issue a substantial portion of its
securities in exchange for the securities or assets of a target firm.
Consequently, a tax free reorganization may result in substantial dilution of
the ownership interests of the present shareholders of the Company. Even if a
merger or consolidation is undertaken in accordance with the Code, there is no
assurance that tax regulations will not change and result in the Company or its
shareholders incurring a significant tax liability.

The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. The Securities and Exchange
Commission has adopted regulations that generally define a penny stock to be any
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions. Such exceptions include any equity security listed on Nasdaq
and any equity security issued by an issuer that has (i) net tangible assets of
at least $2,000,000, if such issuer has been in continuous operation for three
years, (ii) net tangible assets of at least $5,000,000, if such issuer has been
in continuous operation for less than three years, or (iii) average annual
revenue of at least $6,000,000, if such issuer has been in continuous operation
for less than three years. Unless an exception is available, the regulations

                                       6
<PAGE>

require the delivery, prior to any transaction involving a penny stock, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith.

EMPLOYEES

The Company presently has no employees other than its sole officer. The
Company's sole officer has employment and/or other business associations
elsewhere. The Company's sole officer has not allocated more than a minimal
amount of time to the affairs of the Company.

ITEM 2. DESCRIPTION OF PROPERTY

From its inception until September 2001, the Company maintained its offices
rent-free at the office of its President, M. Richard Cutler, 610 Newport Center
Drive, Suite 800, Newport Beach, CA 92660. As a result of the sale by Mr. Cutler
of his shares and his resignation as an officer and director and the appointment
of Mr. Richard Diamond as the Company's sole officer and director, the Company
moved its offices to Richard Diamond's office located at 1517 E. 7th Avenue,
Suite C, Tampa, Florida 33605. The Company maintains an office at this location
rent-free. Mr. Diamond has agreed that the Company may remain at this location
until consummation of a business combination. The Company will utilize a minimal
amount of space. There are no other preliminary agreements with respect to
future offices or facilities, however, following the consummation of an
acquisition, it is anticipated that the Company's offices will change to those
of the target company.

ITEM 3. LEGAL PROCEEDINGS

The Company may from time to time be involved in various claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of its business. The
Company is not currently involved in any such litigation which it believes could
have a materially adverse effect on its reported financial condition or results
of operations.

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

There were no matters submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 2001.

                                       7
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

MARKET INFORMATION

The Company's securities do not currently, and have not in the past, traded on
any active or liquid public market. Thus, there is currently no market for the
Company's securities and there can be no assurance that a trading market will
develop or, if one develops, that it will continue.

NUMBER OF SHAREHOLDERS

The number of beneficial holders of record of the Common Stock of the Company as
of the close of business on March 18, 2002 was ten.

RECENT SALES OF UNREGISTERED SECURITIES

On September 6, 2001, the Company authorized the issuance of debentures in the
total aggregate amount of $11,500. These debentures are 5% senior subordinated
convertible debentures due December 31, 2002 and are convertible into the
Company's Common Stock at $.001 per share. This offering was sold to 10
investors, each of whom represented to the Company that they were accredited
investors. These debentures were issued under the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended.

On October 10, 2001, the Company authorized the issuance of debentures in the
total aggregate amount of $500,000. These debentures are 8% subordinated
convertible debentures due June 30, 2003, and are convertible into the Company's
Common Stock at $.50 per share. The Company sold an aggregate of $62,000 of
these debentures to 20 investors, each of whom represented to the Company that
they were accredited investors. These debentures were issued under the exemption
from registration provided by Section 4(2) of the Securities Act of 1933, as
amended.

DIVIDEND POLICY

To date, the Company has declared no cash dividends on its Common Stock, and
does not expect to pay cash dividends in the near term. The Company intends to
retain future earnings, if any, to provide funds for operation of its business.

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

The following discussion contains certain forward-looking statements that are
subject to business and economic risks and uncertainties, and the Company's
actual results could differ materially from those forward-looking statements.
The following discussion regarding the financial statements of the Company
should be read in conjunction with the financial statements and notes thereto.

GENERAL OVERVIEW

The Company's activities since inception have been limited to organizational
matters, compliance efforts and locating potential merger candidates, and the
Company has not engaged in any operating activity since its inception.

                                       8
<PAGE>

The Company has registered its Common Stock on a Form 10-SB registration
statement filed pursuant to the Securities Exchange Act of 1934 (the Exchange
Act) and Rule 12(g) thereof. The Company files with the Securities and Exchange
Commission periodic reports under Rule 13(a) of the Exchange Act, including
quarterly reports on Form 10-QSB and annual reports on Form 10-KSB.

The Company was formed to engage in a merger with or acquisition of an
unidentified foreign or domestic private company which desires to become a
reporting (public) company whose securities are qualified for trading in the
United States secondary market. The Company meets the definition of a blank
check company contained in Section 7(b)(3) of the Securities Act of 1933, as
amended.

Management believes that there are perceived benefits to being a reporting
company with a class of publicly-traded securities which may be attractive to
foreign and domestic private companies.

These benefits are commonly thought to include (1) the ability to use registered
securities to make acquisition of assets or businesses; (2) increased visibility
in the financial community; (3) the facilitation of borrowing from financial
institutions; (4) improved trading efficiency; (5) shareholder liquidity; (6)
greater ease in subsequently raising capital; (7) compensation of key employees
through options for stock for which there is a public market; (8) enhanced
corporate image; and, (9) a presence in the United States capital market.

A private company which may be interested in a business combination with the
Company may include (1) a Company for which a primary purpose of becoming public
is the use of its securities for the acquisition of assets or businesses; (2) a
company which is unable to find an underwriter of its securities or is unable to
find an underwriter of securities on terms acceptable to it; (3) a company which
wishes to become public with less dilution of its Common Stock than would occur
normally upon an underwriting; (4) a company which believes that it will be able
to obtain investment capital on more favorable terms after it has become public;
(5) a foreign company which may wish an initial entry into the United States
securities market; (6) a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a qualified Employee
Stock Option Plan; and, (7) a company seeking one or more of the other benefits
believed to attach to a public company.

The Company is authorized to enter into a definitive agreement with a wide
variety of private businesses without limitation as to their industry or
revenues. It is not possible at this time to predict with which private company,
if any, the Company will enter into a definitive agreement or what will be the
industry, operating history, revenues, future prospects or other characteristics
of that company.

As of the date hereof, Management has not made any final decision concerning,
and has not entered into any agreements for, a business combination. When any
such agreement is reached or other material fact occurs, the Company will file
notice of such agreement or fact with the Securities and Exchange Commission on
Form 8-K. Persons reading this Form 10-KSB are advised to see if the Company has
subsequently filed a Form 8-K.

As soon as the Company is eligible, it intends to apply to have its Common Stock
listed or admitted to quotation on the NASD OTC Bulletin Board or, if it meets
the financial and other requirements thereof, on the Nasdaq Small Cap Market,
National Market System, or other regional or national exchange.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations through short-term credit facilities and
from the sale of convertible debentures. During September 2001 the Company sold
an aggregate of $11,500 of the Company's 5% senior subordinated convertible
debentures due December 31, 2002. The debentures are convertible into the
Company's Common Stock at $.001 per share.

                                       9
<PAGE>

On October 10, 2001, the Company authorized the issuance of 8% subordinated
convertible debentures due June 30, 2003 in the aggregate amount of $500,000.
These debentures are convertible into the Company's Common Stock at $.50 per
share. The Company sold an aggregate or $62,000 of these debentures and
terminated this offering.

At December 31, 2001 the Company had $13,296 in cash and total assets of
$16,387. As of that same date the Company had total current liabilities of
$12,700, and had working capital of $3,687.

As of December 31, 2001 the Company's total liabilities, including non-current
liabilities was $74,700 and the Company had a stockholder deficit of $58,313.

EXPENSES

The Company expended $54,188 in the twelve months ended December 31, 2001, net
of an extraordinary gain of $6,050.

INFLATION

Management believes that inflation has not had a material effect on the
Company's results of operations.

ITEM 7. FINANCIAL STATEMENTS

The financial statements and supplementary financial information which are
required to be filed under this item are presented under Item 13. Exhibits,
Financial Statement Schedules and Reports on Form 10-KSB in this document, and
are incorporated herein by reference.

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

There have been no disagreements between Haskell & White LLP, Certified Public
Accountants and Management of the type required to be reported under this Item 8
since the date of their engagement.

                                       10
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

The following table sets forth the names and ages of the current directors and
executive officers of the Company, the principal offices and positions with the
Company held by each person and the date such person became a director or
executive officer of the Company. The executive officers of the Company are
elected annually by the Board of Directors. The directors serve one year terms
until their successors are elected. The executive officers serve terms of one
year or until their death, resignation or removal by the Board of Directors.
There are no family relationships between any of the directors and executive
officers. In addition, there was no arrangement or understanding between any
executive officer and any other person pursuant to which any person was selected
as an executive officer.

The directors and executive officers of the Company as of March 18, 2002, are as
follows:


         Name                  Age    Position(s)
         -----                 ---    -----------
         Richard J. Diamond    39     President, Treasurer, Secretary, Director

Mr. Diamond was elected to the Board of Directors and as President, Secretary
and Treasurer of Conus Holdings, Inc. ("Conus") on August 17, 2001. From May,
2001 until present Mr. Diamond serves as Vice President of Apogee Business
Consultants, LLC, a Nevada limited liability corporation of which he is a part
owner. From 1996 and presently, Mr. Diamond also provides independent financial
consulting for public and private companies. From January 1995 until February
2000 Mr. Diamond served as a director and President of Treasure Rockhound
Ranches, Inc., a membership sales organization. From January 1995 until November
1996 Mr. Diamond served as Vice President and subsequently as President of
Technology Holdings, Inc., a Florida based holding company. From May 1991 to
January 1995, Mr. Diamond served as Vice President of Lintronics Technologies,
Inc., an R&D company specializing in medical devices. Mr. Diamond earned a BS
Degree from Florida Southern College, with a BS Degree in Financial Management.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than ten
percent shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file. To the Company's knowledge, during
the year ended December 31, 2001, all Section 16(a) filing requirements
applicable to the Company's officers, directors and greater than ten percent
shareholders were complied with.

ITEM 10. EXECUTIVE COMPENSATION

The Company does not have employment contracts with any of its Management
personnel.

SUMMARY COMPENSATION TABLE

The Summary Compensation Table shows certain compensation information for
services rendered in all capacities for the three fiscal years ended December
31, 2001. Other than as set forth herein, no executive officer's salary and
bonus exceeded $100,000 in any of the applicable years. The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.

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<PAGE>
<TABLE>
<CAPTION>
                                                        SUMMARY COMPENSATION TABLE

                                                              Other
                          Year                                Annual      Restricted                            All Other
Name and Principal        Ended                               Compen-       Stock      Options/      LTIP        Compen
Position                  Dec. 30    Salary       Bonus       sation        Awards       SARs       Payouts       sation
------------------        -------    ------       -----       ------      -----------  --------     -------     ----------
<S>                       <C>        <C>           <C>        <C>          <C>           <C>        <C>          <C>
M. Richard Cutler,        2001         -0-           -0-        -0-          -0-           -0-        -0-          -0-
President, Treasurer      2000         -0-           -0-        -0-          -0-           -0-        -0-          -0-
and Secretary (1)         1999         -0-           -0-        -0-          -0-           -0-        -0-          -0-

Richard J. Diamond,       2001          0-           -0-        -0-          -0-           -0-        -0-          -0-
President, Treasurer      2000         -0-           -0-        -0-          -0-           -0-        -0-          -0-
and Secretary (2)         1999         -0-           -0-        -0-          -0-           -0-        -0-          -0-
-----------
(1)   Appointed April 9, 1998, resigned August 17, 2001.
(2)   Appointed August 17, 2001.

<CAPTION>
                                                    OPTION/SAR GRANTS IN LAST FISCAL YEAR
                                                              (INDIVIDUAL GRANTS)

                          Number of Securities       Percent of Total
                               Underlying             Options/SAR's
                             Options/SAR's         Granted to Employees        Exercise of
Name                          Granted (#)             in Fiscal Year       Base Price ($ / SH)    Expiration Date
----                          -----------             --------------       -------------------    ---------------
<S>                              <C>                     <C>                     <C>                  <C>
M. Richard Cutler                 None                     N/A                     N/A                  N/A

Richard J. Diamond                None                     N/A                     N/A                  N/A

<CAPTION>
                                             AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                                          AND FY-END OPTION/SAR VALUES


                            Shares                                                           Value of Unexercised
                          Acquired on       Value       Number of Unexercised Options        In-the-Money Options
Name                       Exercise       Realized      Excercisable / Unexercisable     Exercisable / Unexercisable
----                      -----------     --------      ----------------------------     ---------------------------
<S>                         <C>             <C>                    <C>                              <C>
M. Richard Cutler             N/A            N/A                    None                             N/A

Richard J Diamond             N/A            N/A                    None                             N/A
</TABLE>

COMPENSATION OF DIRECTORS

Directors were not separately compensated for their services in the year ended
December 31, 2001.

                                       12
<PAGE>

CONSULTING AGREEMENTS

On September 1, 2001, we entered into a consulting agreement with Peerless
Consultants, Inc. (the "Consultant"), a corporation partially owned by D. Jerry
Diamond, the father of Richard J. Diamond, our sole officer and director.
According to the agreement, the Consultant will provide the Company with the
following services:

         -        review and prepare documentation regarding actions taken by
                  the board of directors

         -        review and prepare documentation relative to shareholder
                  matters

         -        assist the Company and its counsel in preparation of filings
                  made to the Securities and Exchange Commission

         -        assist the Company and its counsel in the preparation of
                  documents relative to acquisitions

         -        review and advise the Company on Press Releases

         -        prepare and file documents necessary for the Company to change
                  its corporate charter

In addition, at the Company's request, the Consultant shall also seek out, meet
with and negotiate with companies and other entities to be considered for
mergers with, or acquisition by, the Company.

The term of the agreement was six months commencing on September 1, 2001 and
ending on February 28, 2002 at a fee of $7,500 per month. The Company paid the
Consultant an aggregate of $30,000 through December 31, 2001.

In addition, the Company's sole officer and director was paid an aggregate of
$15,000 as consulting fees through December 31, 2001.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 18, 2002, certain information with
respect to the Company's equity securities owned of record or beneficially by
(i) each Officer and Director of the Company; (ii) each person who owns
beneficially more than 5% of each class of the Company's outstanding equity
securities; and (iii) all Directors and Executive Officers as a group.
<TABLE>
<CAPTION>
                                                                          Amount and Nature of         Percent of
  Title Class         Name and Address of Beneficial Owner                 Beneficial Ownership    Outstanding (2)
  -----------         ------------------------------------                 --------------------    ---------------
<S>                   <C>                                                        <C>                    <C>
  Common Stock        Richard J. Diamond                                          180,000                18.0%
                      4590 44th Street South
                      St. Petersburg, FL  33711

  Common Stock        BKR Investments, Inc. (1)                                   600,000                60.0%
                      21 9th Street South
                      St. Petersburg, FL  33705

  Common Stock        D. Jerry Diamond                                             97,000                 9.7%
                      1517 E. 17th Street, Suite F
                      Tampa, FL  33605

  Common Stock        Terry M. Haynes                                              97,000                 9.7%
                      3414 W. Lykes
                      Tampa, FL

  Common Stock        All Directors and Officers as a Group (1 person)            180,000                18.0%
------------
</TABLE>
(1)   Brendon K. Rennert is the sole shareholder of BKR Investments, Inc.
(2)   There were 1,000,000 shares of Common Stock outstanding as of
      March 18, 2002

                                       13
<PAGE>

The Company believes that the beneficial owners of securities listed above,
based on information furnished by such owners, have sole investment and voting
power with respect to such shares, subject to community property laws where
applicable. Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of stock subject to options
or warrants currently exercisable, or exercisable within 60 days, are deemed
outstanding for purposes of computing the percentage of the person holding such
options or warrants, but are not deemed outstanding for purposes of computing
the percentage of any other person.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On September 1, 2001 we entered into a consulting agreement with Peerless
Consultants, Inc., a corporation owned by D. Jerry Diamond, the father of
Richard J. Diamond, our sole officer and director. The term of the agreement was
six months commencing on September 1, 2001 and ending February 28, 2002 at a fee
of $7,500 per month. The Company paid Peerless an aggregate of $30,000 through
December 31, 2001.

Separately, Richard J. Diamond, our sole officer and director was paid an
aggregate of $15,000 as consulting fees through December 31, 2001.

Aside from the transactions discussed above, the Company will not enter into any
transactions with any officer, director or controlling shareholder of the
Company until such time, if ever, as the Company acquires an operating business.
At such time, it is expected that the Company will experience a change in
control, including a complete change in the Board of Directors and Management of
the Company.

Certain conflicts of interest now exist and will continue to exist between the
Company and its officers and directors due to the fact that each has other
business interests to which he devotes his primary attention. Each officer and
director may continue to do so notwithstanding the fact that Management time
should be devoted to the business of the Company. Each of the Company's officers
and directors are or may become involved in other personal and business
ventures.

The officers, directors and founders are and may become, in their individual
capacities, controlling shareholders and/or partners of other entities engaged
in a variety of businesses. Thus, there exists potential for conflicts of
interest, including, among other things, time, effort, and corporate
opportunity, involved in anticipation with such other business entities and
transactions. Conflicts may arise if a target company or its principals seek to
acquire some or all of the stock holdings of present Management.

If a prospective business combination candidate required the sale of some or all
of the shareholdings of the officers and directors, the officers and directors
would be free to negotiate and affect such sales. Consequently, the Company's
Management would receive pecuniary gain which may not be available to other
shareholders.

The Company has no specified procedure for the resolution of current or
potential conflicts of interest between the Company, its officers, and directors
or affiliated entities. Shareholders who believe that the Company has been
harmed by failure of an officer or director to appropriately resolve any
conflict of interest may be able to bring a suit to enforce their rights or the
Company's rights.

Management may be issued additional securities of the Company at the discretion
of the Board of Directors in accordance with their fiduciary obligations under
state corporate law.

                                       14
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         INDEX  TO  CONSOLIDATED FINANCIAL  STATEMENTS                   Page
                                                                         ----

         Independent Auditors' Report . . . . . . . . . . . . . . . . .  F-1

         Consolidated Balance sheet as of December 31, 2001 . . . . . .  F-2

         Consolidated Statements of Operations . . .  . . . . . . . . .  F-3

         Consolidated Statements of Stockholders' Equity (Deficit). . .  F-4

         Consolidated Statements of Cash Flows. . . .  .. . . . . . .  . F-5

         Notes to Consolidated Financial Statements . . . . . .  . . . . F-6

All other schedules are omitted as the required information is not present or is
not present in amounts sufficient to require submission of the schedule, or
because the information required is included in the financial statements or
notes thereto.

INDEX TO EXHIBITS

The Company undertakes to furnish to any shareholder so requesting a copy of any
of the following exhibits upon payment to the Company of the reasonable costs
incurred by the Company in furnishing any such exhibit.

     EXHIBIT NO.      DESCRIPTION

         3.1*         Articles of Incorporation of the Company;

         3.2*         Bylaws of the Company;

         4.1          Form of 5% Senior Subordinated Convertible Debenture
                      due December 31, 2002;

         4.2          Form of 8% Subordinated Convertible Debenture due
                      June 30, 2003.

        10.1          Consulting Agreement dated September 1, 2001 between
                      the Company and Peerless Consultants, Inc.

        21            Subsidiaries:
                      Conus Computers, Inc. - Florida (wholly owned)
                      Conus Marketing, Inc. - Florida (wholly owned)

* Previously filed

                                       15
<PAGE>

REPORTS ON FORM 8-K

1.       A Current Report on Form 8-K was filed on August 20, 2001 to report the
         change of control of the Company.

2.       A Current Report on Form 8-K was filed on September 26, 2001 to report
         the formation of a wholly-owned subsidiary.

                                       16
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated: April 11, 2002
                                         CONUS HOLDINGS, INC.



                                         By:  /s/ Richard J. Diamond
                                             -----------------------------------
                                             Richard J. Diamond
                                             President, Secretary and Treasurer



Pursuant to requirements of 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:

Signature                                Capacity                    Date
---------                                --------                    ----


/s/  Richard J. Diamond                  Director               April 11, 2002
--------------------------
 Richard J. Diamond

                                       17
<PAGE>

                                       Audited Consolidated Financial Statements




                                                            CONUS HOLDINGS, INC.
                                                (A Development Stage Enterprise)




                                                        As of December 31, 2001,
                                 and the years ended December 31, 2001 and 2000,
                                                  and the Period From Inception,
                                        April 9, 1998, through December 31, 2001



                                        i
<PAGE>

                              CONUS HOLDINGS, INC.
                        (A Development Stage Enterprise)

                                Table Of Contents


                                                                        Page

Independent Auditors' Report                                             F-1

Financial Statements

       Consolidated Balance Sheet                                        F-2

       Consolidated Statements of Operations                             F-3

       Consolidated Statements of Stockholders' Equity (Deficit)         F-4

       Consolidated Statements of Cash Flows                             F-5

       Notes to Consolidated Financial Statements                        F-6

                                       ii
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Director
Conus Holdings, Inc.

We have audited the accompanying  consolidated  balance sheet of Conus Holdings,
Inc. (a Development  Stage  Enterprise) (the "Company") as of December 31, 2001,
and the related  consolidated  statements of  operations,  stockholders'  equity
(deficit) and cash flows for the years ended December 31, 2001 and 2000, and the
period from inception, April 9, 1998, through December 31, 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  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
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of the Company as of
December 31, 2001, and the  consolidated  results of its operations and its cash
flows for the years  ended  December  31,  2001 and 2000,  and the  period  from
inception,  April 9,  1998,  through  December  31,  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
consolidated  financial  statements,  the Company has no operations  and limited
financial and other resources.  Such matters raise  substantial  doubt about the
Company's ability to continue as a going concern.  Management's  plans regarding
those  matters  are  also  described  in  Note  1.  The  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.



                                                             HASKELL & WHITE LLP

April 2, 2002

                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                                      CONUS HOLDINGS, INC.
                                (A Development Stage Enterprise)


                                   Consolidated Balance Sheet
                                    As of December 31, 2001


                                             ASSETS
<S>                                                                                               <C>
Cash                                                                                              $          13,296
Other current assets                                                                                          3,091
                                                                                                  -----------------
           Total assets                                                                           $          16,387
                                                                                                  =================

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Accrued expenses                                                                                  $           1,200
Convertible notes payable (Note 3)                                                                           11,500
                                                                                                  -----------------

           Total current liabilities                                                                         12,700
                                                                                                  -----------------

Convertible notes payable (Note 3)                                                                           62,000
                                                                                                  -----------------

           Total non-current liabilities                                                                     62,000
                                                                                                  -----------------

           Total liabilities                                                                                 74,700
                                                                                                  -----------------

Commitments (Note 4)

Stockholders' equity (deficit)
   Preferred stock, $0.001 par value; 2,000,000 shares authorized; no
      shares issued and outstanding                                                                               -
   Common stock, $0.001 par value; 20,000,000 shares authorized;
      1,000,000 shares issued and outstanding                                                                 1,000
   Deficit accumulated during the development stage                                                         (59,313)
                                                                                                  ------------------

           Total stockholders' equity (deficit)                                                             (58,313)
                                                                                                  -----------------

           Total liabilities and stockholders' equity (deficit)                                   $          16,387
                                                                                                  =================

                                    See accompanying notes to financial statements.

                                                          F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      CONUS HOLDINGS, INC.
                                (A Development Stage Enterprise)

                              Consolidated Statements of Operations


                                                                                                    Period From
                                                                                                     Inception,
                                                               Year                Year            April 9, 1998,
                                                               Ended              Ended               Through
                                                            December 31,       December 31,         December 31,
                                                               2001                2000                 2001
                                                          ---------------    ----------------    ------------------
<S>                                                      <C>                 <C>                 <C>
Consulting fees (Note 4)                                 $        (45,000)   $              -    $          (45,000)

General and administrative expenses                               (15,238)             (3,605)              (20,363)
                                                          ----------------   -----------------    ------------------
Loss before extraordinary item                                    (60,238)             (3,605)              (65,363)

Extraordinary item:
Gain on forgiveness of related party payable
   (Note 2)                                                         6,050                   -                 6,050
                                                          ---------------    ----------------     -----------------

Net loss                                                  $       (54,188)   $         (3,605)    $         (59,313)

Weighted average number of common shares
  outstanding                                                   1,000,000           1,000,000             1,000,000
                                                          ===============    ================     =================

Net loss per share                                        $         (0.06)   $          (0.01)    $           (0.06)
                                                          ===============    ================     =================


                                See accompanying notes to financial statements.

                                                       F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                CONUS HOLDINGS, INC.
                                          (A Development Stage Enterprise)

                            Consolidated Statements of Stockholders' Equity (Deficit)
                     For the Period from Inception, April 9, 1998 through December 31, 2001


                                                                                           Deficit
                                                                                         Accumulated
                                                                                         During the
                                                                 Common Stock            Development
                                                            Shares         Amount           Stage          Total
                                                          -----------    -----------    -----------     ----------
<S>                                                         <C>          <C>            <C>             <C>
Balances, April 9, 1998                                             -    $         -    $         -     $        -

Issuance of common stock
  for services                                              1,000,000          1,000              -          1,000

Net loss for the period from
  inception, April 9, 1998,
  through December 31, 1998                                         -              -         (1,385)        (1,385)
                                                          -----------    -----------    ------------    ----------

Balances, December 31, 1998                                 1,000,000          1,000         (1,385)          (385)

Net loss for the year ended
  December 31, 1999                                                 -              -           (135)          (135)
                                                          -----------    -----------    -----------     ----------

Balances, December 31, 1999                                 1,000,000          1,000         (1,520)          (520)

Net loss for the year ended
  December 31, 2000                                                 -              -         (3,605)        (3,605)
                                                          -----------    -----------    ------------    -----------

Balances, December 31, 2000                                 1,000,000          1,000         (5,125)        (4,125)

Net loss for the year ended
  December 31, 2001                                                 -              -        (54,188)       (54,188)
                                                          -----------    -----------    ------------    -----------

Balances, December 31, 2001                                 1,000,000    $     1,000    $   (59,313)    $  (58,313)
                                                          ===========    ===========    ============    ===========

                                See accompanying notes to financial statements.

                                                       F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              CONUS HOLDINGS, INC.
                                        (A Development Stage Enterprise)

                                      Consolidated Statements of Cash Flows

                                                                                                    Period From
                                                                                                     Inception,
                                                               Year                Year            April 9, 1998,
                                                               Ended               Ended               Through
                                                            December 31,       December 31,         December 31,
                                                                2001               2000                 2001
                                                          ---------------    ----------------    ------------------
<S>                                                       <C>                <C>                  <C>
Cash flows from operating activities
   Net loss                                               $       (54,188)   $         (3,605)    $         (59,313)
   Adjustments to reconcile net loss to net cash
      used by operating activities
        Issuance of common stock for services                           -                   -                 1,000
        Increase in other current assets                           (3,091)                  -                (3,091)
        Increase in accrued expenses                                1,200                   -                 1,200
        (Decrease) increase in payable to related
           party                                                   (4,125)              3,605                     -
                                                          ----------------   ----------------     -----------------

               Net cash used by operating
                 activities                                       (60,204)                  -               (60,204)
                                                          ----------------   ----------------     ------------------

Cash flows from financing activities
   Proceeds from convertible notes payable                         73,500                   -                73,500
                                                          ---------------    ----------------     -----------------

               Net cash provided by financing
                 activities                                        73,500                   -                73,500
                                                          ---------------    ----------------     -----------------

Net increase in cash                                               13,296                   -                13,296
                                                          ---------------    ----------------     -----------------

Cash, beginning of period                                               -                   -                     -
                                                          ---------------    ----------------     -----------------

Cash, end of period                                       $        13,296    $              -     $          13,296
                                                          ===============    ================     =================

Supplemental disclosure of cash flow information:

   Cash paid during the year for:

      Interest                                            $             -    $              -     $               -
                                                          ===============    ================     =================

      Income taxes                                        $             -    $              -     $               -
                                                          ===============    ================     =================


                                   See accompanying notes to financial statements.

                                                          F-5
</TABLE>
<PAGE>

                              CONUS HOLDINGS, INC.
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements

               For the Years ended December 31, 2001 and 2000, and
     for the Period from Inception, April 9, 1998, through December 31, 2001


1.       Basis of Presentation, Capital Structure, and Significant Accounting
         Policies

         Basis of Presentation

         Conus Holdings,  Inc. (A Development  Stage Enterprise) (the "Company")
         was  incorporated  on  April 9,  1998  under  the laws of the  State of
         Nevada. The Company intends to develop operating  opportunities through
         business  combinations  or  mergers.  To  date,  the  Company  has  not
         conducted any significant  operations,  and its activities have focused
         primarily on organizational  efforts,  corporate compliance matters and
         locating  potential  merger  candidates.  Since the Company has not yet
         commenced any principal operations,  and has not yet earned significant
         revenues,   the  Company  is  considered  to  be  a  development  stage
         enterprise as of December 31, 2001.

         Conus  Marketing,  Inc.  was  incorporated  in the State of  Florida on
         September  7, 2001 as a wholly  owned  subsidiary  of the  Company.  In
         addition,  Conus  Computers,  Inc.  was  incorporated  in the  State of
         Florida  on  September  14,  2001 as a  wholly  owned  subsidiary.  The
         subsidiaries  were formed with the  objective of marketing  and selling
         various  products   through   telemarketing,   direct  mail,   coupons,
         infomercials,  and  the  Internet.  Conus  Marketing,  Inc.  and  Conus
         Computers,  Inc.  have  conducted  no  operations  to date,  and are in
         substance shell companies.

         The accompanying consolidated financial statements include the accounts
         of the Company and its two wholly owned  subsidiaries  from the date of
         their formation.

         Capital Structure

         On April 10,  1998,  the  Company's  Board of  Directors  approved  the
         issuance of 1,000,000 shares of common stock to the Company's  founders
         for services which were valued at a nominal amount  approximating  fair
         value ($1,000  recorded as general and  administrative  expenses in the
         accompanying statement of operations).  Of these shares, 824,500 shares
         were issued to two  officers  of the  Company,  and as of December  31,
         2000,  such  shares  were owned by one  officer.  In August  2001,  the
         Company's then majority  stockholder and sole officer and director sold
         600,000 shares of the Company's common stock to BKR  Investments,  Inc.
         Such transaction resulted in a change in control of the Company.

                                      F-6
<PAGE>

                              CONUS HOLDINGS, INC.
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements

               For the Years ended December 31, 2001 and 2000, and
     for the Period from Inception, April 9, 1998, through December 31, 2001


1.       Basis of Presentation, Capital Structure, and Significant Accounting
         Policies (continued)

         Going Concern and Management's Plans

         The Company has not commenced  significant  operations  and has limited
         financial and other  resources.  Such matters raise  substantial  doubt
         about  the   Company's   ability  to  continue  as  a  going   concern.
         Management's  plans with respect to these  conditions are to search for
         additional  sources of debt and/or  equity  financing and new operating
         opportunities through business combinations or mergers. In the interim,
         the Company will require minimal overhead,  and key  administrative and
         management  functions will be provided by consultants and stockholders.
         Accordingly,  the accompanying financial statements have been presented
         under the assumption that the Company will continue as a going concern.

         Management Estimates

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

         Cash and Cash Equivalents

         The Company considers all highly liquid  investments with a maturity of
         three months or less, when acquired, to be cash equivalents.

         Income Taxes

         The Company uses the liability  method of accounting  for income taxes.
         Accordingly,  deferred tax liabilities and assets are determined  based
         on the  difference  between the  financial  statement  and tax bases of
         assets and liabilities,  using enacted tax rates in effect for the year
         in which the differences are expected to reverse.  Current income taxes
         are based on the year's taxable income for federal and state income tax
         reporting purposes.

                                      F-7
<PAGE>

                              CONUS HOLDINGS, INC.
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements

               For the Years ended December 31, 2001 and 2000, and
     for the Period from Inception, April 9, 1998, through December 31, 2001


1.       Basis of Presentation, Capital Structure, and Significant Accounting
         Policies (continued)

         Income Taxes (continued)

         The  Company's  net deferred tax asset at December 31, 2001 consists of
         net operating  losses of approximately  $65,000.  At December 31, 2001,
         the Company  provided a 100% valuation  allowance for the aggregate tax
         effect of these net operating  losses totaling  approximately  $26,000.
         Federal net  operating  losses can be carried back for five years,  and
         remaining,  unused  carrybacks can be carried forward until 2018. State
         net  operating  losses  begin to expire in 2008.  No benefit for income
         taxes has been  provided in the  accompanying  statements of operations
         since all deferred tax assets have been fully reserved. The Company has
         provided the valuation  allowance since  management could not determine
         that it was "more  likely than not" that the  benefits of the  deferred
         tax assets would be realized.

         As a  result  of the  changes  in  stock  ownership  during  2001,  the
         Company's use of its net operating loss  carryforwards  will be limited
         by Section 382 of the Internal Revenue Code.

         Recent Accounting Statements

         In June 2001, the Financial  Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
         Combinations."  SFAS No. 141  addresses  the  initial  recognition  and
         measurement  of  goodwill  and other  intangible  assets  acquired in a
         business  combination.  SFAS No. 141  requires  the use of the purchase
         method of accounting to business  combinations  beginning July 1, 2001.
         The adoption of this statement  will have no significant  impact on the
         Company's consolidated financial position or results of operations.

                                      F-8
<PAGE>

                              CONUS HOLDINGS, INC.
                        (A Development Stage Enterprise)

                   Notes to Consolidated Financial Statements

               For the Years ended December 31, 2001 and 2000, and
     for the Period from Inception, April 9, 1998, through December 31, 2001


1.       Basis of Presentation, Capital Structure, and Significant Accounting
         Policies (continued)

         Recent Accounting Statements (continued)

         In June  2001,  the FASB  issued  SFAS No.  142,  "Goodwill  and  Other
         Intangible   Assets."  SFAS  No.  142  addresses  the  recognition  and
         measurement of goodwill and other intangible assets subsequent to their
         acquisition.  It also addresses the initial recognition and measurement
         of  intangible  assets  acquired  outside  of a  business  combination,
         whether  acquired  individually  or with a group of other assets.  This
         statement  provides that intangible  assets with finite useful lives be
         amortized and that intangible assets with indefinite lives and goodwill
         not  be  amortized,   but  rather  be  tested  at  least  annually  for
         impairment.  SFAS No. 142 will be effective  for the  Company's  fiscal
         year 2002.  The  adoption of this  statement  will have no  significant
         impact on the Company's  consolidated  financial position or results of
         operations.

2.       Extraordinary Item

         As described in Note 1, the Company's  former majority  shareholder and
         sole officer and director sold 600,000  shares of the Company's  common
         stock in August 2001. In connection with that  transaction,  the former
         majority  shareholder and sole officer and director forgave $6,050 that
         was owed by the Company to an entity controlled by this individual. The
         gain on debt forgiveness has been presented as an extraordinary item in
         the accompanying statements of operations.

3.       Convertible Notes Payable

         In September 2001, the Company issued  convertible notes payable in the
         aggregate amount of $11,500. The related notes payable bear interest at
         5% per annum and interest is payable  December 31, 2001,  and quarterly
         thereafter.  The notes  payable are due on December 31,  2002,  and are
         convertible into shares of the Company's stock at $0.001 per share.

         In October 2001,  the Company issued  convertible  notes payable in the
         aggregate amount of $62,000. The related notes payable bear interest at
         8% per  annum and  interest  is  payable  on  December  31,  2001,  and
         quarterly  thereafter.  The notes payable are due on June 30, 2003, and
         are convertible into shares of the Company's stock at $0.50 per share.

4.       Related Party Transactions

         The Company had a six-month  consulting  agreement with an entity owned
         by the father of the  Company's  sole officer and director that expired
         in February 2002.  During the year ended December 31, 2001, the Company
         paid and expensed  $30,000 related to this  arrangement.  The father of
         the  Company's  sole  officer and  director  owns 97,000  shares of the
         Company's common stock as of December 31, 2001.

         During the year ended  December 31, 2001, the Company paid and expensed
         $15,000  of  consulting  fees to its sole  officer  and  director.  The
         Company's  sole  officer  and  director  owns  180,000  shares  of  the
         Company's common stock as of December 31, 2001.

                                      F-9