| SUMMARY
• FTS Group operates seven retail wireless locations that market
and sell next generation wireless products and services and operate
Wi-Fi HotSpot's
• The company recently announced its fourth consecutive quarter
of revenue increases of more than 100% in its form 10K filed with
the SEC
RAPIDLY GROWING MARKET
• 85.6% of US consumers are still using a landline as their
primary phone
• 26.4% would consider replacing it with a wireless phone
• Demonstrating a significant potential for wire-line displacement
over the next five years according to a recently published report
by high tech market research firm In-Stat/MDR titled "Cutting the
Cord"
Address: FTS Group,
Inc. (filed as FTS Apparel), 1049c Oxford Valley Rd., Levittown, Pa
19057
Company contact:
Scott Gallagher, CEO, 215-943-9979, SG@FTSWireless.com
Web Site: http://www.ftswireless.com
State or other jurisdiction
of incorporation or organization: Nevada
Independent Auditors:
R. E. Bassie & Co.
Investor contact:
Cinapsys, Todd Gilligan, 949-497-6684, todd@cinapsys.com
TARGETED GROWTH STRATEGY
• FTS is implementing a combined organic growth and acquisition-based
roll-up strategy
• Designed to regionally consolidate the highly fragmented cellular
phone and wireless services industry
• Each retail wireless location is to become a Wi-Fi Hotspot,
from which the company markets and distributes satellite and
cellular based wireless products
• Wi-Fi Hotspots allow retail and business wireless customers
to connect to the Internet through FTS's Wi-Fi network
• By using a wireless device such as PDAs, laptops or a cellular
phone located within 500 feet from each of FTS's wireless locations
• FTS focuses on three east-coast markets: Florida's Gulf
Coast market, New Jersey and Pennsylvania's Philadelphia
market.
CURRENT OPERATIONS
Location
expansion
• FTS Wireless currently operates six retail wireless locations
in the Florida Gulf Coast region and one location in the Philadelphia
suburban market
Voice and
data
• FTS distributes Wi-Fi (wireless fidelity) products and services
• Using FTS retail outlets from which to launch the platform
• The company is in the process of converting all Hot Spot locations
into a new "pay per use" business model.
• The new arrangement will allow customers access to more then
1000 Hot Spot locations in North America and Great Britain.
Content
Portal
FTS plans to launch a new mobile content portal site during the second
quarter of 2004, to provide industry leading content.
Internet
Partnership
• Recently signed a partnership agreement with Internet-based
wholesale membership club Onlinesupplier.com (Online), whereby FTS
will become an Online preferred distributor of wireless communications
hardware, cell phones, pre-paid calling cards and satellite phones.
• Onlinesupplier.com recently surpassed 25,000 members serviced
and currently has over 13,000 paid monthly members and over 7,000
merchants with e-commerce storefronts.
THE WIRELESS INDUSTRY (POST-PAID)
Market growth
• According to market research firm Euromonitor, in a report
released in July 2003,in 2003 the cellular/PCS sector totaled US$3.8
billion, and is expected to reach US$5.1 billion by 2007, a growth
of nearly 34% over 2003.
• In 2002 more than 50% of the U.S. population owned a cellular
phone.
• Out of all owners of wireless phones, 56% owned their phone
for more than a year, and 42% plan on changing their phone within
the next six months. 85% of current wireless consumers said they want
a mobile phone that can also take and exchange photographs.
Wireless
networks upgraded and offer new features -- good for FTS
Upgrading of the wireless networks capabilities, and the introduction
of data in the form of photos, music, and wireless Internet to the
communication network has shifted the image of wireless devices from
a luxury gadget to a business and entertainment tool.
Customer
churn -- good for FTS
Customer churn is defined as the number of clients who cancel their
contract with the carrier prior to the end of the term. Churn rates
have continued to grow in recent years due to declining cellular plan
pricing. In addition, the implementation of local number portability
that took place in November 2003, is likely to increase churn.
Local portability -- good for FTS
Local number portability means customers can keep their phone number
when changing carriers. These developments may have a positive effect
on FTS's cellular operations by presenting customers with more flexibility
when choosing a carrier and increase the rate of new activations.
THE WIRELESS INDUSTRY (PRE-PAID)
Market growth
In a report published in February 2003, industry research firm Atlantic-ACM
forecasts that the prepaid wireless segment will grow from $4.4 billion
in 2003 to $9.5 billion in 2007.
No contract
Pre-paid customers typically do not sign a contractual agreement with
a cellular carrier. They typically buy airtime in $20 to $100 denominations
at a higher per minute rate than most "Post-Pay" plans. FTS believes
the pre-paid wireless segment will grow substantially in the next
several years and that it can profit from this trend.
Relatively
untapped market -- good for FTS
• One untapped market is 18 to 24 year olds, who have a higher
propensity to buy phones than the population as a whole, as penetration
levels in this segment are comparatively lower." In 2002, 18 to 24
year olds purchased 16% of all handsets, while in the meantime, the
demographic group accounted for only 10% of the total U.S. population.
• The 18 to 24 group is also particular in the way they relate
to their phones. They are more likely to buy on impulse, they spend
more on a phone, and they are more likely to base purchase decisions
on product appearance compared with older groups.
• Based on these statistics and the growing trend of young adults
who now use their wireless phone as their only form of telecommunication,
FTS believes an above average opportunity exists for to target this
market.
PRODUCTS & SERVICES
Product
sales
• FTS sells cellular and satellite handsets, cellular accessories
and other related wireless products such as Wi-Fi service and related
access equipment
Post-paid
services
• FTS provides post-paid wireless activations, where customers
sign contracts. FTS provides cellular and satellite activations for
major wireless carriers such as T-Mobile, Sprint, Nextel and GlobalStar,
four of the nation's top six wireless carriers
Pre-paid
airtime and cellular handsets
• FTS supplies pre-paid minutes, where customers do not sign
contracts and pay a higher per-minute rate
• Master Agent -- FTS functions as a Master Agent for Air Voice
Wireless products and services in the New Jersey and Philadelphia,
markets in addition to selling Air Voice Wireless products at the
retail location in the Philadelphia market. In Florida's Gulf Coast
market FTS functions as a Master Agent, in addition to selling Air
Voice Wireless products at each of its retail locations.
Value-added,
wireless service to increase foot traffic
• FTS provides users (within 500 feet) the ability to access
the Internet or make phone calls using 802.11 or Wi-Fi technology
based devices such as PDAs, laptops and cell phones.
• To increase store foot traffic, which may increase sales and
activation of wireless products
Web site
• FTS also targets customers worldwide through its Web site,
http://www.Cellulardeals.com.
SEASONALITY
The wireless industry typically generates a higher number of subscriber
additions and handset sales in the fourth quarter of each year compared
to the remaining quarters. This is due to the use of retail distribution,
which is dependent on the holiday shopping season; timing of new products
and service introductions; and aggressive marketing and sales promotions.
COMPETITION
• The retail wireless market is very fragmented and highly competitive.
• There is no one dominant competitor in FTS's markets.
• FTS's competitive strategy is to offer a more diverse line
of wireless products and services than competitors including Wi-Fi
networking products,, satellite phones and a large variety of Pre-Paid
cellular products.
EQUITY LINE OF CREDIT
• FTS believes its Equity Line of Credit with Dutchess Private
Equities Fund, LP and cash flows generated from operations will allow
it to fully execute the basic components of its 12-month strategic
plan outlined above.
• To learn more about the equity line of credit please visit
the SEC filing at
http://www.sec.gov/Archives/edgar/data/1062663/000123174204000115/doc1.txt
DIRECTORS AND MANAGEMENT
Scott Gallagher
Has served as Chairman, President and Chief Executive Officer since
January 11, 2002. Prior to joining the company, and since 1999, Mr.
Gallagher had served as the president of About-Face Communications,
LLC, a privately held business consulting firm located in Yardley,
Pennsylvania. Prior to founding About-Face Communications, LLC, Mr.
Gallagher was the chief investment officer and a general partner with
the Avalon Stock Fund, a private hedge fund based in New York City.
Prior to co-founding Avalon Stock Fund, from 1995 to 1999, Mr. Gallagher
was a branch manager and founder of the Langhorne, Pennsylvania office
for Scottsdale Securities, Inc., a national brokerage firm based in
St. Louis, Missouri.
David R.
Rasmussen
Has served on the board of directors since February 10, 2002. He has
been in the information technology field since 1992. Since 2000, Mr.Rasmussen
has served as a Project leader for ERC, Inc., a subsidiary of General
Electric. In his current position he provides IT solutions that enable
business to drive core processes and grow profitable relationships.
From 1997 through 2000 Mr. Rasmussen worked as a program analyst for
National Association of Insurance Commissions. Mr. Rasmussen received
a Bachelor's degree in Computer Technology from Rockhurst University
in Kansas City Missouri. Mr. Rasmussen is a six sigma certified Green
belt.
Linda Ehlen
Has served on our board of directors since February 7th, 2004.
Since 1995, Ms. Ehlen has served as the Chief Financial
Officer of Casa Comieda, Inc., a company involved in the restaurant
business. From 1981 to 1995, she was a principal and controller for
Livingston Oil Corp. Ms. Ehlen earned her Bachelor's Degree
in Accounting from Monmouth University, Rutgers
School of Government and Accounting.
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