UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                    000-29743
                            (Commission file number)

                         TEL-VOICE COMMUNICATIONS, INC.
        (Exact name of small business issuer as specified in its charter)

                  Nevada                                  88-0409143
       (State or other jurisdiction                      (IRS Employer
     of incorporation or organization)                Identification No.)

                       8283 NORTH HAYDEN ROAD, SUITE 250,
                      SCOTTSDALE, ARIZONA 85258 (Address of
                        principal executive offices) (Zip
                                      Code)

                                 (480) 368-8080
                           (Issuer's telephone number)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                               TITLE OF EACH CLASS
                          COMMON STOCK, $.001 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate  by check  mark if there  is no  disclosure  of  delinquent  filers  in
response to Item 405 of  Regulation  S-B is not  contained in this form,  and no
disclosure  will  be  contained,  to the  best  of  registrant's  knowledge,  in
definitive  proxy or information  statements  incorporated by referenced in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]

Revenue for the year ended December 31, 2000:  $165,000

There is currently no market for the  registrant's  Common Stock.  The number of
shares  outstanding  of the  registrant's  Common  Stock as of July 31, 2001 was
5,825,895.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (check one):  Yes [   ]   No [X]

<PAGE>


                                     PART I

This Annual Report on Form 10-KSB contains statements that are  forward-looking,
including  statements  relating  to  anticipated   operating  results,   growth,
financial  resources,  the  development  of new markets,  the  development,  and
acceptance  of our  business  strategy  and new  applications  for our  existing
products.   Investors  are  cautioned   that,   although  we  believe  that  our
expectations  are based on reasonable  assumptions,  forward-looking  statements
involve  risks and  uncertainties  which may affect our business and  prospects,
including changes in economic and market conditions, acceptance of our products,
maintenance of strategic alliances and other factors discussed elsewhere in this
Form 10-KSB.

Item 1. DESCRIPTION OF BUSINESS

BACKGROUND

Tel-Voice Communications,  Inc. ("Tel-Voice") was incorporated under the laws of
the State of Nevada  on  December  31,  1996 to engage in any  lawful  corporate
activity,  including,  but not limited to,  selected  mergers and  acquisitions.
Smartdotcom,  Inc.  was  incorporated  under  the laws of the State of Nevada on
April 19, 1999. On June 30, 2000,  Smartdotcom  became a wholly owned subsidiary
of Tel-Voice through a reverse merger.  Tel-Voice issued 4,376,895 shares of its
common  stock all of the issued and  outstanding  common  stock of  Smartdotcom.
Prior to the merger, Tel-Voice had no business activity and therefore, pro forma
operating  results as if the acquisition had taken place at the beginning of the
periods  presented have not been presented.  Smartdotcom has been treated as the
acquirer and accordingly, Smartdotcom is presented as the continuing entity, and
the historical financial statements are those of Smartdotcom.

OVERVIEW

We are an all-inclusive  telecom,  video,  Internet,  entertainment and security
provider. We are in the business of enhancing the lives of our subscribers,  who
benefit from the added value of  high-quality  services  and a fully  integrated
system made available by a single  company.  Subscribers are afforded the luxury
of accessing  these  services using state-of  the-art  technology  that includes
hardware, software and network connectivity.

Our  management  team  includes  experts  in the  fields of  telecommunications,
technology, Internet protocols, interactive programming, marketing, and finance.
Our senior  executives are experienced in managing virtual  companies,  and have
many successes to their collective credit. One of our goals is to keep our staff
count to a minimum,  by  utilizing  the  contract and  consulting  markets.  The
structure  of our Company  positively  influences  performance  and nurtures the
strengths of our management team and support staff.

                                       1
<PAGE>

Multinational  Fortune  500  companies,  in  conjunction  with a select  project
management team,  provide our operations and on-site  service.  Our door-to-door
service and warrantee repair will be unsurpassed by any other companies offering
similar services.  Our financial model is predicated on transaction  revenue and
subscriber fees. In fact, only minimal cash flow is actually  generated  through
consumer-direct   equipment  sales.   Our  business   features  every  important
characteristic   of  a  technology  and  telecom   investment,   making  us  the
prototypical success recipe.

INTERNET/INTRANET

At the core of our business are our advanced,  community Intranets. Each private
network  showcases our fundamental goal of providing high quality  entertainment
and communications  content in a simple and unassuming fashion.  Point and click
capability is the underlying principle on which the secure networks are modeled.

Our Intranets are private  networks,  available  only to our  subscribers.  They
incorporate  several  levels of redundancy  that allow for  constant,  dedicated
service.

Living and working  on-line using the Internet  raises many security issues that
can be immediately avoided by way of private networking. This advantage is given
to our subscribers.  Our private network  incorporates a double firewall system,
so that users have only one door into the network  and one door out.  Logging on
the system makes all of our services instantly available.

We  are  also a  content  provider.  Once  logged  off  the  community  network,
subscribers  may  access the  Internet  and a host of  special  offerings,  over
multi-speed  connections.  Subscribers  enjoy the benefit of  exclusive  network
content and global Internet service.

E-COMMERCE

Our  community  network  is able to meet all of the  consumer  demands  that are
currently  fueling  web-based  e-commerce.  In  practice,  subscriber  group and
community profiles allow us to exceed any conventional market offerings. Through
the collective ability to provide high-end services, developers, labor networks,
and business networks all participate in revenue sharing with us.

When subscribers  utilize our Intranet,  their financial  transactions cannot be
compromised.  An accredited FDIC financial  institution manages all settlements,
and all transactions are routed through encrypted,  cached server  architecture.
The system is closed, private, and therefore, totally secure.

SUBSCRIBER BASED

All our services  are designed  with a  subscriber-based  audience in mind.  The
ability to connect  various devices and  technologies  to a collective,  private
network  produces a marketable  advantage for our members.  Our  subscribers can
activate single-sourced offerings on the go, at home, and on the job.

                                       2
<PAGE>

As the subscriber base expands, the revenue generated by us for our self and our
partners grows incrementally.  This value is inherent and may be recognized as a
strong purchase  opportunity for telephone,  cable, and Internet companies.  The
subscriber   feels  our  value  in  the  quality  of   offerings,   ease-of-use,
consolidated service sourcing, and affordability.

INTELLECTUAL PROPERTY

We are postured to take advantage of current as well as future technological and
proprietary  offerings.  Since new peripheral  devices can be simply and quickly
integrated  into the system,  the kind of services  available to our subscribers
evolves in concert with the latest technology as it becomes available.

We are our own vehicle for seeking our high-end  technology  and  delivering the
resulting gadgets to our subscribers in a user-friendly  package.  Our future is
based on our inventory of  intellectual  property,  and the ability to implement
the tangible end products.

INTEGRATED COMMUNITIES

Residents in a Tel-Voice  integrated  community  enjoy the latest  technology to
enhance everyday living and create a very secure living environment. The primary
features of their services  include the  SmartFone,  SmartCable,  SmartNet,  and
SmartSafe security systems.

SmartFone
---------

Each villa is equipped  with a SmartFone  connected to the  building's  internal
network.  In addition,  the phone allows access to the Internet and many special
"community  sites." The SmartFone enables the use of our reduced rate, local and
long  distance  service.   The  SmartFone  comes  with  a  standard  phone  line
connection;  a  second  line is  available  as an  option  for  those  who  want
simultaneous data and voice capability.

SmartCable
----------

Each villa also contains a set top unit  connected to the  television  providing
enhanced basic services  including local and national network  programming,  pay
per view  video and other  pay per use  programs.  Each set top unit is set with
monitoring  capabilities for the villa owners to view the lobby and other common
areas  covered by the security  systems  cameras.  The use of the one-way  video
monitoring  can be limited in certain  areas as required.  The basic  SmartCable
offering is equal to present day premium cable.  SmartCable  Plus service offers
"satellite"  quality  programming.   SmartCable  services  can  be  upgraded  to
SmartCable Plus for a few dollars more per month. Each offering is substantially
enhanced as compared to the current providers of same service features.

                                       3
<PAGE>

SmartSafe
---------

Multiple  cameras  installed in  strategically  positioned  locations  offer the
on-site staff complete  access to any activity  around the building or area. The
number of cameras  installed  can meet or exceed  the  standards  and  protocols
contained  within today's most highly secured living  centers.  Magnetic  access
cards enable the homeowner to open and operate the  elevators,  stairway  doors,
front doors,  garage doors,  wine cellar or any other common area doorways.  The
appropriate  owner  and  occupant  may also use the card to gain  access  to the
individual unit.  Information pertaining to the time and dates of access as well
as any other charges relating to the use of certain  facilities are captured and
stored within the access card program.

All villas are equipped with entry detection from windows and doors, smoke, fire
and water level  detection.  Security  control is available on the  SmartFone as
well  as a  separate  wireless  keypad,  for  easy  access  and  emergency  call
capabilities.

Access  to and from the  garage is aided by a one-way  video  connection  to the
front desk and other villa management staff.

An asset  tracking  system is an optional  installation  providing the residents
with monitoring and tracking features to secure children, animals and valuables.
This  feature  sounds an alarm if any  individual  or item  leaves the  building
boundaries without being deactivated by building staff.

Our  security  system  architecture  includes  proprietary  and  non-proprietary
hardware,  customized  and standard  software.  It is designed to be  unassuming
while still functioning at the highest level of home and personal safety.

Expert  consultants begin the solution design with a security  reference report,
followed by implementation of a hardware scheme, and completed with professional
installations.

SmartNet
--------

Installed in each unit is a high-speed  connection (DSL or T1 equivalent) to the
Internet in addition to a network connection for the community Internal Net. The
internal  network offers shopping  specials,  entertainment  features,  sporting
events and other community specific  information.  The villa owner has access to
the network with the  SmartFone  and/or a PC connection  (optional).  A specific
homeowners  association  site allowing  access to account  information,  payment
programs,  loyalty services,  and other community services, is made available to
all homeowners. The SmartNet system provides connectivity to neighbors, friends,
as well as building staff and management


                                       4
<PAGE>

Our dynamic call center contact solution enables instantaneous  interaction over
Web sites and  SmartNet.  Our  solution  facilitates  online  sales  (meetings),
customer service, and remote Web-based tech support.

Connect - Customers or prospects can instantly contact a call center agent.
-------

Communicate - Call center agents personalize the call with Video, Voice, & Chat.
-----------

Collaborate - Call center agents enrich the call by sharing desktop applications
-----------
(both ways) and aiding navigation through co-browsing.

1-866-UNIONET

1-866-Unionet  is our  private  network,  customized  for more  than 17  million
potential  labor  union  subscribers.   Once  deployed,  this  multipurpose  and
interactive network will generate on-going revenue for our partners and us. This
network  also  incorporates  sponsor  participation  with a potential  of over 3
billion advertising dollars.  This model is representative of all our solutions,
including  our  integrated   communities,   business  networks,  and  all  other
subscriber groups.

To develop the subscriber base from within the union membership, we will utilize
the SmartFone and other interactive  devices to connect subscribers to a private
and secure Intranet.  Offering members both an exclusive Intranet, and a gateway
for  Internet   access,   establishes  a  market  for  our  current  and  future
technologies.  Our unique technical  infrastructure  allows simple "plug & play"
flexibility. This feature enhances our ability to offer many devices to multiple
markets.

1-866-Unionet's  network design offers cost effective scalable services.  Unions
and labor  organizations  will have a  financial  stake in their own  technology
solution.  They will also take an active role in the operation  and  application
development  of their  network.  Initially,  subscribers  will be  introduced to
Intranet  screens  designed to benefit  advertisers  and sponsors (time specific
exposure).  While our  competitors  include many current ISP's and Telco's,  our
strengths lie in an advanced  marketing  plan, and being able to control our own
technology  and  networks.  To  further  solidify   1-866-Unionet  as  a  "Smart
Solution," our team includes our existing  partners,  as well as union and labor
management,  marketing agents, and consultants.  North American customer support
programs,  technical  support,  and sales are then  sustained  via field service
teams.

NETWORK APPLIANCES

We offer our  subscribers  voice and video  services  that are  unparalleled  in
today's  marketplace.  In  keeping  with  the  philosophies  that  serve  as our
foundation,  our telephone and television  offerings are  consolidated.  Without
compromising  simple dial tone and cable access, one company with one vision can
deliver all the telephony and video  capabilities a home or office would need on


                                       5
<PAGE>

an easy-to-use, yet high-tech,  platform. This vision is carried out via "Smart"
devices  that are both wired and  wireless.  We feature  satellite  quality  and
content using a standard cable connection.  "Open" channels can be used to offer
special education and craft-related content to our subscribers, and no reception
dish is needed.  We are the "cable  company." As such, we can introduce  content
that is friendly to our markets, and revenue generating for our partners and us.

SmartFone - The  SmartFone is desktop  telephone  capable of  connecting  to the
---------
Internet,  sending and receiving email, voicemail and more. It is designed to be
extremely  easy to use.  The  screen  features  a  touch-sensitive  display  and
intuitive images.  SmartFone is a telephone,  answering  machine,  address book,
calendar,  Internet  browser,  and email  terminal.  It can also be  customized.
Implementation of our system empowers the SmartFone as a highly  adaptable,  and
flexible device.  In the same vein, all of our products offer limitless  content
and quality.

Once  powered on, the Welcome  screen will  appear.  Select the "log on" button.
Next,  the  "Select  User"  window  pops up allowing a choice of logging in to a
secure  1-866-Unionet  account, or as a Public User. To log on to 1-866-Unionet,
the user selects their personal ID -- myname@1866unionet.org.

If  selected,  the user is  prompted to supply a  password.  Each  1-866-Unionet
password is unique.  Once logged in to a  1-866-Unionet  account,  the SmartFone
home  page  will  appear.  From  this  home  page  the user  can  access  secure
1-866-Unionet email and messaging, the Internet, and much more.

If choosing to log in as a Public User, a password is not required. However, the
public home page will NOT allow access to email.

PF1500  Pager - The  Motorola  PF1500  Pager is the  prototypical  1-866-Unionet
-------------
device. Its 1.5 way response capability allows the subscriber to benefit from an
array of private network offerings. Besides numeric paging, included is news and
information that is both community  specific,  as well as general in nature. The
canned reply feature is ideal for eliciting user responses to polls,  votes, and
contest entries. As with every Tel-Voice network  application,  all transactions
are logged, reportable, and completely secure

T900 Pager - The T900 Pager has the following functions:
----------

     o    Reply Capability - Allows user to quickly reply to important  messages
          using the lighted QWERTY keyboard

     o    Info-on-Demand  -The user can request updated  information on traffic,
          movie show times,  etc. and have the information  sent directly to the
          device

     o    Confirmed Message Delivery -To ensure you never miss a message

     o    128K  Message  Memory - All the power and  capacity  you need to store
          information and word messages

                                       6
<PAGE>

     o    4-Line, 80 Character Display - So you can easily read word messages

     o    Optimax  EL  Electra  Light  Display  - For  optimum  readability  and
          exceptional clarity

     o    Content-Based  Duplication - Allows user to see only a single instance
          of  a  message  that  is  received   multiple   times.   (i.e.   voice
          mail-messaging system)

V2397 Mobile  Phone -  Mobile-originated  and mobile  terminated  SMS  messaging
-------------------
allows you to send,  receive and store short  alphanumeric  messages and has the
following features:

     o    Large,  easy-to-read  graphics  display  -2  lines,  with  1  line  of
          instructions

     o    Short Messaging  Service -Send,  receive and store short  alphanumeric
          messages

     o    Electronic  Phonebook - Allows you to attach an email  address to each
          of your 99 important contacts

     o    Quick Notes - Includes  pre-written text messages that you can create,
          edit, send, or delete.

     o    Multi-Language Support -English, Spanish, Portuguese,  French, Hebrew,
          Russian

     o    Smart  Button  -  To  simplify  accessing  feature  menus,  scrolling,
          selecting functions and placing calls

     o    Pager  Mode - Allows  for  numeric  messages  to be sent and  received
          through the phone

     o    Caller  Line ID - With  time  and date  stamp,  allows  you to  screen
          incoming calls

SmartCable  Receiver - We offer limitless  content and satellite quality picture
--------------------
(no dish required) using existing infrastructure.  By utilizing our set-top box,
subscribers choose from 500 open television  channels,  offering local broadcast
programming,  games, pay per view, pay per use,  satellite quality and community
targeted  programming (local sports,  events, etc.) Future directives will allow
our subscribers to experience interactive television using the SmartFone.

EMPLOYEES

As of July 31, 2001, we employed 4 full time individuals.  Our employees are not
unionized, and we consider our relations with our employees to be favorable.


                                       7
<PAGE>

Item 2. DESCRIPTION OF PROPERTY

We lease our principal  executive office which is located in a 1,227 square feet
office facility in Scottsdale,  Arizona at an annual rent of $26,994. This lease
will expire in May 2004.


Item 3. LEGAL PROCEEDINGS

The Company is not involved in any material pending legal proceedings.


Item 4. SUBMISSION OR MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable


                                     PART II


Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is currently not traded on any exchange.

RECORD HOLDERS

As of July 31, 2001 we had 66 shareholders of record.

DIVIDENDS

We have  never  declared  or paid any cash  dividends  on our common  stock.  We
currently  intend to retain  all  available  funds for use in our  business  and
therefore  does not  anticipate  paying any cash  dividends  in the  foreseeable
future. Any future determination relating to dividend policy will be made at the
discretion  of our Board of  Directors  and will  depend on a number of factors,
including the future earnings,  capital  requirements,  financial  condition and
future  prospects  and such  other  factors as the Board of  Directors  may deem
relevant.


Item 6.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

The following discussion and analysis should be read in conjunction with the our
consolidated  financial  statements  and  related  footnotes  for the year ended
December 31, 2000 included in this Annual Report on Form 10-KSB.  The discussion
of results,  causes and trends  should not be construed to imply any  conclusion
that such results or trends will necessarily continue in the future.

                                       8
<PAGE>

BACKGROUND AND OVERVIEW

Tel-Voice Communications,  Inc. ("Tel-Voice") was incorporated under the laws of
the State of Nevada  on  December  31,  1996 to engage in any  lawful  corporate
activity,  including,  but not limited to,  selected  mergers and  acquisitions.
Smartdotcom,  Inc.  was  incorporated  under  the laws of the State of Nevada on
April 19, 1999. On June 30, 2000,  Smartdotcom  became a wholly owned subsidiary
of Tel-Voice through a reverse merger.  Tel-Voice issued 4,376,895 shares of its
common  stock all of the issued and  outstanding  common  stock of  Smartdotcom.
Prior to the merger, Tel-Voice had no business activity and therefore, pro forma
operating  results as if the acquisition had taken place at the beginning of the
periods  presented have not been presented.  Smartdotcom has been treated as the
acquirer and accordingly, Smartdotcom is presented as the continuing entity, and
the historical financial statements are those of Smartdotcom.

We are an all-inclusive  telecom,  video,  Internet,  entertainment and security
provider. We are in the business of enhancing the lives of our subscribers,  who
benefit from the added value of  high-quality  services  and a fully  integrated
system made available by a single  company.  Subscribers are afforded the luxury
of accessing  these  services using state-of  the-art  technology  that includes
hardware,  software and network  connectivity.  Consequently,  we provide market
penetration and  incremental  revenue for our alliance  partners.  Multinational
Fortune 500 companies,  in conjunction  with a select project  management  team,
provide  our  operations  and  on-site  service.  Our  door-to-door  service and
warrantee  repair will be unsurpassed by any other  companies  offering  similar
services.   Our  financial  model  is  predicated  on  transaction  revenue  and
subscriber fees. In fact, only minimal cash flow is actually  generated  through
consumer-direct equipment sales.

We have  incurred net losses of $784,364  since  inception.  We may be unable to
continue in  existence  unless we are able to arrange  additional  financing  to
supplement our sale of common stock. We still continue to incur costs associated
with the development of our technology and implementation of our business plan.


PLAN OF OPERATION

Our  management  team  includes  experts  in the  fields of  telecommunications,
technology, Internet protocols, interactive programming, marketing, and finance.
Our senior  executives are experienced in managing virtual  companies,  and have
many successes to their collective credit. One of our goals is to keep our staff
count to a minimum by using contract labor and consultants.  We believe that our
structure  positively  influences  performance and nurtures the strengths of our
management team and support staff.

Our offering to our  subscribers  will include voice and video services that are
unparalleled in today's marketplace. In keeping with the philosophies that serve
as our  foundation,  telephone and television  offerings  will be  consolidated.
Without  compromising  simple dial tone and cable  access,  one company with one
vision can deliver all the  telephony  and video  capabilities  a home or office
would need on an  easy-to-use,  yet  high-tech,  platform.  This  vision will be


                                       9
<PAGE>

carried out via the  SmartFone and  SmartCable  services.  We feature  satellite
quality and content using a standard cable  connection.  "Open"  channels can be
used to offer special  education and  craft-related  content to our subscribers,
and no reception  dish is needed.  We are the "cable  company".  As such, we can
introduce  content that is friendly to our markets,  and revenue  generating for
our partners and us. With the near limitless capabilities of the SmartFone,  Our
telecommunications offerings can be as varied as the particular market demands.

Our future is based on our inventory of intellectual  property,  and the ability
to implement the tangible end products.  The patent and copyright processes that
establish  our  designs  as  proprietary  are  continuously  factored  into  our
financial projections and cash flow summary. There are no licenses required.

In the first  quarter of 2001, we obtained a  construction  contracts to install
our  communication  system in a building in La Jolla,  California.  We expect to
realize at least $820,000 in revenue from this  contract.  We are accounting for
this contract on the percentage of completion method.


RESULTS OF OPERATIONS

Year ended December 31,  2000 vs. December 31, 1999
---------------------------------------------------

Revenue for the year ended  December  31, 2000  increased by $43,000 or 35% from
$122,000  for the year ended  December  31, 1999 to $165,000  for the year ended
December  31, 2000.  The revenue  represents  consulting  fees  received  from a
project in La Jolla, CA where we are implementing our intranet  technology.  The
consulting fees received from this project ended in November 2000.

General  and  administrative  expenses  for the year  ended  December  31,  2000
increased by $348,061 or 100%from  $347,778 for the year ended December 31, 1999
to $695,839 for the year ended  December 31, 2000.  The increase is  principally
due to an increase in salary and employee benefits of approximately  $200,000 as
a result of  increasing  our  management  team and work force and an increase of
approximately $150,000 related to the cost of acquiring a public shell.

Interest  expense for the year ended  December 31, 2000 increased by $2,339 from
$0 for the year ended  December  31, 1999 to $2,339 for the year ended  December
31, 2000.  The increase is due to issuance of notes payable in 2000.  There were
no such notes payable in 1999.

LIQUIDITY AND CAPITAL RESOURCES

Subsequent  to  year-end,  we have been  successful  in  issuing  a  convertible
promissory  note for  $25,000  and have  issued a note  payable in the amount of
$100,000.  In addition,  in March 2001 we obtained a  construction  contracts to
install  our  communication  system in a building  in La Jolla,  California.  We
expect to realize at least $820,000 in revenue from this  contract.  As a result
of us being a public company  through the reverse merger that took place on June
30, 2000 and our intend to have the company listed on the OTC Bulletin Board, we
believe that we will be successful in raising  additional equity capital to fund
our  operations  so we can execute our business  plan. We believe that cash flow
from the recent  contract we were awarded and the expected  sales of  additional
equity capital will satisfy our cash need for at least the next 12 months.

                                       10
<PAGE>

FORWARD LOOKING STATEMENTS

This report contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. Stockholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of us develop our  technology  and execute our business
plan.  Although  we  believe  the  assumptions  underlying  the  forward-looking
statements  contained  herein are reasonable,  any of the  assumptions  could be
inaccurate,  and therefore,  there can be no assurance that the  forward-looking
statements contained in the report will prove to be accurate.


                                       11
<PAGE>



Item 7.  FINANCIAL STATEMENTS











                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999





                                       12
<PAGE>





                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS







                                                                       PAGE (S)

INDEPENDENT AUDITORS' REPORT                                              14

CONSOLIDATED BALANCE SHEETS                                               15

CONSOLIDATED STATEMENTS OF OPERATIONS                                     16

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY                        17

CONSOLIDATED STATEMENTS OF CASH FLOWS                                   18-19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              20-30










                                       13
<PAGE>


                          INDEPENDENT AUDITORS' REPORT




TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
TEL-VOICE COMMUNICATIONS, INC.:

We have  audited  the  accompanying  consolidated  balance  sheets of  Tel-Voice
Communications,  Inc.  and  subsidiary  as of December 31, 2000 and 1999 and the
related consolidated statements of operations, stockholders' deficiency and cash
flows for the years then ended. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as evaluating the overall  consolidated  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Tel-Voice  Communications,  Inc. and subsidiary as of December 31, 2000 and 1999
and the  consolidated  results of their operations and their  consolidated  cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
accompanying  consolidated financial statements,  the Company's recurring losses
from  operations,  negative cash flow from  operations and its negative  working
capital  raise  substantial  doubt  about its  ability  to  continue  as a going
concern.  Management's  plans in regard to these  matters are also  discussed in
Note 1. These consolidated  financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.

                                           /s/ Stonefield Josephson, Inc.
                                           ------------------------------
                                           Stonefield Josephson, Inc.
                                           Certified Public Accountants

Santa Monica, California
June 12, 2001



                                       14
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

                                                           2000          1999
                                                       ----------    ----------
                                ASSETS

CURRENT ASSETS
  Cash and cash equivalents                            $    1,457    $    2,424
  Stock subscription receivable                                 -         5,000
                                                       ----------    ----------
     TOTAL CURRENT ASSETS                                   1,457         7,424

FURNITURE & EQUIPMENT, net                                  1,493             -
                                                       ----------    ----------

TOTAL ASSETS                                           $    2,950    $    7,424
                                                       ==========    ==========

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

 CURRENT LIABILITIES
  Accounts payable                                     $   67,571    $    9,004
  Notes payable - stockholders                             17,500             -
  Accrued interest                                          2,035             -
  Due to officers                                         228,458       200,606
                                                       ----------    ----------
      TOTAL CURRENT LIABILITIES                           315,564       209,610
                                                       ----------    ----------

STOCKHOLDERS' DEFICIENCY
  Common stock, $0.001 par value;
    75,000,000 shares authorized;
    5,765,895 and 3,571,232 shares issued
    and outstanding                                         5,766         3,571
  Additional paid-in-capital                              465,984        45,429
  Accumulated deficit                                    (784,364)     (251,186)
                                                       ----------    ----------
     TOTAL STOCKHOLDERS' DEFICIENCY                      (312,614)     (202,186)
                                                       ----------    ----------

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY    $    2,950    $    7,424
                                                       ==========    ==========




See  accompanying   independent  auditors'  report  and  notes  to  consolidated
financial statements



                                       15
<PAGE>


                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                         2000            1999
                                                     -----------    -----------
     REVENUE                                         $   165,000    $   122,000

     GENERAL AND ADMINISTRATIVE EXPENSES                 695,839        347,778
                                                     -----------    -----------

     LOSS FROM OPERATIONS                               (530,839)      (225,778)

     INTEREST EXPENSE                                      2,339              -
                                                     -----------    -----------

     LOSS BEFORE PROVISION FOR INCOME TAXES             (533,178)      (225,778)

     PROVISION FOR INCOME TAXES                                -              -
                                                     -----------    -----------

     NET LOSS                                        $  (533,178)   $  (225,778)
                                                     ===========    ===========

     NET LOSS PER COMMON SHARE - basic and diluted   $     (0.11)   $     (0.07)
                                                     ===========    ===========

     WEIGHTED AVERAGE NUMBER OF COMMON SHARES
     OUTSTANDING - basic and diluted                   4,719,616      3,436,992
                                                     ===========    ===========





See  accompanying   independent  auditors'  report  and  notes  to  consolidated
financial statements


                                       16
<PAGE>



<TABLE>
<CAPTION>
                       TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY


                                             Common Stock           Additional                      Total
                                           -----------------         Paid-In      Accumulated   Stockholders'
                                           Shares     Amount         Capital        Deficit      Deficiency
                                          ---------  ----------     ----------    -----------   -------------
<S>                                       <C>        <C>            <C>           <C>           <C>

Balance, December 31, 1998                3,417,447  $    3,417     $      583    $ (25,408)    $   (21,408)
Issuance of shares for cash                 153,785         154         44,846            -          45,000
Net Loss                                          -           -              -     (225,778)       (225,778)
                                          ---------  ----------     ----------    -----------   -------------

Balance, December 31, 1999                3,571,232       3,571         45,429     (251,186)       (202,186)

Issuance of shares for cash                 616,597         617        299,383                      300,000
Issuance of shares for services             432,066         432        116,068                      116,500
Issuance of shares for Smartdotcom, Inc.  1,121,000       1,121         (1,121)                           -
Exercise of stock options for services       25,000          25          6,225                        6,250
Net loss                                                                           (533,178)       (533,178)
                                          ---------  ----------     ----------    -----------   -------------
Balance, December 31, 2000                5,765,895  $    5,766    $   465,984   $ (784,364)    $  (312,614)
                                          =========  ==========    ===========   ==========     =============
</TABLE>












See  accompanying   independent  auditors'  report  and  notes  to  consolidated
financial statements


                                       17
<PAGE>
<TABLE>
<CAPTION>

                         TEL-VOICE COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                              2000           1999
                                                          -----------    -----------
<S>                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                             $  (533,178)   $  (225,778)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation                                              43              -
         Issuance of common stock for services rendered       116,500              -
         Exercise of stock options for services                 6,250
     Changes in operating assets and liabilities:
       Decrease in accounts receivable                              -         61,200
       Increase in accounts payable                            58,567            223
       Increase in accrued interest                             2,035              -
                                                          -----------    -----------
NET CASH USED IN OPERATING ACTIVITIES                        (349,783)      (164,355)
                                                          -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of furniture and equipment                       (1,536)             -
                                                          -----------    -----------
NET CASH USED IN INVESTING ACTIVITIES                          (1,536)             -
                                                          -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
     Issuance of notes payable - stockholders                  27,500              -
     Repayment of notes payable - stockholders                (10,000)             -
     Net increase in due to officers                           27,852        126,779
     Issuance of common stock for cash                        305,000         40,000
                                                          -----------    -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES           350,352        166,779
                                                          -----------    -----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 (967)         2,424

CASH AND CASH EQUIVALENTS - beginning of year                   2,424              -
                                                          -----------    -----------

CASH AND CASH EQUIVALENTS - ending of year                $     1,457    $     2,424
                                                          -----------    -----------
</TABLE>



See  accompanying   independent  auditors'  report  and  notes  to  consolidated
financial statements

                                       18
<PAGE>



                         TEL-VOICE COMMUNICATIONS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

   For the years ended  December 31, 2000 and 1999, the Company paid no interest
or income taxes.

NON-CASH INVESTING AND FINANCING TRANSACTIONS:

   In conjunction with the Company's 1999 private placement of its common stock,
   the  Company  issued  17,087  shares  with an  aggregate  value of  $5,000 on
   subscription, which was received in January 2000.

   During the year ended  December 31, 2000 the Company issued 432,066 shares of
   common  stock to an officer for  services  rendered  valued at  $116,500.  In
   addition,  an employee  exercised 25,000 stock options by providing  services
   valued  at  $6,250  as  consideration  for the  exercise  price of the  stock
   options.

   In  connection  with the  purchase  of a public  shell,  the  Company  issued
   1,121,000 shares of its common stock to the owners of the public shell.













                                       19
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

          Background and Nature of Operations
          -----------------------------------
          Tel-Voice  Communications,  Inc.  ("Tel-Voice") was incorporated under
          the laws of the State of Nevada on December  31, 1996 to engage in any
          lawful  corporate  activity,  including,  but not limited to, selected
          mergers and acquisitions.  Smartdotcom,  Inc. ("SDC") was incorporated
          under the laws of the State of Nevada on April 19, 1999. However,  the
          operations of SDC started on February 1, 1998 and from that date until
          April 19, 1999,  the  financial  activities  of SDC were reported in a
          company  controlled  by  SDC's  founder.  The  accompanying  financial
          statements reflect the operations of SDC as if it were incorporated on
          February 1, 1998.

          On June 30,  2000,  SDC was  acquired by  Tel-Voice  in a  transaction
          accounted for as a reverse merger.  Tel-Voice  issued 4,376,895 shares
          of its common stock for all of the issued and outstanding common stock
          of SDC.  Prior to the merger,  Tel-Voice had no business  activity and
          therefore pro forma operating  results as if the acquisition had taken
          place  at the  beginning  of the  periods  presented,  have  not  been
          presented.  For  accounting  purposes,  SDC has  been  treated  as the
          acquirer and accordingly,  SDC is presented as the continuing  entity,
          and the historical  financial  statements are those of SDC.  Tel-Voice
          and SDC are collectively referred to as the "Company."

          The  Company  has  developed  a  technology   that  provides   private
          electronic networks for labor unions and integrated communities,  both
          of which  include  subscribers  of the  unions  and  communities.  The
          Company will provide the  hardware,  software  and  technical  support
          required to setup and maintain the networks.

          Basis of Presentation
          ---------------------
          The accompanying financial statements have been prepared in conformity
          with  generally  accepted  accounting  principles,  which  contemplate
          continuation  of the Company as a going  concern.  As reflected in the
          accompanying  consolidated  financial statements,  the Company has had
          recurring  loss and negative cash flow from  operations,  and negative
          working  capital.  This  factor  raises  substantial  doubt  about the
          Company's ability to continue as a going concern.  Without realization
          of  additional  capital,  it  would be  unlikely  for the  Company  to
          continue as a going concern.  The financial  statements do not include
          any adjustments  relating to the  recoverability and classification of
          recorded asset amount,  or amounts and  classification  of liabilities
          that might be  necessary  should the  Company be unable to continue in
          existence.

                                       20
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Basis of Presentation, continued
          --------------------------------
          Subsequent to year-end,  the Company has been  successful in issuing a
          promissory  note for $100,000 (see Note 8). As a result of the Company
          being a public  company  through the reverse merger that took place on
          June 30, 2000 and  management's  intent to have the Company  listed on
          the OTC Bulletin Board, management believes that it will be successful
          in raising additional equity capital to fund the Company's operations.
          Management believes the above actions already taken and the successful
          raising of  additional  capital  will be  sufficient  to  provide  the
          Company with the ability to continue in existence.

          Principles of Consolidation
          ---------------------------
          The  accompanying   consolidated   financial  statements  include  the
          accounts  of  Tel-Voice  and its wholly  owned  subsidiary,  SDC.  All
          intercompany accounts and transactions have been eliminated.

          Use of Estimates
          ----------------
          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of assets  and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial  statements and the reported  amounts of revenue
          and expenses during the reporting period.  Actual results could differ
          from those estimates.

          Cash and Cash Equivalents
          -------------------------
          The Company  considers all highly liquid  investments  purchased  with
          original maturities of three months or less to be cash equivalents.

          Concentration of Credit Risk
          ----------------------------
          The Company  places its cash in what it  believes to be  credit-worthy
          financial institutions. However, cash balances may exceed FDIC insured
          levels at various times during the year.



                                       21
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Revenue
          -------
          Revenue  consists  of  consulting  fees  received in  connection  with
          providing  technical  support for the  implementation of the Company's
          technology in an  integrated  community in La Jolla,  California.  The
          Company  generally  obtains  written  contracts  with its customers to
          provide  consulting  services.  Revenue is  recognized  as the Company
          performs consulting services outlined in the contract. All the revenue
          for the years ended  December  31,  2000 and 1999 was from  consulting
          fees  generated  from a  project  in La Jolla,  California.  Since the
          revenue  earned is for  services,  the Company has no material cost of
          revenue.

          Income Taxes
          ------------
          Income  taxes  are  provided  for  based on the  liability  method  of
          accounting  pursuant to Statement of  Financial  Accounting  Standards
          ("SFAS")  No. 109,  "Accounting  for Income  Taxes".  Deferred  income
          taxes,  if any,  are  recorded,  using  enacted tax rates  expected to
          apply, to reflect the tax  consequences on future years of differences
          between the tax bases of assets and  liabilities  and their  financial
          reporting amounts at each year-end.

          Earnings Per Share
          ------------------
          The Company calculates  earnings per share in accordance with SFAS No.
          128,  "Earnings  Per  Share",  which  requires  presentation  of basic
          earnings  per share  ("Basic  EPS")  and  diluted  earnings  per share
          ("Diluted  EPS"). The computation of Basic EPS is computed by dividing
          loss available to common  stockholders by the weighted  average number
          of  outstanding  common  shares  during the period.  Diluted EPS gives
          effect to all dilutive  potential common shares outstanding during the
          period.  The  computation  of Diluted EPS does not assume  conversion,
          exercise  or  contingent  exercise  of  securities  that would have an
          antidilutive effect on earnings.  As of December 31, 2000, the Company
          had 175,000 stock options outstanding that would affect loss per share
          if they were to be dilutive.  As of December 31, 1999, the Company had
          no  securities  that  would  affect  loss per share if they were to be
          dilutive.

          Comprehensive Income
          --------------------
          In June 1998, the FASB issued SFAS No. 130,  "Reporting  Comprehensive
          Income".  SFAS No. 130  establishes  standards  for the  reporting and
          display of  comprehensive  income and its  components in the financial
          statements.  As of December  31,  2000,  the Company has no items that
          represent  comprehensive  income and,  therefore,  has not  included a
          schedule  of  Comprehensive  Income in the  accompanying  consolidated
          financial statements.

                                       22
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Stock Based Compensation
          ------------------------
          The Company  accounts for employee  stock options in  accordance  with
          Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for
          Stock Issued to  Employees".  Under APB 25, the Company  recognizes no
          compensation  expense related to employee stock options, as no options
          are granted at a price below market price on the date of grant.

          In 1996,  SFAS No.  123  "Accounting  for  Stock-Based  Compensation",
          became  effective for the Company.  SFAS No. 123, which prescribes the
          recognition of compensation expense based on the fair value of options
          on the grant date,  allows  companies  to continue  applying APB 25 if
          certain pro forma  disclosures  are made  assuming  hypothetical  fair
          value   method,   for  which  the  Company   uses  the   Black-Scholes
          option-pricing model.

          For non-employee stock based  compensation,  the Company recognizes an
          expense in  accordance  SFAS No. 123 and values the equity  securities
          based on the fair  value of the  security  on the date of  grant.  For
          stock-based  awards  the  value is based on the  market  value for the
          stock on the date of grant  and if the stock  has  restrictions  as to
          transferability a discount is provided for lack of tradability.  Stock
          option awards are valued using the Black-Scholes option-pricing model.

          Recently Issued Accounting Pronouncements
          -----------------------------------------
          In June 1998, the Financial Accounting Standards Board issued SFAS No.
          133,  "Accounting for Derivative  Instruments and Hedging Activities."
          SFAS No.  133, as amended by SFAS No.  137,  is  effective  for fiscal
          years beginning after June 15, 2000. SFAS No. 133 requires the Company
          to recognize  all  derivatives  as either  assets or  liabilities  and
          measure those  instruments at fair value. It further provides criteria
          for derivative  instruments to be designated as fair value,  cash flow
          and foreign  currency  hedges and  establishes  respective  accounting
          standards  for reporting  changes in the fair value of the  derivative
          instruments.  Upon  adoption,  the Company  will be required to adjust
          hedging  instruments  to fair value in the balance sheet and recognize
          the  offsetting  gains or losses as  adjustments to be reported in net
          income or other comprehensive  income, as appropriate.  The Company is
          evaluating its expected  adoption date and currently expects to comply
          with the  requirements  of SFAS 133 in fiscal  year 2002.  The Company
          does  not  expect  the  adoption  will be  material  to the  Company's
          financial position or results of operations since the Company does not
          believe it participates in such activities.


                                       23
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Recently Issued Accounting Pronouncements, continued
          ----------------------------------------------------
          In June 1999,  the FASB issued SFAS No. 136,  "Transfer of Assets to a
          Not-for-Profit  Organization or Charitable  Trust that Raises or Holds
          Contributions for Others" and SFAS No. 137, "Accounting for Derivative
          Instruments  and  Hedging   Activities."   These  statements  are  not
          applicable to the Company.

          In June 2000,  the FASB issued SFAS No. 138,  "Accounting  for Certain
          Derivative  Instruments and Certain Hedging  Activities."  The Company
          does  not  expect  the  adoption  of SFAS No.  138 to have a  material
          impact, if any, on its financial position or results of operations.

          In June  2000,  the FASB  issued  SFAS No.  139,  "Rescission  of FASB
          Statement  No. 53 and  amendments to FASB  Statements  No. 63, 89, and
          121." The Company does not expect the adoption of SFAS No. 139 to have
          a material  impact,  if any, on its  financial  position or results of
          operations.

          In  September  2000,  the FASB issued SFAS No.  140,  "Accounting  for
          Transfers and  Servicing of Financial  Assets and  Extinguishments  of
          Liabilities." This statement is not applicable to the Company.

          In January 2001, the FASB Emerging Issues Task Force issued EITF 00-27
          effective for convertible debt  instruments  issued after November 16,
          2000.  This  pronouncement  requires  the use of the  intrinsic  value
          method for  recognition of the detachable and imbedded equity features
          included with  indebtedness,  and requires  amortization of the amount
          associated with the  convertibility  feature over the life of the debt
          instrument  rather  than the  period  for which the  instrument  first
          became  convertible.  This EITF 00-27 could  impact  future  financial
          statements, should the Company enter into such agreements.

          In March 2000,  the  Financial  Accounting  Standards  Board  ("FASB")
          issued FASB Interpretation No. 44 ("Interpretation  44"),  "Accounting
          for Certain Transactions Involving Stock Compensation." Interpretation
          44 provides  criteria for the recognition of  compensation  expense in
          certain stock-based  compensation  arrangements that are accounted for
          under APB Opinion No. 25,  Accounting  for  Stock-Based  Compensation.
          Interpretation 44 was effective July 1, 2000, with certain  provisions
          that are effective retroactively back to December 15, 1998 and January
          12,  2000.  The  adoption  of this  statement  did not have a material
          impact on the Company's financial  position,  results of operations or
          liquidity.


                                       24
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Recently Issued Accounting Pronouncements, continued
          ----------------------------------------------------
          In  December  1999,  the  Securities  and  Exchange   Commission  (the
          "Commission")  issued  Staff  Accounting  Bulletin  No.  101,  Revenue
          Recognition in Financial Statements,  which is to be applied beginning
          with the  fourth  fiscal  quarter  of  fiscal  years  beginning  after
          December 15, 1999, to provide guidance related to recognizing  revenue
          in circumstances in which no specific authoritative literature exists.
          The adoption of this  statement did not have a material  impact on the
          Company's financial position, results of operations or liquidity.

NOTE 2 - RELATED PARTY TRANSACTIONS

          Due to  officers  represent  unpaid  salaries  for the  Company's  two
          officers, advances from the Company's CEO and Company related expenses
          paid by the Company's CEO.

          During the year ended December 31, 1999, the Company  accrued a salary
          to its  CEO of  $180,000  of  which  $158,000  was  paid in  1999.  In
          addition,  the  Company's  CEO advanced the Company  $104,779 that was
          used to pay operating expenses.

          During the year ended December 31, 2000, the Company  accrued a salary
          to its CEO of $180,000 of which $180,000 was paid in 2000. In addition
          in 2000,  the  Company's  CEO  advanced  the  Company  $95,000 and the
          Company repaid $113,184 in advances from the CEO.

          During the year ended  December 31, 2000, the Company paid $12,204 and
          has accrued  $20,435 at December 31, 2000 to a company whose  co-owner
          is also a director and officer of the Company.

NOTE 3 - NOTES PAYABLE - STOCKHOLDERS

          Notes payable - stockholders at December 31, 2000 represent loans made
          by two minority stockholders. The notes bear interest at 18% per annum
          and are payable upon demand.


                                       25
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 4 - STOCKHOLDERS' DEFICIENCY

          Upon  its  formation,  the  Company  issued  3,417,447  shares  of the
          Company's common stock to the founding stockholder for $4,000.

          In October  1999,  the Company  initiated a private  placement  of its
          common  stock.  Each  subscriber  received one share of the  Company's
          common stock for $0.29.  As of December 31, 1999,  the Company  issued
          153,785  shares of its common stock for $45,000,  of which $40,000 was
          collected in 1999 and the remaining $5,000, which has been recorded as
          a  subscription  receivable in the  accompanying  balance  sheet,  was
          collected in January 2000.

          In March and June 2000, the Company  issued an additional  410,094 and
          206,503 shares of its common stock in two separate  private  placement
          offerings for gross proceeds of $120,000 and $180,000, respectively.

          In 2000,  the Company  issued 432,066 shares of its common stock to an
          officer of the Company for wages.  An expense of $116,500 is reflected
          in the results of  operations  related to the  issuance of this stock.
          The stock was  valued at $0.27 per  share,  which was the fair  market
          value on the date of grant.


NOTE 5 - STOCK OPTIONS

          On May 1, 2000 the  Company  reserved  for  issuance an  aggregate  of
          1,000,000 shares of common stock under its stock option plan.

          The Company has adopted  only the  disclosure  provisions  of SFAS No.
          123, "Accounting for Stock-Based  Compensation." It applies Accounting
          Principles  Bulletin  ("APB")  Opinion No. 25,  "Accounting  for Stock
          Issued to Employees,"  and related  interpretations  in accounting for
          its Stock Option Plan and does not recognize  compensation expense for
          its Stock  Option  Plan other than for  restricted  stock and  options
          issued to  outside  third  parties.  If the  Company  had  elected  to
          recognize  compensation expense based upon the fair value at the grant
          date for  awards  under  the Stock  Option  Plan  consistent  with the
          methodology  prescribed  by SFAS No. 123, the Company's net income and
          earnings per share would be reduced to the pro forma amounts indicated
          below for the year ended December 31, 2000:

                                       26
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 5 - STOCK OPTIONS (Continued)

              Net loss
                   As reported                              $     (533,178)
                   Pro forma                                $     (537,563)

              Basic and diluted loss per common share
                   As reported                              $        (0.11)
                   Pro forma                                $        (0.11)


          For purposes of computing the pro forma  disclosures  required by SFAS
          No.  123,  the fair  value of each  option  granted  to  employees  is
          estimated using the Black-Scholes option-pricing model. The fair value
          is computed as of the date of grant  using the  following  assumptions
          for grants in 2000: (i) dividend yield of 0%, (ii) expected volatility
          of 0%, (iii) weighed-average  risk-free interest rate of approximately
          6.2%, and (iv) expected life of 5 years.  This option  valuation model
          requires input of highly subjective assumptions. Because the Company's
          employee stock options have  characteristics  significantly  different
          from those of traded  options,  and because  changes in the subjective
          input  assumptions can materially  affect the fair value estimate,  in
          management's  opinion, the existing model does not necessarily provide
          a reliable single measure of fair value of its employee stock options.

          The following table summarizes the options outstanding:

                                                                   Weighted-
                                                  Stock             Average
                                                  Option           Exercise
                                                  Plan               Price
                                             -----------           ----------
           Balance, December 31, 1999                  -           $        -
             Granted                             200,000           $     0.25
             Exercised                           (25,000)          $     0.25
                                             -----------

           Balance, December 31, 2000            175,000           $     0.25
                                             ===========

           Exercisable, December 31, 2000         25,000           $     0.25
                                             ===========

          There were 800,000 options  available for future grant at December 31,
          2000 under the Company's stock option plan.


                                       27
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 5 - STOCK OPTIONS (Continued)

          The weighted average remaining contractual life of options outstanding
          issued under the stock option plan is 4.33 years at December 31, 2000.
          No compensation  expense was recognized as a result of the issuance of
          stock options during the year ended December 31, 2000.

          For options  granted during the year ended December 31, 2000 where the
          exercise  price equaled the stock price at the date of the grant,  the
          weighted-average  fair  value  of  such  options  was  $0.07  and  the
          weighted-average  exercise price of such options was $0.25. No options
          were  granted  during  the year  ended  December  31,  2000  where the
          exercise  price was greater  than the stock price at the date of grant
          or where the exercise  price was less than the stock price at the date
          of the grant.


NOTE 6 -  INCOME TAXES

          The  components  of the  provision  for income  taxes for years  ended
          December 31, 2000 and 1999 are as follows:

                                                       2000          1999
                                                   -----------  -------------
              Current Tax Expense
                  U.S. Federal                     $          - $          -
                  State and Local                             -            -
                                                   ------------ -------------
              Total Current                                   -            -
                                                   ------------ -------------

              Deferred Tax Expense
                  U.S. Federal                                -            -
                  State and Local                             -            -
                                                   ------------ -------------
              Total Deferred                                  -            -
                                                   ------------ -------------

              Total Tax Provision (Benefit)
               for Income taxes                    $          - $           -
                                                   ============ =============


                                       28
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 6 - INCOME TAXES (Continued)

          The  reconciliation  of the  effective  income tax rate to the Federal
          statutory rate is as follows:

              Federal Income Tax Rate                  34.0%            34.0%
              Effect of Net Loss                    (  34.0)%       (   34.0)%
                                                    --------       ---------
               Effective Income Tax Rate                0.0%             0.0%
                                                   ========      ===========

          At December 31, 2000, the Company had net operating loss carryforwards
          of approximately $640,000 that begin to expire in 2013. The difference
          between the net operating loss carryforwards and the cumulative losses
          of the Company is related to book/tax  differences and losses recorded
          in the company controlled by the Company's majority  stockholder prior
          to  the   incorporation  of  the  Company.   Because  of  the  current
          uncertainty  of  realizing  the  benefits of the tax  carryforward,  a
          valuation  allowance  equal to the tax benefits for deferred taxes has
          been established.  The full realization of the tax benefit  associated
          with the carryforward depends predominantly upon the Company's ability
          to generate taxable income during the carryforward period.

          Deferred  tax assets  and  liabilities  reflect  the net tax effect of
          temporary  differences  between  the  carrying  amount of  assets  and
          liabilities  for  financial  reporting  purposes  and amounts used for
          income tax purposes.  Significant components of the Company's deferred
          tax assets and  liabilities  as of  December  31, 2000 and 1999 are as
          follows:

                                                    2000             1999
                                              -------------     -------------
              Deferred Tax Assets
              Loss Carryforwards              $     256,000     $      44,000
              Less:  Valuation Allowance           (256,000)          (44,000)
                                              -------------     -------------
              Net Deferred Tax Assets         $           -     $           -
                                              =============     =============

          Net operating loss carryforwards expire starting in 2014.

          The Company  valuation  allowance  increase  by  $212,000  and $44,000
          during the years ended December 31, 2000 and 1999, respectively.


                                       29
<PAGE>

                  TEL-VOICE COMMUNICATIONS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 7 - COMMITMENTS AND CONTINGENCIES

          The  Company  leases  its  corporate  office  under  a  non-cancelable
          operating  lease.  Total rent expense for the year ended  December 31,
          2000 and 1999 was $5,272 and $0,  respectively.  Future  minimum lease
          payments  under  non-cancelable   operating  leases  with  initial  or
          remaining terms of one year or more are as follows:

                    Year ending December 31,
                    2001                                    $        17,996
                    2002                                             27,403
                    2003                                             28,017
                    2004                                              9,407
                                                            ---------------
                                                            $        82,823


NOTE 8 - SUBSEQUENT EVENTS

          In April 2001,  the Company  issued a note  payable for $25,000 and in
          July  2001,  the  Company  issued  a note  payable  in the  amount  of
          $100,000.   In  addition,   in  March  2001  the  Company  obtained  a
          construction  contract  to  install  its  communication  system  in  a
          building in La Jolla,  California.  The Company  expects to realize at
          least $820,000 in revenue from this contract.










                                       30
<PAGE>

Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

For the fiscal year ended  December  31,  1999 and 1998 and the  interim  period
subsequent to December 31, 1999, the firm of Merdinger, Fruchter, Rosen & Corso,
P.C. ("MFRC") served as our auditors.  Effective February 13, 2001, our Board of
Directors  approved  the  change of  accountants.  On  February  13,  2001,  our
management  dismissed  MFRC and  engaged  Stonefield  Josephson,  Inc.  of Santa
Monica, California, as our independent public accountants to audit our financial
statements for the fiscal year ended December 31, 2000.

During the period of engagement of MFRC there were no disagreements  between the
us and MFRC on any  matter of  accounting  principles  or  practices,  financial
statement  disclosure,  or auditing scope or procedure,  which disagreements (if
not  resolved  to the  satisfaction  of MRFC)  would  have  caused  MFRC to make
reference  in  connection  with  their  report  to  the  subject  matter  of the
disagreements.  The  accountants'  report on our  financial  statements  for the
fiscal  years  ended  December  31,  1999 and 1998 did not  contain  any adverse
opinion or  disclaimer  of  opinion  and was not  qualified  or  modified  as to
uncertainty or audit scope or accounting principles,  except to express doubt as
to our ability to continue as a going concern.



                                    PART III

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The  following  table sets forth the name,  age and position with the Company of
each officer and director as of the date of this Report.

Our current directors, executive officers and key employees are as follows:


        Name               Age                    Position
        ----               ---                    --------
     Jay Budd              46     Chairman  of the Board and Chief  Executive
                                  Officer

     Kevin Pickard         37     Chief Financial Officer and Director

     Robert Lee            36     Chief Technology Officer and Director

     Dan Simonetti         71     Director

     Nicholas Bartz        49     Director


                                       31
<PAGE>

Jay H.  Budd,  President  and CEO,  has over 10  years of  strategic  consulting
experience,  including leading  telecommunications clients such as MCI, Northern
Telecom, Bell Canada Enterprises,  Erickson,  Turner Broadcasting,  AEGIS, Royal
Bank of Canada,  and Hong Kong Shanghai Bank, as well as a host of leading cable
companies.   Mr.  Budd's  consulting  experience  has  been  on  development  of
interactive  transaction-based  content  programs  delivered both through public
access and in-home devices.

Kevin Pickard,  Chief  Financial  Officer,  is a CPA with  experience  providing
management  consulting  services for small to medium sized companies,  including
due  diligence on potential  acquisitions,  preparing  projections  and business
plans,  assisting with restructuring of companies and positioning  companies for
initial public  offerings.  Mr. Pickard has practiced as a CPA for over 13 years
and has been  involved in five initial  public  offerings  and numerous  private
placement offerings.  He is the owner of Pickard & Company, CPA's, P.C. Prior to
that he was a Partner with Singer Lewak Greenbaum & Goldstein,  LLP and he spent
over   nine    years    with    Coopers   &    Lybrand,    L.L.P.,    (currently
PricewaterhouseCoopers,  LLP).  Mr. Pickard earned a BS in Accounting and Master
of  Accountancy  from Brigham Young  University.  Mr. Pickard does not spend his
full time working for the Company.

Robert E. Lee,  Chief  Technology  Officer and  Director,  has more than fifteen
years  of  experience  in  technology   integration,   product  development  and
engineering management. By leading R&D organizations in the design & development
of  business-oriented  products  that  utilize  advanced  communication,  custom
electronic design & packaging and sophisticated software components, Mr. Lee has
pioneered  many  leading-edge  interactive  delivery  technologies.  Credited in
bringing to market the world's first videoconferencing kiosk, the formulation of
Aegis  Technologies  award-winning OEM interactive video kiosk product line, and
the development of an  Internet-based  interactive  video call software utility.
Additionally,  Mr. Lee has directed the development of an interactive  apartment
network incorporating sleek interactive kiosks, multi-function set-top boxes and
advanced network  infrastructure,  and has authored several technology  patents.
Currently, Mr. Lee does not spend his full time working for the Company.

Dan Simonetti,  Director,  has been self-employed  since 1954. He currently owns
and manages five dry cleaning stores in the State of Connecticut.  Mr. Simonetti
is a member of the Rotary Club and the Boys Club.  He is  President of the Clean
Association and President of the Shelton, Connecticut Square Association.

Nicholas Bartz,  D.O.,  Director,  is a practicing Family Physician with Bayview
Family Physicians, P.C., in Jackson, Michigan. Dr. Bartz also has over ten years
consulting experience in risk management,  budgets and billing,  insurance,  and
implementing programs and services through his consulting with the Family Health
and Occupational  Center in Jackson,  Michigan and Advanced Planning Concepts in
Grand   Rapids,    Michigan.    He   continues   his   consulting   as   Medical
Director/Consultant  with  Advanced  Planning  Concepts,  Inc. in Grand  Rapids,
Michigan.  Dr. Bartz was trained in Osteopathic  Medicine Surgery in Des Moines,
Iowa from  1978 to 1981,  completed  his  Internship  in June  1982 at  Lakeview
General Hospital,  Battle Creek,  Michigan, and received his Board Certification
in Family Practice from the American Osteopathic Board of Family Physicians.

                                       32
<PAGE>

None of our  directors,  executive  officers or key  employees is related to any
other of our directors, executive officers or key employees.

Pursuant to Section 16 (a) of the Securities Exchange Act of 1934, and the rules
issued  thereunder,  our directors  and executive  officers are required to file
with the  Securities  and Exchange  Commission  and the National  Association of
Securities Dealers, Inc. reports of ownership and changes in ownership of common
stock and other equity  securities  of the  Company.  Copies of such reports are
required to be  furnished  to us. Based solely on a review of the copies of such
reports furnished to us, or written  representations  that no other reports were
required,  we believe that,  during our fiscal year ended December 31, 2000, all
of our  executive  officers and  directors  complied  with the  requirements  of
Section 16 (a).


Item 10.  EXECUTIVE COMPENSATION

The  following  table sets forth the annual  compensation  paid to our executive
officers for the three fiscal years ended December 31, 2000.

<TABLE>
<CAPTION>
                                                                  Other      Long-term
           Name and                                              Annual     Compensation
      Principal Position     Year    Salary ($)     Bonus ($) Compensation   Awards ($)
----------------------------------------------------------------------------------------
<S>                          <C>      <C>           <C>       <C>           <C>
Jay Budd                     2000     180,000           -           -            -
Chairman of the              1999     180,000(2)        -           -            -
Board and CEO                1998      60,000           -           -            -

Kevin Pickard                2000      48,750(2)        -           -       116,500 (1)
Chief Financial Officer      1999        -              -           -            -
And Director                 1998        -              -           -            -
</TABLE>

(1)  Mr. Pickard was granted 466,000 shares of the Company's common stock valued
     at $0.25 per share in May 2000.

(2)  Of Mr. Budd's salary of $180,000, only $158,000 was paid in 1999 and of Mr.
     Pickard's salary of $48,750, only $3,500 was paid in 2000.



                                       33
<PAGE>


Item 11.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table sets forth  certain  information  as of December  31, 2000
regarding  the record and  beneficial  ownership of our common stock by: (i) any
individual or group (as that term is defined in the federal  securities laws) of
affiliated individuals or entities who is known by us to be the beneficial owner
of more than five percent of the  outstanding  shares of our common stock;  (ii)
each of our  executive  officers  and  directors;  and (iii)  the our  executive
officers and directors as a group.

Name and Address of                   Number of Shares             Percent
 Beneficial Owner                    Beneficially Owned (1)       of Class (2)
-----------------                    ----------------------       ------------

Jay Budd                                    3,400,000 (3)              58.97%
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

Kevin Pickard                                 466,000                   8.08%
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

Daniel Simonetti                              100,000                   1.73%
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

Nicholas Bartz                                 30,000                   *
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

Robert Lee                                          -                  -
8283 North Hayden Road
Suite 250
Scottsdale, AZ  85258

All directors and officers                  3,996,000                  69.30%
as a group  (5 persons)

--------------

* Less than 1%

(1)  Except as otherwise indicated, we believe that the beneficial owners of our
     common stock listed above,  based on information  furnished by such owners,
     have sole investment and voting power with respect to such shares,  subject
     to community property laws where applicable.
(2) The following  percentages  are based upon 5,765,895  shares of common stock
issued and outstanding at December 31, 2000. (3) Included 3,000,000 owned by the
Budd Family Limited Partnership which Mr. Budd claims beneficial ownership.


                                       34
<PAGE>

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In January 2000, Mr. Simonetti  purchased 100,000 shares of the Company's common
stock for $0.25 per share.

In May 2000,  Mr.  Pickard was granted  466,000  shares of the Company's  common
stock valued at $0.25 per share.

In January 2001, Mr. Bartz purchased 30,000 shares of the Company's common stock
for $0.75 per share.

During the year ended  December  31,  2000,  the  Company  paid  $12,204 and has
accrued $20,435 at December 31, 2000 to DynaZign, Inc. a company co-owned by Mr.
Lee who is also a director and officer of the Company.


Item 13.  EXHIBITS AND REPORTS ON FORM 8-K

                                  EXHIBIT INDEX

The following exhibits are filed as part of this Annual Report on Form 10-KSB or
are incorporated herein by reference:

Exhibit                       Description
-------                       -----------
3.1.1           Articles of Incorporation (1)
3.1.2           Amended Articles of Incorporation (1)
3.2             Bylaws (1)
10.1            Lock-up agreement with Hagit Bernstein (1)
10.2            Lock-up agreement with Raphi Shram (1)
10.3            Lock-up agreement with Naomi Shram (1)
10.4            Stock Purchase Agreement and Plan of Reorganization (2)
21.1            Subsidiaries of Registrant (F)


(1)  Incorporated  by reference to the  Exhibits to the  Registration  Statement
     filed by the Registrant on Form 10SB dated March 1, 2000.

(2)  Incorporated  by reference  to the Exhibits to the Current  Report filed by
     the Registrant on Form 8-K/A dated December 11, 2000. F Filed herewith

REPORTS FILED ON FORM 8-K

On December 11, 2000, the Company filed an amended Form 8-K for the  acquisition
of Smartdotcom, Inc. on June 30, 2000.



                                       35
<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Action of 1934,  as amended,  the  registrant  has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                       TEL-VOICE COMMUNICATIONS, INC.

                                       By:      /s/ JAY BUDD
                                            --------------------------
                                            Jay Budd
                                            CHAIRMAN OF THE BOARD



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this  Report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


      SIGNATURE                              TITLE                 DATE

  /s/ JAY BUDD
-----------------
      Jay Budd            Chairman of the Board and CEO    August 13, 2001


  /s/ KEVIN PICKARD
-------------------
    Kevin Pickard         CFO and Director                 August 13, 2001


    /s/ ROBERT LEE
------------------
      Robert Lee          CTO and Director                 August 13, 2001


 /s/ DANIEL SIMONETTI
---------------------
   Daniel Simonetti       Director                         August 13, 2001


  /s/ NICHOLAS BARTZ
--------------------
    Nicholas Bartz        Director                         August 13, 2001





                                       36