SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TEL-ONE, INC.
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 4813 59-3680738
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer)
Classification Code Number) Identification No.)
5414 WEST CRENSHAW STREET
TAMPA, FLORIDA 33634
TELEPHONE: (813) 781-1921 - FAX: (813) 243-4203
(Address and Telephone Number of Principal Executive Offices)
W. KRIS BROWN
CHIEF EXECUTIVE OFFICER AND
CHIEF OPERATING OFFICER
(Principal Executive Officer)
COPIES TO:
GLENN EVAN GOLDBERG, ESQUIRE
GOLDBERG LAW GROUP, P. A.
100 SOUTH ASHLEY DRIVE
TAMPA, FLORIDA 33602
TELEPHONE: (813) 223-4440 FAX: (813) 223-6226
(Name, Address and Telephone Number of Agent for Service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement, as determined
(by market conditions and other factors. If the only securities being registered
on this Form are being offered pursuant to dividend or interest reinvestment
plans, check the following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Unit Maximum Maximum Amount of
Title of each class of securities Amount to be offering price Aggregate Offering Registration
to be registered registered per Unit (1) Price Fee
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<S> <C> <C> <C> <C>
Common Stock, par value $0.0001 per share 4,000,000 $ 2.00 $ 8,000,000 $ 2,000
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<FN>
(1) Estimated for the sole purpose of computing the registration fee pursuant to Rule 457(o) under the
Securities Act of 1933.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its Effective Date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement will thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
INSIDE FRONT COVER
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. All statements
regarding
o future events,
o our financial performance and operating results,
o our business strategy and
o our financing plans
are forward-looking statements. In some cases you can identify forward-looking
statements by terminology, such as "may," "will," "would," "should," "could,"
"expect," "intend," "plan," "anticipate," "believe," "estimate," "predict,"
"potential" or "continue," the negative of such terms or other comparable
terminology. These statements are only predictions. Known and unknown risks,
uncertainties and other factors could cause actual results to differ materially
from those contemplated by the statements. In evaluating these statements, you
should specifically consider various factors, including the risks described in
the "Risk Factors" section and elsewhere in this prospectus. These factors may
cause our actual results to differ materially from any forward-looking
statements.
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PROSPECTUS
TEL-ONE, INC.
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4,000,000 SHARES OF COMMON STOCK,
OFFERING PRICE: $2.00 PER SHARE
THIS PROSPECTUS relates to 4,000,000 shares of common stock, $.0001 par value of
Tel-One, Inc., a development stage, Florida Corporation. Of this amount
1,000,000 shares are being offered by Tel-One and 3,000,000 shares are being
offered by selling shareholders. The selling shareholders have agreed with
Tel-One not sell any of their shares prior to the sale of all shares being
offered by Tel-One.
Prior to this offering there has been no public market for Tel-One's common
stock and there is no assurance that such a public market will develop or
continue after the completion of this offering. The initial public offering
prices of the shares will be determined solely by Tel-One and bears no relation
to Tel-One's earnings, assets, book value, net worth, or any other recognized
criteria of value. Application will be made for quotation of Tel-One's common
stock on the Over The Counter Bulletin Board ("OTCBB").
The shares will be offered on a "best efforts" basis by Tel-One through its
officers and directors. There is no minimum amount of shares that must be sold,
and offering proceeds will not be placed in any escrow account. This means that
Tel-One will have the ability to use the offering proceeds as they are received,
regardless of how many shares are sold. The offering will continue for 180 days
following the date of this Prospectus.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN FACTORS TO BE
CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Total
Total Proceeds to the
Underwriting Proceeds to Selling
Price to Public Discounts Tel-One Shareholder
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Per Share $ 2.00 $ -0- $2,000,000 $ 6,000,000
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THE DATE OF THIS PROSPECTUS IS DECEMBER 26, 2000
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TABLE OF CONTENTS
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SECTION PAGE NUMBER
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GENERAL INFORMATION 5
PROSPECTUS SUMMARY 6
Tel-One, Inc. 6
The Offering 7
RISK FACTORS 8
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No Operating History 8
Competition 8
Dependence on Key Personnel; Need for Additional Executive Officers 9
Continued Control By Management 9
Shares Eligible for Future Sale 9
Dilution 10
Additional Financing 10
Absence of Dividends 10
Forward Looking Statements 10
Offering Price Arbitrarily Determined 10
Absence of Public Market; Determination of Offering Price; Volatility 11
Penny Stock Regulation 11
USE OF PROCEEDS 12
DETERMINATION OF OFFERING PRICE 13
DIVIDEND POLICY 13
DILUTION 13
CAPITALIZATION 14
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION 15
BUSINESS 16
Tel-One, Inc. 16
Growth Strategies for Expansion 16
Services 17
Industry Overview 17
Florida Centrex Contract 18
Telemedicine and Distance Education 18
Voice over Internet Protocol 19
The Telephony Project Management Industry 20
Growth Strategy 20
Industry Overview: Video Conferencing 20
Marketing Strategy 21
Industry Competition 21
Employees 22
MANAGEMENT 23
Directors and Executive Officers 23
Executive Compensation 24
Director Compensation 24
Limitations on Personal Liability of Directors and Officers 24
PRINCIPAL SHAREHOLDERS 25
SELLING SHAREHOLDERS 26
DESCRIPTION OF SECURITIES 26
Common Stock 26
SHARES ELIGIBLE FOR FUTURE SALE 26
TRANSFER AND WARRANT AGENT 27
LEGAL MATTERS 27
EXPERTS 27
ADDITIONAL INFORMATION 28
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GENERAL INFORMATION
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY TEL-ONE, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF
THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION SET FORTH HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF THE SHARES AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE AFFECTED ON THE OVER-THE-COUNTER ELECTRONIC BULLETIN BOARD OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
As of the date of this Prospectus, Tel-One will become subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in connection therewith will file all reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Tel-One intends to furnish its shareholders with annual reports
containing audited financial statements after the end of each fiscal year, and
make available such other periodic reports as the Tel-One may deem to be
appropriate or as may be required by law. Tel-One's fiscal year ends on December
31 of each year.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information, including the financial
statements and notes thereto, appearing elsewhere in this Prospectus. Each
prospective investor is therefore urged to read this Prospectus in its entirety.
Unless the context otherwise requires, the term "Tel-One" refers to Tel-One,
Inc., a Florida corporation. This Prospectus contains forward-looking statements
that involve risks and uncertainties. Tel-One's actual results could differ
materially from those anticipated in these forward looking statements as a
result of certain factors discussed in "Risk Factors."
TEL-ONE, INC.
Tel-One, Inc. is headquartered in Tampa, Florida and was formed for the purpose
of providing advanced telephony application products and services to Fortune
2000 companies including State and Federal Governments.
Overall, Tel-One, Inc. can be characterized as a Telephony Project Management
Services company that provides expertise on advanced telephony projects and
schedules used by Fortune 2000 companies and government institutions via
outsource agreements and government long-term contracts. Additionally, Tel-One
will place an emphasis on the emerging Telephony Voice over Internet Protocol
technologies, as well as, direct it's sales and marketing efforts to the
specialized application areas of Video Conferencing Tele-Medicine and Distance
Education.
Tel-One has recently purchased the contract receivables, net of cost, derived
from the fulfillment of services and product delivery required by the contract
requirements to the State of Florida Government Centrex Contract. The
anticipated receivables to be realized by Tel-One, for the remaining term of the
contract years 2001and 2002, should produce an estimated amount of cash flow of
approximately $191,003 and $210,103 respectively, or an expected aggregate of
$401,106 for the remaining two (2) years.
Tel-One was incorporated in Florida in November 2000 and maintains its executive
offices at 5414 West Crenshaw Street, Tampa Florida 33634. Tel-One's telephone
number is (813) 781-1921.
Tel-One believes that Voice over Internet Protocol technologies and
videoconference services will become two of the fastest growing areas of the
telecommunications industry. Despite its early promise, videoconference services
has lagged major telecom products such as fax and cellular telephone service,
largely because of:
o the cost of equipment;
o the absence of a unified integrated services digital network ("ISDN")
which is one form of digital network connectivity available in the marketplace
from public switched telephone network providers for high speed digital transfer
of data and voice; and
o the availability of adequate origination and termination points.
According to the Gartner Group, a respected telecommunications research
company, the videoconferencing market is growing at 48 percent a year from a
base of 1.1 billion dollars in 1995. Another industry research company, Forward
Concepts, projects a 40% annualized growth rate from over $1 billion in 1996 to
over $5 billion by 2001. International Data Corporation, a market research and
information provider that concentrates on the high technology field of business
sees the business market for videoconferencing systems climbing to 600,000
systems in 2001. In contrast, they see the heretofore non-existent consumer
market also reaching a quarter-million units in 2001, but blossoming to 5.4
million systems in 2005. Finally, another research firm, Frost and Sullivan,
predicts staggering growth of videoconferencing sales to $35 billion by 2002.
This prediction for 2002 is exactly equivalent to the industry forecasts
for wireless subscriber growth.
Tel-One intends to be positioned to participate in this projected growth by
providing equipment, services and support for the processing of videoconferences
and other closely related communications products and services.
6
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THE OFFERING
Securities Offered 4,000,000 shares of common stock, 1,000,000 of which
Are being offered by Tel-One and 3,000,000 by
selling shareholders. See "Description of
Securities" and "Underwriting".
Maximum Offering Price $2.00 per share.
Use of Proceeds General corporate purposes including, but not limited
to, organizing expenses, capital expenses, marketing
and working capital.
Risk Factors An investment in the Shares offered hereby involves a
high degree of risk and therefore the Shares should
not be purchased by anyone who cannot afford the loss
of their entire investment. Prospective purchasers of
the Shares should carefully review and consider
the factors set forth under "Risk Factors" as well as
other information contained herein, before purchasing
any of the Shares. See "Risk Factors."
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RISK FACTORS
An investment in the Shares being offered hereby involves a high degree of risk.
Prior to making any investment decision, prospective investors should carefully
consider the following risk factors together with the other information
presented in this Prospectus including the financial statements and notes
thereto.
NO OPERATING HISTORY
Tel-One was recently organized in November 2000 and has had no operations to
date. Accordingly, Tel-One has no record of an operating history upon which
investors may base an evaluation of its performance or any assumption as to the
likelihood that Tel-One will be profitable. For at least the current fiscal
year, Tel-One is likely to incur losses from startup operations as a result of,
among other things, organization expenses, registration expenses, marketing and
expansion costs. There can be no assurance that Tel-One will achieve
profitability at any time in the future or, if achieved, sustain such
profitability. Therefore, Tel-One's prospects must be considered in light of
the risks, expenses and difficulties frequently encountered by a new small
business in a highly competitive industry. See "Business."
RISK
The top business risks that Tel-One faces are recruiting and retaining key
personnel, businesses and governments will cease to deploy new telecommunication
technologies and that sales growth will exceed Tel-One's ability to perform
effectively.
The economic risks affecting Tel-One are that competition will enter the
telephony project management field with lower pricing, creating potential gross
margin erosion and reducing net profit potential. Aside from government
contacts, Tel One, Inc. business and future prospects are difficult to evaluate
due to the relatively new approach offered by telephony project management
services. Certain risks exists including the:
- Ability to develop wide acceptance of Telephony Project
Management services
- Emergence of competition
- Dependence on key personnel
- General economic conditions
- Changes in the technology of products sold
The success of Tel-One's business depends in part upon Tel-One's ability to
attract, train and retain a sufficient number of qualified personnel
commensurate with Tel-One's expanding needs. An increase in the turnover rate
among Tel-One's employees would increase recruiting and training costs, and if
Tel-One were unable to recruit and retain a sufficient number of employees,
Tel-One could be forced to limit Tel-One's growth or possibly curtail Tel-One's
operations. There can be no assurance that Tel-One will be successful in
attracting, training and retaining the required number of employees to support
Tel-One's business in the future.
COMPETITION
Tel-One, Inc. will compete in the marketplace of known industry leaders such as
NORTEL, AT&T, Verizon and Sprint. These market leaders have a distinct advantage
in terms of financial strength, name recognition, quantity of personnel and
perception of stability. In order for Tel-One to overcome these disadvantages,
Tel One must identify customers seeking alternate suppliers other than the
industry leaders or customers dissatisfied with the services of the market
leaders or their present vendor. While the market leaders face many challenges
in customer satisfaction, Tel One cannot predict the level of service the market
leaders will supply in the future.
Tel-One is faced with competition from value-added sellers of communications
equipment and services and other retail communication product resellers. There
is no assurance that Tel-One will be able to compete effectively in the future.
Existing retailers and value-added communications service providers could, if
necessary, alter their business strategies and compete more effectively than
Tel-One. Additionally, other start-up operations could open in Tel-One's
targeted markets, thus hindering Tel-One's growth plans.
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Tel-One's current and potential competitors have significantly greater
financial, marketing, technical and other competitive resources, and greater
name recognition, than Tel-One. As a result, Tel-One competitors may be able to
adapt more quickly to new or emerging technologies and changes in customer
requirements or may be able to devote greater resources to the promotion and
sale of their products and services. There can be no assurance that Tel-One will
be able to compete successfully with existing competitors or with new
competitors. In addition, competition could increase if new companies enter the
market or if existing competitors expand their service offerings. An increase in
competition could result in price reductions and loss of market share and could
have a material adverse effect on Tel-One's business, financial condition or
results of operations.
To be competitive Tel-One will need to invest in engineering, research and
development and sales and marketing. There can be no assurance that Tel-One will
have sufficient resources to make such investments or that Tel-One will be able
to make the technological advances necessary to remain competitive. In addition,
current and potential competitors have established or may in the future
establish collaborative relationships among themselves or with third parties,
including third parties with whom Tel-One will have relationships, to increase
the visibility and utility of their products and services. Accordingly, it is
possible that new competitors or alliances may emerge and rapidly acquire
significant market share. If this were to occur, Tel-One's business, financial
condition and results of operations would be materially adversely affected.
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL EXECUTIVE OFFICERS
Tel-One is dependent to a great extent upon the experience, abilities and
continued services of W. Kris Brown, its Chief Executive Officer, acting Chief
Operating Officer, and Director. The loss of services of Mr. Brown would have a
material adverse effect on Tel-One's business, financial condition or results of
operation. In order to implement Tel-One's expansion strategy, Tel-One will
need to hire additional executive officers, including an experienced chief
financial officer and chief operating officer. There can be no assurance that
Tel-One will be able to identify the proper individuals or that such individuals
would be willing to be employed by Tel-One on terms acceptable to Tel-One. See
"Management."
CONTINUED CONTROL BY MANAGEMENT
Upon the sale of all 1,000,000 Shares offered by Tel-One, management of Tel-One
will beneficially own 59.77% of Tel-One's outstanding common stock. If all the
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Shares offered by the Selling Shareholders are sold, management will still own
41.61% of Tel-One's outstanding common stock. Tel-One's stockholders do not
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have the right to cumulative voting in the election of directors. Accordingly,
management will be in a position to exert control over the business and
operations of Tel-One, including the election of all directors of Tel-One and
approval of all corporate transactions. See "Principal Stockholders."
SHARES ELIGIBLE FOR FUTURE SALE
Tel-One has issued and outstanding 7,000,000 shares of common stock which were
issued to GLC CARA, Inc., SEB Capital, Inc. and Telecom Response, Inc. which has
subsequently distributed the shares to its shareholders as a dividend. Tel-One
has issued these shares in a private transaction in reliance upon exemptions
from registration under the Securities Act. Such shares may be sold only
pursuant to an effective registration statement or an applicable exemption,
including the exemption contained in Rule 144 promulgated under the Securities
Act. In general, under Rule 144 as currently in effect, a shareholder, including
an affiliate of Tel-One, may sell shares of common stock after at least one year
has elapsed since such shares were acquired from Tel-One or an affiliate of
Tel-One. The number of shares of common stock that may be sold within any
three-month period is limited to the greater of one percent of the then
outstanding common stock or the average weekly trading volume in the common
stock during the four calendar weeks preceding the date on which notice of such
sale was filed under Rule 144. Certain other requirements of Rule 144 concerning
availability of public information, manner of sale and notice of sale must also
be satisfied. In addition, a shareholder who is not an affiliate of Tel-One, and
who has not been an affiliate of Tel-One for 90 days prior to the sale and who
has beneficially owned shares acquired from Tel-One or an affiliate of Tel-One
for over two years may resell the shares without compliance with the foregoing
requirements under Rule 144.
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No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of Tel-One's common stock prevailing from time to time. Nevertheless,
sales of substantial amounts of common stock, or the perception that such sales
may occur, could have a material adverse effect on prevailing market prices. See
"Description of Securities - Shares Eligible for Future Sale."
DILUTION
The investors in this Offering will suffer immediate dilution of $1.79 per
Share. See "Dilution."
ADDITIONAL FINANCING
Tel-One anticipates that the proceeds from the Offering will be sufficient to
fund the initial formation of a sales force and offices and implement Tel-One's
marketing program. Thereafter, Tel-One may need to raise additional funds to
continue to implement its expansion strategy. There can be no assurance that
additional financing will be available or if available will be on favorable
terms.
ABSENCE OF DIVIDENDS
Tel-One is a development stage company and has never declared or paid any cash
dividends on its common stock. Tel-One intends to retain its earnings, if any,
to finance the growth and development of its business and therefore does not
anticipate paying any cash dividends on its common stock in the foreseeable
future. Although dividends are not limited currently by any agreements, it is
anticipated that future agreements, if any, with institutional lenders or others
may limit Tel-One's ability to pay dividends on the common stock. Any future
determination to pay cash dividends will be at the discretion of the Board of
Directors and will be dependent upon Tel-One's financial condition, results of
operations, capital and legal requirements and such other factors as the Board
of Directors deems relevant. See "Dividend Policy."
FORWARD LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act, and Section 21E of the Exchange Act. The
actual results of Tel-One may differ significantly from the results discussed in
such forward-looking statements. Certain factors that may cause such
differences include, but are not limited to, the factors discussed in this "Risk
Factors" section. The safe harbors contained in Section 27A of the Securities
Act and Section 21E of the Exchange Act, which apply to certain forward-looking
statements, are not applicable to this Offering.
OFFERING PRICE ARBITRARILY DETERMINED
The offering price of the shares has been determined solely by Tel-One and is
not necessarily related to Tel-One's assets, earnings, book value or any other
objective standard of value.
STATE REGISTRATION REQUIRED FOR SALES OF SHARES MAY RESTRICT THE TRANSFERABILITY
OF THE SHARES COVERED IN THIS PROSPECTUS.
Under some state securities laws, shares of common stock may not be sold
unless they are qualified for sale or are exempt from the registration
requirements of the state in which the prospective purchaser lives. Tel-One
will use best efforts to register and qualify Tel-One's common stock under the
state securities laws in which Tel-One believes it necessary to do so. Failure
to register and qualify Tel-One common stock under applicable state securities
laws may indefinitely restrict the ability of a shareholder in a particular
state to transfer his or her shares.
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ABSENCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE; VOLATILITY
Prior to this Offering, there has been no public market for the Shares, and
there can be no assurance that any active trading market will develop, or, if
any such market develops, that it will continue. Accordingly, unless and until
a public market develops, purchasers of the Shares may experience difficulty
selling or otherwise disposing of their Shares.
From time to time after this Offering, there may be significant volatility in
the market price of the common shares. Quarterly operating results of Tel-One
or other developments affecting Tel-One, such as announcements by Tel-One or its
competitors regarding acquisitions or dispositions, new procedures or
technology, changes in general conditions in the economy, and general market
conditions could cause the market price of Tel-One's common stock to fluctuate
substantially. The equity markets have, on occasion, experienced significant
price and volume fluctuations that have affected the market prices for many
companies' securities and have often been unrelated to the operating performance
of these companies.
PENNY STOCK REGULATION
Tel-One intends to seek quotations of Tel-One's securities on the NASDAQ's Over
The Counter Electronic Bulletin Board. In the absence of the common stock being
quoted at a market price of at least $5.00 per share or certain other
exemptions, trading of the common stock would be covered by Rule 15g-9
promulgated under the Exchange Act for non-NASDAQ and non-exchange listed
securities. Under this rule, broker-dealers who recommend such securities to
persons other than established customers and accredited investors must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction prior to sale. Furthermore,
broker/dealer's must disclose the compensation of the broker/dealer and its
sales person in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account.
The SEC has adopted regulations that generally define a "penny stock" to be an
equity security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share subject to certain exceptions. Such
exceptions include equity securities listed on NASDAQ and equity securities
issued by an issuer that has (i) net tangible assets in excess of $2,000,000, if
such issuer has been in continuous operation for at least three years, or (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 revenue of at
least $6,000,000 for the preceding three years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a risk disclosure schedule explaining the penny
stock market and the risks associated therewith.
Tel-One will initially be subject to the regulations applicable to penny stocks.
Accordingly, the market liquidity for Tel-One's common stock will be affected,
limiting the ability of broker/dealers to sell the securities and the ability of
purchasers in this Offering to sell their Shares in the secondary market.
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USE OF PROCEEDS
Assuming the sale of the securities offered hereby, the net proceeds to Tel-One,
after deducting estimated expenses payable by Tel-One in connection with the
Offering are estimated to be approximately $1,910,000. Tel-One expects to use
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the net proceeds as follows:
PERCENTAGE OF
PURPOSE AMOUNT NET PROCEEDS
-------------------------------- -------------- -------------
Registration Expenses $ 31,000 1.55%
Blue Sky, Printing and Engraving
And Miscellaneous Expenses $ 30,000 1.50%
Working Capital $ 1,939,000 96.95%
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Total $ 2,000,000 100.00%
Pending application of the proceeds of this Offering, Tel-One intends to invest
the net proceeds in certificates of deposit, money market accounts, United
States government obligations or other short-term interest bearing obligations
of investment grade.
The foregoing represents Tel-One's best estimate of its allocation of the net
proceeds of the sale of the shares based upon Tel-One's business plan and
current economic and industry conditions and is subject to reapportionment among
the categories listed above in response to, among other things, changes in its
plans, regulations, industry conditions and future revenues and expenditures.
The amount and timing of expenditures will vary depending on a number of
factors, including changes in Tel-One's contemplated operations or business plan
and changes in economic and industry conditions.
Tel-One believes that the net proceeds of this offering will be sufficient to
augment working capital, to use for expansion of office locations in key
targeted metropolitan areas around the country, to develop a definitive sales,
marketing and advertising program, and to attract and retain top project
management sales and technical employees.
Additionally, Tel-One, Inc. plans to use a portion of the proceeds to research
the development of new videoconference applications for specific Tele-Medicine
markets.
This belief is based upon assumptions and there can be no assurance that the
assumptions underlying Tel-One's plans will prove to be correct. After this
six-month period, or sooner if Tel-One's assumptions prove to be incorrect,
Tel-One may require additional capital in order to meet its then current plans
for expansion and capital requirements. Such financing may take the form of
common or preferred stock or debt securities, or may involve bank financing.
There can be no assurance that Tel-One will be able to obtain additional capital
on a timely basis, on favorable terms, or at all. In any of such events,
Tel-One may be unable to implement its current plans for expansion. See
"Capitalization" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
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DETERMINATION OF OFFERING PRICE
There is currently no public market for Tel-One's common stock. Tel-One, Inc.
plans to offer shares at prices arbitrarily determined from time to time by
Tel-One, up to a maximum of $2.00 per share. The actual price at which shares
will be sold will be determined by various factors, including without
limitation, general market conditions, the number of shares being purchased and
the amount of funding required by Tel-One to implement its business plan. The
offering price is not an indication of and is not based upon the actual value of
Tel-One, Inc. It bears no relationship to the book value, assets or earnings of
Tel-One, Inc. or any other recognized criteria of value. The offering price
should not be regarded as an indicator of the future market price of the
securities.
DIVIDEND POLICY
Tel-One has never paid dividends on its common stock and does not anticipate
paying such dividends in the foreseeable future. The payment of future cash
dividends by Tel-One on its common stock will be at the discretion of the Board
of Directors and will depend on its earnings, financial condition, cash flows,
capital requirements and other considerations as the Board of Directors may
consider relevant. Although dividends are not limited currently by any
agreements, it is anticipated that future agreements, if any, with institutional
lenders or others may limit Tel-One's ability to pay dividends on its common
stock.
DILUTION (1)
As of November 30, the net tangible book value of Tel-One's common stock was
$354,469 or $.04 per share of the common stock. The net tangible book value of
Tel-One's common stock is the tangible assets less total liabilities. Dilution
per share represents the difference between the amount paid per share by
purchasers in this offering and the net tangible book value per share after the
offering.
After giving effect to the sale by Tel-One of 1,000,000 shares of common stock
offered hereby and the application of the net proceeds thereof, the net tangible
book value of Tel-One's common stock as of November 30, 2000 would have been
approximately $2,293,469 or $.21 per share. This represents an increase in the
net tangible book value per share of $.18 to Tel-One's existing shareholders and
an immediate dilution of $1.79 per share to new stockholders purchasing common
stock in this offering. The following table illustrates this dilution on a per
share basis:
Assumed public offering price per share $2.00
Net tangible book value per share before offering $ .03
Increase per share attributable to payments by new stockholders $ .18
Net tangible book value per share after offering $ .21
Dilution per share $1.79
-----
------------------
(1) Assumes that Tel-One sells the Shares for $2.00 per Share maximum offering
price.
13
<PAGE>
The following table summarizes the differences between the existing
stockholders and new investors with respect to the number of shares of common
stock purchased from Tel-One, and the total consideration and the average price
per share paid:
<TABLE>
<CAPTION>
Percentage of
Outstanding
Shares of
Common Stock Percent of Total Average
Shares of ----------------- Total Consideration Price Per
Common Consideration Paid Share
Stock Paid(2) -------------- ---------
-------------- ---------
<S> <C> <C> <C> <C> <C>
EXISTING STOCKHOLDER 10,000,000 90.91% 4,575 .23%
NEW INVESTORS 1,000,000 9.09% 2,000,000 99.77% $ 2.00
TOTAL 100.0% 100%
</TABLE>
CAPITALIZATION
The following table sets forth the capitalization of Tel-One as of November 30,
2000, and as adjusted to give effect to the sale by Tel-One of 1,000,000 Shares.
The table should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
November 30, 2000 November 30, 2000
Actual As Adjusted(3)
<S> <C> <C>
Total current liabilities: 8,550 8,550
Long-term debt: 0 0
Stockholders' equity: Common stock $.0001 par value, 1,000 1,100
100,000,000 shares authorized; 10,000,000 shares
outstanding; 11,000,000 shares outstanding as adjusted
Additional paid-in capital 365,594 2,365,494
Total Stockholders' Equity 365,477 2,365,477
Total Liability and Stockholders' Equity 374,027 2,374,027
_______________________
<FN>
(2) Consisting of $2,075 in cash and $2,500 in services.
(3) Assumes sale of 1,000,000 shares of Common Stock at $2.00 per Share, less
expenses estimated to aggregate $61,000.
</TABLE>
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIS DISCUSSION INCLUDES "FORWARD-LOOKING" STATEMENTS THAT REFLECT TEL-ONE'S
CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. TEL-ONE
USE'S WORDS SUCH AS "EXPECT", "ANTICIPATE", "BELIEVE" AND "INTEND" AND SIMILAR
EXPRESSIONS TO IDENTIFY FORWARD-LOOKING STATEMENTS. INVESTORS SHOULD BE AWARE
THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM TEL-ONE'S EXPRESSED EXPECTATIONS
BECAUSE OF RISKS AND UNCERTAINTIES INHERENT IN FUTURE EVENTS, PARTICULARLY THOSE
RISKS IDENTIFIED IN THE "RISK FACTORS" SECTION OF THIS PROSPECTUS, AND SHOULD
NOT UNDULY RELY ON THESE FORWARD LOOKING STATEMENTS. TEL-ONE WILL NOT
NECESSARILY UPDATE THE INFORMATION IN THIS DISCUSSION IF ANY FORWARD-LOOKING
STATEMENT LATER TURNS OUT TO BE INACCURATE.
OVERVIEW
Tel-One, Inc. is a development stage company that was organized as a Florida
corporation on November 3, 2000. Since its inception, Tel-One's activities have
been limited to developing its business plan, issuing common stock to the
founders, preparing initial financial statements and preparing for this
offering.
On November 3, 2000, Tel-One issued 2,5000,000 shares of its $.0001 par value
respectively to GLC CARA, Inc., and 2,500,000 shares to SEB Capital Inc, in
exchange for organization efforts of Tel-One.
On November 7, 2000 Tel-One issued 5,000,000 shares of common stock to Telecom
Response in exchange for the rights to the contract receivables, net of cost,
derived from the fulfillment of services and product delivery required by
contract requirements to the State of Florida Government Centrex Contract
identified as State of Florida contract number 730-030-99-1.
COMPARISONS OF OPERATIONS SINCE INCEPTION TO NOVEMBER 30, 2000
----------------------------------------------------------------------
For the period ended November 30, 2000, Tel-One did not have any revenues as it
is in the development stage. For the period ended November 30, 2000 no salaries
were paid. During the same period, accounting expenses were $1,075 reflecting
normal accounting expenses in connection with Tel-One's efforts to establish
its' accounting system. Additionally, for the same period, amortization
expenses were $42.
LIQUIDITY AND CAPITAL RESOURCES
----------------------------------
Tel-One is in the development stage and its operations to date have been funded
by capital contributions from its' stockholders. Without the funding provided
by the Offering, Tel-One will not have sufficient capital to implement its
business plan. (See "Risk Factors").
As of the date of this Prospectus, Tel-One had no material commitments for
capital expenditures.
15
<PAGE>
BUSINESS
TEL-ONE
Headquartered in Tampa, Florida, Tel-One will offer a comprehensive range of
Telephony Project Management Services that include the areas of voice, data and
video applications. Tel-One will be utilizing the experience of management and
support teams to develop, implement and support specific design applications for
it's intended customer base.
In addition, Tel-One intends to respond to Federal, State and County government
"Bids and Contracts" for telephony project management services corresponding to
Tel-One's core business of Telephony Project Management Services products for
voice, data and video products.
The Telephony Project Management Services to be offered by Tel-One will comprise
the disciplines of consulting and field operations. Consulting services
undertake the responsibility to understand a customer's technology direction,
the interactions between the customer's divisions and geographical boundaries
and to meet specific product and service requirements within a defined budget.
The field operation service is the actual implementation of providing the
products and technical services to fulfill the customer requirements.
Telephony Project Management Services is designed to satisfy the following
criteria:
- Determining a solution for the customer requirements
- The assembling of required product and technical resources
- Launching the project for implementation
- Providing technical support services during and after implementation
Tel-One intends to market a broad range of telecommunications systems, telephony
peripheral equipment and videoconferencing systems from leading
telecommunication manufacturers and software development companies.
Tel-One intends to be organized into three distinct business segments, each will
have responsibility for its own profitability. The segments will be telephony
project management services, government contracts, and videoconferencing
applications.
Tel-One's executive offices are located at 5414 West Crenshaw Street, Tampa,
Florida 33634
TELEPHONY PROJECT MANAGEMENT SERVICES
Tel-One will provide telephony project management services for Fortune 2000
companies on an array of telecommunications applications ranging from voice,
data and video. Most often, Telephony Project Management Services will be
outsourced by the client through annual representation agreements, which define
the scope of the project(s) for the customer and the commitment of deliverables
by Tel-One. The Telephony Project Management Services fee schedule is based on
the expertise of qualified personnel required for the project(s) ranging from
Project Managers to clerical support.
Tel-One hopes to enjoy a high level of client retention and continue to be
assigned Telephony Project Management Services projects long after the initial
project has been completed. Tel-One plans to launch a target marketing campaign
to increase the awareness of Tel-One services and increase revenue opportunity
PRODUCTS
Tel-One will provide and sell telephony products based on government contract
requirements and client applications for Telephony Project Management projects.
At this time Tel-One does not manufacture telephony products. Product sales are
secured from leading manufactures that are specifically selected based on client
"best fit" requirements.
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<PAGE>
Tel-One's target client base has requirements for the following telephony
products and projects:
PBX Systems Electronic Key Systems Video-Conferencing Systems
Voice over IP Systems Unified Messaging Systems Medical Imaging Software
Microwave Communication Fiber Optics Backbone Audio/Video Systems
Call Processing Systems Voice Logging Systems Data Cabling Systems
Centrex Services Tele-Medicine Systems Call Center Systems
Potential product sales to clients are represented by the following
manufactures:
NORTEL Networks AT&T
Toshiba Inter-Tel
3Com AVT
Mercon Electronics Tandberg
Adtran IBM
Valcom Viking
Plantronics Second Opinion Software
American Medical Development Sony
SERVICES
Tel-One's project management and technical services provided to meet client
requirements are as diverse as company personnel assigned to each project.
Tel-One telephony project management and technical services encompass the
following areas:
Product Evaluations Site Audits
System/Network Design Testing and Quality Assurance
Project Implementation Scope of Work Schedules
Database Design/Input Site Preparation
On Site Installation Services In-Service Training Program
Remote Tech Support As Built Drawing
Project Documentation Help Desk Services
In addition to standard Telephony Project Management Services, Tel-One will
consider and accept projects based on specific client requirements on leading
edge technology changes, complex or hazardous site applications, vintage system
technical support and disaster recovery plans.
Tel-One will be highly selective in recruiting experienced operations personnel
from leading manufacturer's management teams. Each project manager must draw
form acquired experience derived from field operations, established
relationships with manufacturing sources, trade sources and field experts to
manage client projects effectively.
Tel-One seeks affiliations and associations with experienced telephony companies
and personnel across the country to provide national coverage for many clients.
Tel-One hopes to gain the reputation of being the first contact to assemble
technical resources any where in the country to respond to urgent requests or
emergency conditions.
17
<PAGE>
FLORIDA GOVERNMENT CENTREX CONTRACT
Tel-One, Inc.'s principal asset is the rights to the contract receivables, net
of cost, derived from the fulfillment of services and product delivery required
by contract requirements to the State of Florida Government Centrex Contract
identified as State of Florida contract number 730-030-99-1. This contract
commenced on August 4, 1998 by and between The State of Florida and Telecom
Response, Inc. and has an initial term expiration date of January 1, 2003.
The purpose of the contract was for the purchase of telephone instruments such
as featured-phones, data instruments and other peripherals by all State of
Florida agencies and other eligible users able to purchase such equipment and
services through the State of Florida Contract for Centrex Services.
Centrex Services for any given State, like the State of Florida, is provided by
the establishment of direct telephone line service by area Telephone Company
Service Providers as a network within a defined local geographic market. This
arrangement provides for an uncomplicated method for employees located within
the defined market to quickly and effectively establish communications without
the encumbrance of stepping through a process of dialing various local seven or
ten digit numbers. Simple coded processes for interactive dialing to different
agencies and departments of the State are put in place for direct calling to
those establishments. The type of telephone sets used is typically either
analog or digital sets depending on the local Telephone Company Service
Provider's central office set up for each State agency or department physical
address. The most commonly used telephone sets for Centrex Service requirements
are, or have been, Nortel Manufactured telephone sets of various models.
Telecom Response is a reseller, installer and service provider of Nortel
products.
As consideration for the assignment of proceeds, net of cost, to the Florida
Government Centrex Contract to Tel-One by Telecom Response, Tel-One has issued
5,000,000 shares of Tel-One common stock to Telecom Response.
Based on past and current experience by Telecom Response with the ordering
habits of the State of Florida, under the Centrex Contract Agreement, the
anticipated net of cost receivables to be realized by Tel-One, for the remaining
term of the contract for years 2001 and 2002, should produce an estimated amount
of cash flow of approximately $191,003 and $210,103 respectively, or an expected
aggregate of $401,106 for remaining two (2) years. Assuming a 7% discount rate
based on estimated current average certificate of deposit rates, the net present
value of the estimated cash flow for all two years remaining should be $362,019.
VIDEO CONFERENCING
Tel-One is involved in advanced video conferencing applications in the areas of
Tele-Medicine and Distance Education
TELEMEDICINE AND DISTANCE EDUCATION
TELEMEDICINE
Telemedicine has been generally defined as the use of telecommunications to
provide medical information and services. It can be as simple as one health
practitioner talking to another over the telephone or as complex and
sophisticated as broadcasting over satellite technology from different parts of
the world.
Tel-One will be positioning itself to direct marketing and sales activities in
the Telemedicine arena by supplying communications solutions via the use of
specialized videoconferencing equipment manufactured and designed specifically
for use by an assortment of medical physicians, clinicians, practitioners and
specialist. This area of telemedicine is very useful when a 'face-to-face'
consultation is necessary between a patient, their provider or clinician or
attending doctor and a specialist needing to evaluate the condition of the
patient in a 'real-time' situation.
18
<PAGE>
Telemedicine videoconferencing equipment is emerging as quite an effective tool
in the Health Care Industry by allowing medical and health care providers to
save a significant amount of time, and money, by eliminating the need for
specialist or physicians to travel long distances in order to provide their
services. Almost all specialties of medicine have been found to be conducive to
this kind of consultative technology, including psychiatry, internal medicine,
rehabilitation, cardiology, pediatrics, obstetrics and gynecology. There are
also many peripheral devices that can attach to Telemedicine videoconferencing
equipment that can aid in an interactive examination. For instance, an otoscope
allows a physician to see inside a patient's ear; a colposcope used for vaginal
exams allows a specialist to determine abuse cases; or a stethoscope allows the
consulting physician to hear the patient's heartbeat.
Additionally, Tele-medicine videoconferencing has been found to be very
effective in answering and satisfying the Continuing Medical Education need
associated with the Health Care Industry.
Tel-One plans to not only provide specialized videoconferencing type equipment
for the unique area of Tele-medicine, but will also be positioning itself to
provide the connectivity project management services needed to implement the
networks that will be structured for the systems to work efficiently and
effectively.
DISTANCE EDUCATION
Distance Education or Learning is a form of instruction in which video and audio
technologies are used to allow students to attend an educational experience in a
location distant from where the course is being presented.
Through distance education, a teacher, instructor or specialist can expose
students to people, places, and experiences without the traditional restrictions
of time limitations or geographical barriers. Various types of communications
network capabilities are being expanded around the country that allows Distance
Education Videoconferencing Equipment to be used quite effectively to enhance
education. The demand for this type equipment and services is growing steadily
as can be attested by the amount of various grants being issued for this
specific purpose.
Tel-One is planning to position itself as a provider of both equipment and
services in this business. The United States Government, particularly in the
Education sector, has been and will be taking steps to upgrade and enhance the
ability for educators and education systems to use the latest technologies
available for improving the delivery of information and data to students of all
levels throughout the country.
Management of Tel-One intends to provide for the sale and delivery of Distance
Education Systems the latest in technologies and designs. The implementation of
Distance Education Video Conferencing Systems relies heavily on the ability of
the installing firm to understand the concepts of, not only, videoconferencing,
but sound and network communications as well.
Tel-One expects to be positioned to provide the needed expertise to evaluate,
design and install a multiple of systems for most education classroom
environments.
VOICE OVER INTERNET PROTOCOL
Tel-One intends to provide products and services in the fast emerging business
industry segment of Voice over Internet Protocol.
Voice over Internet Protocol has been generally defined as technology used to
transmit voice conversations over a data network using Internet protocol. Such
a data network may be the Internet or a commercial, medical, government, or
educational internet typically referred to as a local area network (LAN) or wide
area network (WAN) or a combination of all the above. As an industry segment of
business, Voice over Internet Protocol is in its infancy stage of growth but is
predicted to have significant impact on the way voice communications will take
place as business and industry move into the future.
Internet and networking technologies are advancing rapidly to expand the use and
speed on the networks to allow for greater amounts of data, and now voice, to be
carried over the system. Simply, the Internet is many large computer networks
joined together over high-speed backbone (part of the communications network
which carries the heaviest traffic of information) data links ranging in
different levels of speed. Technology advances are allowing these high-speed
backbone data links to expand and grow to allow for increasing amounts of data
and voice to be processed at faster speeds.
19
<PAGE>
Tel-One intends to position itself as a provider of both products and services
by developing partnerships with world-class manufacturers of Voice over Internet
Protocol products. The business market segment Tel-One seeks to pursue in
Voice over Internet Protocol arena will be small (25 to 50 employees) to medium
(51-1000 employees) sized firms.
THE TELEPHONY PROJECT MANAGEMENT INDUSTRY
For many years, firms have attempted to roll out expensive and complex telephony
projects using general specifications derived from in-house personnel and
limited tele-communications experience. This often resulted in poor product
choices, less than desired performance, cost overruns, design flaws,
un-anticipated network problems and missed due dates and deadlines. Often the
use of third-party equipment vendors and supplier personnel provided little to
no improvement then the efforts of in-house personnel.
The current and future condition of the industry is that as new technology
drives companies to replace old vintage telephony systems, the time frame to
implement these changes is often hindered by the availability of qualified
technical resources. For several years Fortune 2000 companies have been in a
hiring frenzy to locate qualified personnel to fill positions necessary to
fulfill large-scale implementation plans. These companies have experienced high
personnel turn over rates despite high salaries and bonus packages. Outsourcing
of experienced telephony companies has become an extensively used and viable
alternative for many firms faced with critical deadlines. Tel-One intends to
position itself to provide valuable outsource services to meet the demands of
corporate or government deadlines.
GROWTH STRATEGIES FOR EXPANSION
Tel-One's goal is to become a technological, service-oriented leader in the
telecommunications field, with operating systems and personnel to design and
implement quality systems based on specific customer requirements. Tel-One will
initially focus its efforts on marketing Tel-One's Telephony Project Management
Services segment of business, and will provide customer solutions using products
manufactured by market leaders.
QUALITY & CUSTOMER SUPPORT
Tel-One realizes that quality customer support is paramount to building a good
reputation and to establishing satisfied customers over the long term. Tel-One
also believes that given the generally poor level of customer support provided
by other telecommunications firms, developing an excellent customer support team
is vital to Tel-One's efforts to differentiate itself from the competition. As
such, customer support, administrative and technical, for all levels of service
will be among Tel-One's highest priorities. Tel-One intends to develop a strong
reputation for truly superior customer support at all levels. Tel-One will
strive to hire individuals with experience in telecommunication and Internet
Protocol Telephony applications and to add value to its customer support team.
INDUSTRY OVERVIEW: VIDEO CONFERENCING
According to the Gartner Group, a respected telecommunications research company,
the videoconferencing market is growing at 48 percent a year from a base of 1.1
billion dollars in 1995. Another industry research company, Forward
Concepts, projects a 40% annualized growth rate from over $1 billion in 1996 to
over $5 billion by 2001. IDC sees the business market for videoconferencing
systems climbing to 600,000 systems in 2001. In contrast, they see the
heretofore non-existent consumer market also reaching a quarter-million units in
2001, but blossoming to 5.4 million systems in 2005. Finally, another research
firm, Frost and Sullivan, predicts staggering growth of videoconferencing sales
to $35 billion by 2002. This prediction for 2002 is exactly equivalent to the
industry forecasts for wireless subscriber growth.
Tel-One intends to be positioned to participate in this projected growth by
providing equipment, services and support for the processing of videoconferences
and other closely related communications products and services.
20
<PAGE>
MARKETING STRATEGY
Tel-One, as a company, will initially market a concept of Telephony Project
Management that is available from existing relationships through Tel-One's
President, W. Kris Brown. Next, Tel-One intends to utilize a marketing campaign
to broaden the scope of services and generate additional new business.
Tel-One's marketing objectives will be to create identity, increase sales, and
enhance customers' experiences and retention. Tel-One's initial plan includes
targeted marketing programs designed to reach local segments of key markets.
Tel One, Inc.'s overall advertising and promotional objectives will be to
position Tel-One as the leader in the market.
Tel-One will develop an advertising campaign built around Telephony Project
Management Services beginning with a "who we are" statement and supporting it
with ads that reinforce this message. Furthermore, Tel-One will develop a
consistent reach and frequency throughout the year. Tel-One will support
various telephony and video conferencing products. As such, Tel-One will
promote these products via a vigorous Sales/Marketing program to be implemented.
Tel-One's business plan will be to conduct a marketing analysis in order to
identify target companies and better understand competitors. Tel-One, Inc.
expects that the marketing analysis will take the following form:
- Search for research firms or individuals familiar with the target market
- Choose appropriate firm or individual
- Search for target companies in known market
- Determine contact people at target companies
- Determine product need of target companies
- Determine timing requirements of target companies
- Search for new markets and applications for the product
Tel-One, Inc. will then hire sales staff to begin marketing Telephony Project
Management Services and associated products required for client projects.
Tel-One anticipates that the market analysis will take about 5 months from the
date of this offering. The hiring of sales staff and marketing of the product
line will commence after the completion of the marketing analysis. Tel-One
intends to hire sales staff whose qualifications are commensurate with those
determined by the marketing analysis.
In addition to standard advertising practices, Tel-One hopes to gain
considerable recognition through client referrals and industry trade sources.
Tel-One's management understands that targeted advertising will play a critical
role in gaining market share. With this in mind, Tel-One intends to develop an
aggressive, comprehensive marketing plan to build its market and educate
customers as well as developing name recognition and loyalty. Tel-One's
advertising programs will be designed to capture market shares and provide name
recognition.
INDUSTRY COMPETITION
Tel-One believes that the principal competitive factors in the
telecommunications industry include the ability to identify and respond to
customer needs, quality and breadth of service offerings, price and technical
expertise. Tel-One's ability to compete also depends in part on a number of
competitive factors out of Tel-One's control, including the ability to hire and
retain employees, the development by others of products and services that are
competitive with Tel-One's products and services, the price at which others
offer comparable products and services and the extent of Tel-One's competitors'
responsiveness to customer needs. There can be no assurance that Tel-One will
be able to continue to compete successfully with existing competitors or with
new competitors.
21
<PAGE>
EMPLOYEES
Tel-One does not currently have any employees, consultants or independent
contractors. Tel-One will rely on Mr. W. Kris Brown, President, and Mr. Chuck
Williams, Secretary. Since Tel-One has no other employees, if Tel-One loses
their services, Tel-One will cease operations causing your investment to be
worthless. Tel-One expects to hire other personnel as necessary for sales and
marketing, and administration.
Tel-One will depend upon the continued services of these two executive officers.
Since Tel-One has no other executive officers and no capital with which to
attract others at this time, the loss of their services could cause Tel-One to
go dormant or to close down, which would cause the value of your common stock
purchased in this offering to become worthless.
Tel-One does not currently maintain "key-man" life insurance on executive
officers, and there is no contract in place assuring their services for any
length of time.
Tel-One relies on it's officers to start and operate Tel-One even though Tel-One
has no commitments for contracts and may not be able to generate such contracts
or commitments in the future. If Tel-One is unable to generate such contracts or
commitments, the value of your investment may decline or become totally
worthless.
Tel-One expects to expend significant time and effort in expanding business,
including the potential for acquiring other businesses. This growth may place a
significant strain on Tel-One's resources. Tel-One cannot be certain that it's
systems; procedures and controls will be adequate to support operations as they
expand. Any future growth also will impose significant additional
responsibilities on members of management, including the need to identify,
recruit and integrate new senior level managers and executives. Tel-One cannot
be certain of identifying and retaining such additional managers and executives.
As a result, Tel-One cannot assure you that Tel-One will be able to expand its
business or manage any future growth effectively and profitably.
DESCRIPTION OF PROPERTY
As of the date of this prospectus, Tel-One has no properties and has no
agreements to acquire any properties. Tel-One currently use the offices of
Telecom Response, Inc. at no cost to Tel-One. Telecom Response, Inc. has agreed
to continue this arrangement until Tel-One begins operations.
When operations commence, Tel-One's need for office space will likely increase
and Tel-One intends to lease such space as needed. A portion of the proceeds
from this offering has been allocated to leasing office space once operations
are commenced (see "Use of Proceeds").
LEGAL PROCEEDINGS
Tel-One is not currently involved in any litigation that is expected to have a
material adverse effect on its business or financial position. There can be no
assurance, however, that third parties will not assert infringement or
other claims against Tel-One in the future that, regardless of the outcome,
could have an adverse impact on Tel-One as a result of defense costs, diversion
of management resources and other factors.
22
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the directors
and executive officers of Tel-One:
Name Age Position
---------------- --- --------
W. Kris Brown 47 President, CEO, Director
Chuck Williams 54 Secretary, Director
George Carapella 49 Director
A director is elected for a period of one year at Tel-One's annual meeting of
shareholders and serves until the next such meeting and until his or her
successor is duly elected and qualified. Directors may be re-elected annually
without limitation. Officers are appointed by, and serve at the discretion of,
the Board of Directors. Tel-One's director does not presently receive any
compensation his services as director.
Set forth below is a biographical description of Tel-One's directors and
executive officers.
W. KRIS BROWN, PRESIDENT, CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER AND
DIRECTOR
BA Marketing, University of South Florida
W. Kris Brown is currently President, CEO, and Chairman of the Board. He is an
original founder of Telecom Response, Inc. which Incorporated and began
operations on May 1, 1997. He is responsible for the complete revenue
production of Telecom Response, Inc. He overseas and directs all Sales,
Marketing, Operations and Financial matters of the firm. He handles all
corporate communications and public relations interaction with all current and
potential customers of Telecom Response, Inc.
Mr. Brown's professional experience encompasses many different areas in the
Telecommunications industry. He has been involved in start up companies and
divisions, and Mr. Brown's management experience is diverse. He acquired
knowledge of start up telephony operations in 1981 at IsoTec. He developed
missionary marketing programs that were used to increase sales and marketing
awareness at Jarvis, a division of IsoTec.
In 1985, while working for Inter-Tel, Inc., Mr. Brown established the
southeastern division of Inter-Tel. He ran the Inter-Tel offices in Florida,
Georgia, New Jersey and Baltimore.
Mr. Brown enjoyed considerable success as President of Inter-Tel Communications,
a subsidiary of Inter-Tel, Inc. and as VP of Inter-Tel, Inc. However, he became
interested in telephony projects outside of Inter-Tel's manufacturing product
line. With ideas in mind, Mr. Brown conducted a feasibility study to determine
the viability of a outsource company for advanced applications. When he found
that this concept was worthwhile and could be developed, Mr. Brown formed
Telecom Response, Inc.
CHUCK WILLIAMS, SECRETARY, DIRECTOR
BS Business Management, Florida State University
Chuck Williams is currently Vice President of Strategic Planning and Finance,
and a director of Telecom Response, Inc. Telecom Response has employed him
since May 16, 2000. Prior to his employment, he was President and sole owner of
an Equipment Leasing Company entitled Corporate Funding Resources, Inc. He has
served as a director of TRI since October 1998. His duties consist of corporate
planning for future enhanced revenue production and expense curtailment. He
reports and works with the President to evaluate and maximize all financial
matters for the firm.
Mr. Williams's professional experience involves various areas of the finance
industry. He has held Senior Management positions with several financial
institutions, which include Banks, Finance and Equipment Leasing Firms.
23
<PAGE>
His numerous responsibilities involved corporate development, management and
administration of company portfolio, finance and lease contracts, management and
analysis of credit and documentation process and responsibilities involving
multiple levels of debt financing and placement.
GEORGE CARAPELLA, DIRECTOR
Mr. Carapella has served as director of Tel-One since its formation in November,
2000. Mr. Carapella is presently also the Chief Executive Officer, President
and Director of TravelLink Services, Inc., a Tampa, Florida based company formed
in April 1999 that provides a travel referral program for the benefit of travel
agents. His responsibilities at such company include marketing, development and
strategic planning. Prior to undertaking such position, from 1995 to 1998, Mr.
Carapella was the Director of Footcare Centers of America, Inc, a Florida
corporation developed to consolidate the podiatric industry. He assisted the
company in developing its marketing program and choosing strategic management
partners to evolve the company to the point where underwriters and investment
bankers would consider financing the company. From 1990 to 1995, Mr. Carapella
founded and served as the Chief Executive Officer and a Director of 1-800-Low
Airfare. Such company was formed to provide air travel programs for the
consumers benefit at cost effective rates by implementing a marketing program
through the use of a vanity numbers, which are used to market travel such as
1800-fly-wings and # Fly, and then negotiating rates with the airlines to
provide the most cost effective fares available in the market. Mr. Carapella is
currently President and Chief Executive Officer of Split Second Trading, Inc. a
development stage company that currently has a registration statement pending
before the Securities and Exchange Commission. Mr. Carapella is currently
vice-president of Bay-Area Travel, Inc. Bay Area Travel, Inc. filed for chapter
11 protection pursuant to the United States Bankruptcy Code on August 12, 2000,
Bay Area Travel has filed a plan of re-organization with the Bankruptcy Court
and expects to be approved in the near future.
DIRECTOR COMPENSATION
Directors of Tel-One who are not salaried officers will receive no fee for
attending each Board meeting or meeting of a committee of the Board. All
directors will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with attending Board and committee meetings. In the
future, Tel-One reserves the right to issue shares of Tel-One's common stock to
non-officer Board members for their agreement to become a Board member.
LIMITATIONS ON PERSONAL LIABILITY OF DIRECTORS AND OFFICERS
In general, Tel-One articles of incorporation and bylaws provide the following:
- That the boards of directors fix the number of directors within a specified
range. At present Tel-One have three directors;
- The existing directors will fill any vacancy or newly created directorship
with any new director; and
- Only the chairman of the board, the board of directors or the president can
call a board of directors meetings.
Tel-One is a Florida corporation and is subject to the Florida Business
Corporation Act. Under the laws of Florida, the articles of incorporation can be
amended only with the approval of Tel-One's board of directors and Tel-One
shareholders. Tel-One's bylaws provide that they cannot be amended without the
approval of a majority of Tel-One board of directors.
Provisions of the Florida Business Combination Law, of Tel-One articles of
incorporation and bylaws may discourage or make more difficult the acquisition
of control of Tel-One through a tender offer, open market purchase, proxy
contest or otherwise. These provisions are intended to discourage or may have
the effect of discouraging certain types of coercive takeover practices and
inadequate takeover bids and to encourage persons seeking to acquire control of
One-Tel first to negotiate with us. Tel-One management believes that the
foregoing measures, many of which are substantially similar to the
takeover-related measures in effect for many other publicly held companies,
provide benefits by enhancing Tel-One's ability to negotiate with a person
making an unfriendly or unsolicited proposal to take over or restructure
Tel-One. Tel-One believes that these benefits outweigh the disadvantages of
discouraging such proposals because, among other things, negotiation of such
proposals could result in an improvement of their terms.
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<PAGE>
Provisions of the Florida Business Combination Law, in addition to provisions of
Tel-One's articles of Incorporation and bylaws, address corporate governance
issues, including the rights of shareholders. Some of these provisions could
hinder management changes while others could have anti-takeover effect.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of Tel-One's common stock as of the date of this Prospectus by (i)
each person known by Tel-One to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) by each officer and director of Tel-One, and
(iii) by all officers and directors of Tel-One as a group. Unless otherwise
indicated, each of the following persons has sole voting and investment power
with respect to the shares of common stock set forth opposite his, her or its
name.
<TABLE>
<CAPTION>
Percent of Percent of
Amount and Nature of Class Before Class After
Name of Beneficial Owner Beneficial Ownership Offering Offering
---------------------------------- -------------------- ------------- ------------
<S> <C> <C> <C>
W. Kris Brown 4,077,000 40.77% 27.97%
George Carapella 2,500,000 25% 13.64%
All Officers and
Directors as a Group (two persons) 6,577,000 65.77% 41.61%
</TABLE>
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<PAGE>
SELLING SHAREHOLDERS
W. Kris Brown, Board Member and Chief Executive Officer, is registering for sale
1,000,000 of his 4,077,000 shares which were acquired on December 7, 2000
pursuant to a distribution by Telecom Response, Inc. to its shareholders of its
shares in Tel-OneGLC CARA, Inc. is registering for sale 1,000,000 shares of its
2,500,000 shares, SEB Capital Inc. is registering for sale 1,000,000 shares of
its 2,500,000 shares and Tel-One is registering 1,000,000 shares. GLC CARA,
Inc., SEB Capital, Inc. and W. Kris Brown have agreed with Tel-One to not sell
any of their shares until Tel-One has sold all 1,000,000 shares offered by
Tel-One. Tel-One is paying all costs and expenses associated with registering
for sale 4,000,000 shares.
DESCRIPTION OF SECURITIES
The following summary description of the Securities is qualified in its entirety
by reference to Tel-One's Certificate of Incorporation, as amended, and its
By-laws, copies of which have been filed as Exhibits to the Registration
Statement of which this Prospectus is a part.
Tel-One is authorized to issue 100,000,000 shares of common stock, $.0001 par
value per share. As of the date of this Prospectus, prior to giving effect to
the securities to be issued in the Offering, there are 10,000,000 shares of
Common Stock outstanding.
COMMON STOCK
Holders of shares of common stock are entitled to one vote per share of common
stock on all matters submitted to a vote of stockholders of Tel-One and to
receive dividends when declared by the Board of Directors from funds legally
available therefore. Upon the liquidation, dissolution or winding up of
Tel-One, holders of shares of common stock are entitled to share ratably in any
assets available for distribution to stockholders after payment of all
obligations of Tel-One and after provision has been made with respect to each
class of stock, if any, having preference over the common stock. Holders of
shares of common stock do not have cumulative voting rights or preemptive,
subscription or conversion rights. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are fully paid and nonassessable. See "Risk Factors" and "Dividend
Policy."
SHARES ELIGIBLE FOR FUTURE SALE
All shares of common stock being offered hereby will be immediately tradable
without restriction or further registration under the Securities Act. The
outstanding shares of common stock include 7,000,000 shares of common stock
outstanding deemed to be "restricted securities," as that term is defined under
Rule 144 promulgated under the Securities Act, in that such shares were
purchased or acquired by such stockholders of Tel-One in transactions not
involving a public offering, and, as such, may only be sold pursuant to a
registration statement under the Securities Act, in compliance with the
exemption provisions of Rule 144, or pursuant to another exemption under the
Securities Act. All of such restricted Shares of common stock are eligible for
sale under Rule 144, subject to the volume limitations prescribed by the Rule.
In general, under Rule 144 as currently in effect, a shareholder, including an
affiliate of Tel-One, may sell shares of Common Stock after at least one year
has elapsed since such shares were acquired from Tel-One or an affiliate of
Tel-One. The number of shares of common stock that may be sold within any
three-month period is limited to the greater of one percent of the then
outstanding common stock or the average weekly trading volume in the common
stock during the four calendar weeks preceding the date on which notice of such
sale was filed under Rule 144. Certain other requirements of Rule 144 concerning
availability of public information, manner of sale and notice of sale must also
be satisfied. In addition, a shareholder who is not an affiliate of Tel-One (and
who has not been an affiliate of Tel-One for 90 days prior to the sale) and who
has beneficially owned shares acquired from Tel-One or an affiliate of Tel-One
for over two years may resell the shares of common stock without compliance with
the foregoing requirements under Rule 144.
No predictions can be made as to the effect, if any, that future sales of
shares, or the availability of shares for future sale, will have on the market
price of Tel-One's common stock prevailing from time to time. Nevertheless,
sales of substantial amounts of common stock, or the perception that such sales
may occur, could have a material adverse effect on prevailing market prices and
could impair Tel-One's ability to raise capital through the sale of its equity
securities.
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<PAGE>
TRANSFER AND WARRANT AGENT
Corporate Stock Transfer, Inc. a Colorado based transfer agent will provide
services to Tel-One. Corporate Stock Transfer is located at 3200 Cherry Creek
Drive South, Suite 430, Denver, Colorado 80209 and their telephone number is
(303) 282-4800 with a contact person of Carylyn Bell or Sally Rogers.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for Tel-One by
Glenn Evan Goldberg, an attorney with the law firm of Goldberg Law Group, P.A.,
100 S. Ashley Drive, Suite 2200, Tampa, Florida 33602
EXPERTS
The audited balance sheets of Tel-One were prepared by Baumann, Raymondo &
Company, P.A., 11210 N. Dale Mabry, Tampa, Florida 33618 and the related
Statements of Operations, Statements of Stockholders' Equity and Statements of
Cash Flows have been included herein and in the Registration Statement in
reliance upon the report, appearing elsewhere herein, of independent certified
public accountants, and upon the authority of said firm as experts in accounting
and auditing.
ADDITIONAL INFORMATION
Tel-One has filed with the SEC a Registration Statement under the Securities Act
with respect to the Shares offered hereby. This Prospectus omits certain
information contained in the Registration Statement and the exhibits thereto,
and references are made to the Registration Statement and the exhibits thereto
for further information with respect to Tel-One and the Shares offered hereby.
Statements contained herein concerning the provisions of any documents are not
necessarily complete, and in each instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement. Each such statement
is qualified in its entirety by such reference. The Registration Statement,
including exhibits and schedules filed therewith, may be inspected without
charge at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048, and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may be
obtained from the Public Reference Section of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois upon payment of
the prescribed fees. Electronic registration statements (as well as proxy
reports and other information when filed) filed through the Electronic Data
Gathering, Analysis, and Retrieval System are publicly available through the
SEC's Website (http://www.sec.gov). At the date hereof, Tel-One was not a
reporting company under the Exchange Act.
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<PAGE>
PART II
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 607.0850(1) of the Florida Business Corporation Act (the
"Corporation Act") provides that a Florida corporation may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably incurred by
him in connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no cause to believe his conduct was unlawful.
Section 607.0850(2) provides that a Florida corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought shall
determine that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.
Section 607.085 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 607.085 shall not be deemed exclusive of
any other rights to which the indemnified party may be entitled.
Tel-One's Certificate of Incorporation and By-laws provide that Tel-One
shall indemnify certain persons, including officers, directors, employees and
agents, to the fullest extent permitted by Section 607.085 of the Corporation
Act. Reference is made to the Certificate of Incorporation and By-laws filed as
Exhibits 3.1 and 3.2, respectively.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable
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<PAGE>
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be borne by Tel-One in
connection with the issuance and distribution of the shares pursuant to the
offering. Tel-One will pay all costs and expenses associated with registering
4,000,000 shares.
SEC registration fee $ 2,000
NASD filing fee
NASDAQ SmallCap Market fee
Estimated Legal fees and expenses $30,000
Estimated Accounting fees $ 5,000
Estimated Blue Sky fees and expenses $10,000
Estimated Printing and engraving expenses $10,000
Estimated Miscellaneous $ 4,000
Total estimated fees and expenses $61,000
-------
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<PAGE>
RECENT SALES OF UNREGISTERED SECURITIES
On November 3, 2000, Tel-One issued 2,500,000 shares of its common stock to GLC
Cara, Inc. and 2,500,000 shares of its common stock to SEB Capital, Inc. in
exchange for services to be rendered to Tel-One. On November 7, 2000, Tel-One
issued 5,000,000 shares of its common stock to Telecom Response, Inc. as
consideration for the acquisition of the rights to the contract receivables, net
of cost, derived from the fulfillment of services and product delivery required
by contract requirements to the State of Florida Government Centrex Contract
identified as contract number 730-030-99-1. Subsequently, on December 7, 2000,
Telecom Response, Inc. distributed as a dividend to their shareholders the
5,000,000 shares of common stock in Tel-One.
EXHIBITS
1 Financial Schedule
1(i) Financial Statement
2 Independent Auditors' Consent
3 State of Florida Government Centrex Contract
4(i) Article of Incorporation
4(ii) By-Laws
4(iii) Attorney Consent
UNDERTAKINGS
1. The Registrant will, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a) (3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information
in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the
plan of distribution.
2. The Registrant will, for determining liability under the Securities
Act, treat each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be the
initial bona fide offering.
3. The Registrant will file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
4. The Registrant will provide to the Underwriter at the closing
certificates in such denominations and registered in such names as required by
the Underwriter to permit prompt delivery to each purchaser.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
6. For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h) under
the Act shall be deemed to be part of this registration statement as of the time
the Commission declared it effective.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Act of 1933, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements of
filing on Form SB-2 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, there unto duly authorized, in the City of
Tampa, State of Florida on the 26th day of December, 2000.
TEL-ONE, INC.
By: /S/ W. Kris Brown
-------------------------------
W. Kris Brown, Chief Executive Officer
Chief Operating Officer,
and Director
31
<PAGE>
