Common Stock being offered..................  3,000,000 shares 

Common Stock to be outstanding after the 

offering....................................  12,550,000 shares(1) 

                                              Pay for, develop and deploy AT&T switching 

                                              equipment; finance marketing activities of 

                                              partitions; payment of $4,500,000 in connection 

                                              with the Reorganization (as defined herein); 

                                              finance customer conversion costs; and other 

Use of proceeds.............................  corporate purposes, including working capital. 

Nasdaq National Market Symbol...............  TALK 

                                                                  

Initial public offering price per share......................           $13.75 

 Net tangible book value per share before the offering.......  $ 2.21 

 Pro forma reduction to stockholders' equity((1))............   (3.18) 

 Increase attributable to new investors......................    3.26 

Pro forma net tangible book value per share after the 

 offering....................................................             2.29 

Dilution per share to new investors. $11.46 
 and thats at the $13.75 price 
in short from that time on all future investers pay a premimum of 11.46 to buy this stock..
----------------------------
odd how people toss their money down and don't even read the
big print, recent survey shows that 80% of buyers never read
the prospectis. This is a Tel-Save is a scam, a type of front for
AT&T to undercut prices with out getting blamed for it, and
the insiders and underwirters have a cinch on makeing some big
bucks even if she sells for $3 share..let alone the $20 she
jumped too..
I notice they don't sell the public any options !or I would
load up with puts.
---------------------
 <p>To date, the Company has marketed services by emphasizing its use of 

AT&T's network and billing services. The Company expects to begin providing 

service on OBN in the first quarter of 1996. As a result of deploying OBN, 

the Company will be required to reduce its emphasis on AT&T in its marketing. 

The Company expects that certain of its current partitions and end users will 

cease or reduce purchasing services from the Company after it deploys OBN. 

The Company will attempt to limit such attrition by continuing to offer 

services on the AT&T network and by employing the billing services of AT&T 

and ACUS, a wholly owned strategic business unit of AT&T. However, there can 

be no assurance that a significant number of partitions and end users will 

not change their long distance company. The loss of, or reduction in 

purchases by, a significant number of end users could have a material adverse 

effect on the Company's financial condition or results of operations. In the 

quarter during which the Company implements OBN, the Company may experience 

reduced growth in, or even lower, revenues as a result of the factors 

discussed above. 



  <p> As a result of deploying OBN and reducing the emphasis on utilizing AT&T's 

network in its marketing, the Company's ability to attract new end users may 

be adversely affected. Additionally, the Company must either select from 

AT&T's published tariffs for fiber transmissions or negotiate new tariffs 

with AT&T to secure transmission facilities. There can be no assurance that 

the Company will be able to secure or maintain such tariffs at cost effective 

rates. To the extent that the Company, rather than AT&T, is responsible for 

providing its network services, the Company's potential liability increases 

if such services are not provided. 



   <p>In order for the Company to provide service over OBN, the Company will 

install and operate, and be responsible for the maintenance of, its own 

switching equipment. The Company currently does not own switching equipment 

and its employees have limited experience operating as a switch based 

carrier. There can be no assurance that the Company will be successful in 

operating as a switch based carrier once it installs such equipment. 



  <p> Additional management personnel and information systems will be required 

to support OBN, the costs of which will increase the Company's overhead. Any 

delay or difficulties in hiring personnel or developing systems could 

adversely affect the implementation of OBN. See "Business -- The Network." 



<p>RELIANCE ON INDEPENDENT CARRIERS AND MARKETING COMPANIES; 

LACK OF CONTROL OVER MARKETING ACTIVITIES 



  <p> The Company markets its services primarily through a network of 

independent carriers and marketing companies known as "partitions," each of 

which has entered into a non-exclusive agreement with the Company. Partitions 

generally receive, as compensation, the difference between the amounts re 



                                         





ceived by the Company from the end users and the amount charged by the 

Company to the partitions for providing such service. The end users of these 

partitions accounted for approximately 80% of the Company's revenue in 1994. 

The remaining 20% of the Company's revenues was generated primarily through 

sales of inbound "800" service with commissions generally paid to the agents 

of the Company; included in this 20% are sales made by partitions for which 

they received a commission rather than compensation through the partition 

arrangement described above. The only distinction between partitions and 

agents is that partitions are paid pursuant to partition arrangements, 

whereas agents are compensated through commissions. There is no distinction 

between the end users of sales from partitions versus the end users of sales 

from agents. In the event that the Company loses access to AT&T's network or 

billing services, its agreements with partitions would terminate and the 

Company would have to obtain new partition agreements. The Company will, in a 

majority of cases, be required to amend its existing partition agreements in 

order to provide services through OBN. There can be no assurance that all 

partitions will agree to so amend their agreements with the Company. 

Historically, partitions of the Company have amended their partition 

agreements in connection with changes in the Company's service offerings, 

which related primarily to pricing. There have been no material losses of 

partitions or end users in connection with such amendments. Over the 12 

months ended June 30, 1995 no partition accounted for more than 10% of the 

Company's revenues. In the event that one or more major partitions were to 

cease doing business with the Company, the financial condition or results of 

operations of the Company could be adversely affected. 
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There is more much more, and none of it looks good to me
JIm