8-K 1 form8k111102.txt FORM 8-K DATED NOVEMBER 11, 2002 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): November 11, 2002 TELS CORPORATION ------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) Utah 0-12993 87-0373840 ---------------------------- ------------------------ -------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) No.) Identification 1750 Yankee Doodle Rd, #202 Eagan, MN 55121 ------------------------------- ---------- (Address of Principal Executive (Zip Code) Offices) (651) 681-8408 --------------------------------------------------- (Registrant's telephone number, including area code) ------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events On November 11, 2002, the Registrant's board of directors approved a change in the Registrant's fiscal year. The new fiscal year will begin on October 1 and end on September 30 of each year, effective with the fiscal year ended September 30, 2002. As reported in the current report on Form 8-K filed with the Securities and Exchange Commission on September 27, 2002, TELS acquired Strategic Futures and Options, Inc. ("SFO") in a merger transaction that was treated as a reverse acquisition of TELS by SFO for accounting purposes. SFO's fiscal year ends on September 30 and TELS has elected to adopt the fiscal year of SFO. In accordance with the position expressed in the "Division of Corporation Finance: Frequently Requested Accounting and Financial Reporting Interpretations and Guidance" dated March 31, 2001, no transition report is necessary because the Registrant has elected to adopt the fiscal year of its acquirer for accounting purposes. As a result, the next regular periodic report to be filed by the Registrant will be its annual report on Form 10-KSB for the fiscal year ended September 30, 2002, which will be due on or before December 30, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TELS Corporation Dated: November 12, 2002 By /s/ Ronald G. Wolfbauer, Jr. ------------------------------ Ronald G. Wolfbauer, Jr. President

STRATEGIC FUTURES AND OPTIONS, INC. STATEMENT OF FINANCIAL CONDITION September 30, 2001 ASSETS ------------------------------------------------------------------------------------------------------------------------------ Current Assets Cash $ 248 Commissions receivable from clearing firm 22,978 ---------------- Total current assets 23,226 ---------------- Equipment, at cost Computer equipment 986 Less accumulated depreciation 197 ---------------- 789 ---------------- Total assets $ 24,015 ================ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Due to related party (Note 4) $ 8,043 Accounts payable 3,300 Accrued expenses 10,119 Income taxes payable 600 ---------------- Total current liabilities 22,062 ---------------- Stockholders' Equity (Note 3) Common stock, par value $0.01 per share; authorized 1,000,000 shares; issued 100 shares 1 Additional paid-in capital 999 Retained earnings 953 ---------------- 1,953 ---------------- $ 24,015 ================

STRATEGIC FUTURES AND OPTIONS, INC. STATEMENT OF OPERATIONS Period From January 22, 2001 (Date of Inception) to September 30, 2001 ------------------------------------------------------------------------------------------------------------------------------ Revenues: $ 80,970 ---------------- Commissions earned Expenses: Commissions 39,883 Salaries and wages 1,615 Management fees (Note 4) 32,000 Printing 4,261 Depreciation 197 Other 1,461 ---------------- 79,417 ---------------- Income from operations before income taxes 1,553 Income taxes 600 ---------------- Net income $ 953 ================

STRATEGIC FUTURES AND OPTIONS, INC. STATEMENT OF STOCKHOLDERS' EQUITY Period From January 22, 2001 (Date of Inception) to September 30, 2001 ------------------------------------------------------------------------------------------------------------------------- Common Stock ------------------------------ Additional Number of Paid-In Retained Shares Amount Capital Earnings Total ------------------------------------------------------------------------ Balance, January 22, 2001 (date of inception) - $ - $ - $ - $ - Issuance of common stock 100 1 999 1,000 Net income - - - 953 953 ------------------------------------------------------------------------ Balance September 30, 2001 100 $ 1 $ 999 $ 953 $ 1,953 ========================================================================

STRATEGIC FUTURES AND OPTIONS, INC. STATEMENT OF CASH FLOWS Period From January 22, 2001 (Inception) to September 30, 2001 ------------------------------------------------------------------------------------------------------------------------------ Cash Flows From Operating Activities Net income $ 953 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 197 Changes in assets and liabilities: Commission receivable from clearing firm (22,978) Due to related party 8,043 Accounts payable 3,300 Accrued expenses 10,119 Income taxes payable 600 ----------------- Net cash provided by operating activities 234 ----------------- Cash Flows From Investing Activities Purchase of equipment (986) ----------------- Net cash used in investing activities (986) ----------------- Cash Flows From Financing Activities Proceed from issuance of common stock 1,000 ----------------- Net cash provided by financing activities 1,000 ----------------- Increase in cash and cash equivalents 248 Cash Beginning - ----------------- Ending $ 248 =================

Strategic Futures & Options, Inc. Balance Sheet June 30, 2002 -------------- ASSETS Current assets Cash $ 494 Commissions receivable 40,362 Prepaid expenses and other current assets 10,416 -------------- Total current assets 51,272 Property and equipment Computer equipment 986 Less accumulated depreciation 434 -------------- Net property, plant and equipment 552 -------------- $ 51,824 ============== LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities Accounts payable $ 16,477 Income taxes payable 1,600 Accrued liabilities 30,366 -------------- Total current liabilities 48,443 Shareholder's equity Common stock - par value $.01, 1,000,000 shares authorized 100 shares issued and outstanding 1 Paid-in capital 999 Accumulated earnings 2,381 -------------- Total shareholder's equity 3,381 -------------- $ 51,824 ==============

Strategic Futures & Options, Inc. Statement of Operations For the Nine Months Ended June 30, 2002 Commissions earned $ 187,703 Operating expenses Commissions 71,213 Salaries and wages 32,638 Payroll taxes 11,151 Management fees 41,260 Advertising and printing 15,928 Depreciation 237 Licenses 1,985 Other 3,155 Postage 7,707 -------------- Total operating expenses 185,274 -------------- Income before income taxes 2,429 Provision for income taxes 1,000 -------------- Net income $ 1,429 ==============

Strategic Futures & Options, Inc. Statement of Cash Flows For the Nine Months Ended June 30, 2002 Operating activities Net income (loss) $ 1,429 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 237 Changes in operating assets and liabilities: Commissions receivable (17,384) Accounts payable 13,177 Other assets and liabilities 2,787 -------------- Net cash provided (used) by operating activities 246 Investing activities - -------------- Net cash used in investing activities - Financing activities - -------------- Net cash provided (used) by financing activities - -------------- Net increase in cash 246 Cash - beginning of period 248 -------------- Cash - end of period $ 494

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