****PRESIDENTS MESSAGE****
(this was the first post but was not highlighted as such)
Dear Shareholder or Franklin Visitor:
Happy New Year! I've been a businessman for
many years and a practicing engineer for even
longer . . . and I can't remember ever
beginning a new year with more anticipation or
optimism! Every direction I look at Franklin,
there's something new and exciting going on.
Sales on our traditional products remain brisk.
Our production ramps are up and running.
The D-Mark Channel Bank keeps finding its
way into new corporate markets, from Fortune
500 giants down to modest but savvy ISP's.
1997 has been the target year for seeing
FNet-complete with a full complement of
added value features-launched onto the
American business scene as a stand-alone
public company. (It's almost impossible to
believe that a year ago, FNet was still in the
'gleam in the eye' stage!) However, once
again FNet is caught up in a whirlwind of
growth which far outstrips our forecasts,
thanks to the availability of our Flat Rate 800
Number Service, which is unique to the
industry.
One additional offshoot of the current 800 #
explosion is that FNet has become one of
Franklin Telecom's biggest customers for
Channel Banks, as we expand our
infrastructure to accommodate demand.
Fortunately, we expect the new Cyclone to be
available for use within the next 60-90 days.
This will be a great way to launch what we
anticipate to be one of Franklin's all time best
selling product lines!
We have active joint ventures already
underway to facilitate continued development
of the Cyclone line through the next several
generations. We are now working to arrange
appropriate marketing and distribution
channels to maximize the Cyclone's impact.
Watch for news of additional acquisitions and
alliances which can be announced during the
next few weeks.
In short, Franklin is poised to take 1997 by
storm! Welcome aboard.
For more details on what's happening, keep
reading!
The Vision:
We envision Franklin building our worldwide communications company to offer
products made of proprietary software and hardware sold by FTEL which are extremely
hard to copy and, services provided by FNet which are unique to FNet subscribers
worldwide.
Franklin Telecom will design and build the hardware and software.
FNet will sell services and hardware products from FTC and others.
There is a manufacturing license which links FTC & FNet.
The products and their development are the continuation of a plan which we have
followed for many years. If you would like to learn more about FTEL and our 17 year
history, click here.
CURRENT EVENTS:
We are now poised to take FNet to the public so we can make our dreams
(and 5 years of planning!) come true.
The Financial Plan consists of 3 steps:
Raise $1,000,000 via a Private Placement of FTEL shares to fund FNet and to
buy parts for the FTC D-Mark Channel Bank and Cyclone products. Finished
Sept. 1996.
Raise $10,000,000 via a Private Placement of FNet shares at $1.00 per share to
finish the design and acquire certain software assets to complete the Franklin
Data Voice Server. (DVS). Underway
1.Raise $100,000,000 via a public offering of FNet at a pricing range of $10 to $15
per share to grow the operation and deploy the DVS in 25+ countries. In
Preparation
CURRENT EVENTS:
PROJECT WE HAVE UNDERWAY:
1.Since the recent introduction of the new advanced unit, D-Mark Channel Bank
sales have taken off! We have shipped more D-Mark's in the last 30 days than the
entire history of the product. We began shipping the new 8 port analog MVIP buss
card (ICV8) last month with great success. We also designed a brand new telco
combination DC power supply and Ringer which further reduces the cost of the
product. The R&D for this was done in the last quarter of FY96 ending June 30,
1996. These units range from $3,500 to 5,000 in price while the competition runs
$7,000 to $10,000 for equivalent features. However, probably the most pressing
advantage is ease of installation and operation. ISP's and others who want and
need to take advantage of the new T1 pricing nation wide can be up and running in
an hour instead of the usual 3 days.
2.Joint Venture with StarComm (70% FTC - 30% SC) to produce the Cyclone. This
product consists of the D-Mark Channel bank T1 card, most of the D-Mark
Channel Bank Software, modified for the Cyclone plus the new Franklin ICM8 card
which is a joining of the D-Mark Channel Bank Analog 8 port Voice card and 8 -
V.34 modems from StarComm designed into one board which can be upgraded in
the future to the new Rockwell 56k technology. The result is a unit which will
accept up to 4 T1 spans and deliver 24 Modem out puts per T1. We have
redesigned the system from the ground up to make it feature rich and have still
reduced the parts cost by 50%. We will also add Simple Network Management
Protocol to the system.
3.FNet went National in September with a contract with GridNet division of World
Com. The results have been fewer than expected new customers. We identified
the problem as our pricing at $19.95 for 15 hours. We have now launched a new
ad campaign aimed at the mass market offering $15.00 unlimited use for a 6
month sign-up (special offer good until December 31, 1996), without a web page.
We will continue to charge our local customers $19.95 including a web page.
4.Production ramp up for the D-Mark Channel Bank. We are now in full swing
and orders are flowing in. U. S. Robotics, Sysnet and several new customers
continue to order the D-Mark.
5.Production ramp up for MPP products. (There are 3 system products). The
three largest orders were from Revco for $100,000 and $400,000 and from
Gandalf UK and Raytheon for the FAA "Stars" program. (We don't have this final
contract in hand but we do have the orders.) The Stars program will re-outfit 500
airports - both FAA and Department of Defense Military Airports. Franklin's product
is used to process radar data and each airport can require from two to four
systems. I can't discuss our selling price but the Stars Program requires
production Capabilities and Commitments for ten years - through the year 2005.
6.Filing of SEC Form 10 (once the Audit is completed). This will result in a return to
quarterly reporting status.
7.SEC attorneys are proceeding with Three projects 1) Form 10 & Audit. 2)
Registration Statement for warrant holders and 3) FNet IPO documentation
preparation.
Franklin is bursting at the seams with orders and prosperity! Thanks for stopping
by our Web Site.
-- Frank W. Peters |
