Edgar Filing: TELCO BLUE INC

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

FORM 10-KSB/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED September 30, 2002

Commission file number:

TELCO BLUE, INC.
(Formerly known as Wave Power.net, Inc.)
-------------------------------------------------------------
(Exact Name of Small Business Issuer as specified in its charter)

Delaware 43-1798970
-------------------- --------------------------
(State of Incorporation) (IRS Employer File Number)

388 Market Street, Suite 500, San Francisco, CA 94111, Tel. 604-628-5278
------------------------------------------------------------------------
Thomas F. Pierson, Esq.
-----------------------------------
(Name of agent for service)

(954) 489-1210
------------------------------------------------------------
(Telephone number, including area code, of agent for service)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B)
OF THE SECURITIES EXCHANGE ACT OF 1934:

Title of Each Class Name of Each Stock Exchange on Which Registered
----------------------- ---------------------------------------------------
Common Stock, Par Not Applicable
Value $0.001 Per Share

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

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 [ ]

The number of shares of Registrant's Common Stock outstanding on September
30, 2002, was 30,000,400.

The Registrant's total revenues for the period from August 2, 2002 through
September 30, 2002 were $0.00.

PART I
--------

Item 1. Description of Business.
------------------------------------

Nature of Business. telcoBlue, Inc. ("telcoBlue") formerly Better Call Home,
Inc. ("BCH"), a development stage company, was formed in Nevada on August 2,
2002 to operate an Internet-based long distance telephony network using
state-of-the-art Voice over Internet Protocol (VoIP). Its long distance services
will be marketed mainly by third parties to end users in the form of pre-paid
phone cards or other media, including direct personal computer (PC) access and
Internet-based long distance telephony network using state-of-the-art Voice over
Internet Protocol. The name was changed to telcoBlue, Inc. on August 29, 2002.

Wave Power ("the Company") was originally incorporated as Novus Environmental,
Inc. in the State of Delaware on November 6, 1997, to develop or acquire
recycling technologies. On January 20, 2000, the Company entered into a
reorganization agreement whereby the company was to merge with Wave Power, Inc.,
a privately held company. On March 3, 2000, the parties therein acknowledged
that the merger contemplated had never been consummated and they subsequently
mutually agreed to rescind that agreement and entered into an agreement
releasing the parties of their right, title, interest, claims and obligations
that they might otherwise have had or had been set forth in the aforementioned
January 20, 2000 agreement. The Company formally changed is name to Wave
Power.Net, Inc. on March 20, 2000.

Principal products or services and their markets
- ------------------------------------------------------

Equipped with the latest in Voice over Internet Protocol (VoIP) technology,
telcoBlue products and services enable customers to make low-cost, high quality
phone calls over the Internet using their personal computers or traditional
telephones. telcoBlue's International PC-Phone Calling Cards are targeted at
specific ethnic markets throughout North America and offers amongst the lowest
long distance rates available today.

In 2002, telcoBlue's licensed VoIP technology won several industry awards
including TMC Labs "2001 Innovation Award", Internet Telephony's "Editor's
Choice Award" and both Consumer Inter@action Solution's and Internet Telephony's
"Product of the Year" Awards.

telcoBlue's pre-paid International PC-Phone Calling Cards will be delivered as a
CD business card which can be used from any phone or Internet connected PC in
North America. To ensure the lowest long distance rate possible, each calling

card is city specific. For example, customers can purchase a card with a city
specific dial-up number (such as to Manila or to Hong Kong) that guarantees the
lowest long distance rate available for calling that particular city. This
approach is very direct, very targeted and very specific - allowing telcoBlue to
deliver the lowest rates.

Using the pre-paid International PC-Phone Calling Card, telcoBlue customers will
`call home' over the Internet in three ways:

Phone-to-Phone:
Customers first call a toll-free 800 number and then enter their unique user ID
(PIN). telcoBlue, as the VoIP provider, routes the call over the Internet to the
receiver's calling area where a local call is placed.

PC-to-Phone:
Customers also call home using a multimedia PC with a headset or microphone and
Internet connection. This option should be attractive to the large number of
Asian students attending North American universities and colleges with PC
access.

PC-to-PC:
PC-to-PC calls work much in the same way as PC-to-Phone calls, except for the
main difference that the receiver is also answering using a multimedia PC,
headset/microphone and Internet connection.

Item 2. Description of Property.
--------------------------------------

The Company has no physical assets. Operational expenses such as rent are
covered under the management agreement with Vocalscape.

Item 3. Legal Proceedings.
------------------------------

None that are pending that the Company is aware of at present.

Item 4. Submission of Matters to a Vote of Security Holders.
-----------------------------------------------------------------------

On August 7, 2002, Wave Power.net, Inc. ("the Company"), entered into a
conditional Agreement and Plan of Reorganization ("Agreement") with Better Call
Home, Inc. ("BCH"), a Nevada corporation.

As set forth in the Agreement, the Company and BCH desired to effect a Type B
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended, on the terms and conditions set forth below, whereby the Company
acquired all of the issued and outstanding shares of BCH's common stock by
issuing solely in exchange therefore to BCH's shareholders, pro-rata, the
Sixteen Million Restricted Common Shares (16,000,000) (the "Shares") after a 1:5
reverse split of the shares. The Company changed it's name to telcoBlue, Inc.

PART II - FINANCIAL INFORMATION
--------------------------------

TELCO BLUE, INC.
(formerly known as Wave Power.net, Inc.

FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(RESTATED)

C O N T E N T S
---------------

Item Page
---- ----

Independent Auditors' Report F-1

Consolidated Balance Sheets
as of September 30, 2002 F-2

Consolidated Statement of Expenses
for the Period from August 2, 2002 (Inception)
through September 30, 2002 F-3

Consolidated Statement of Changes in Stockholders' Deficit
for the Period from August 2, 2002 (Inception)
through September 30, 2002 F-4

Consolidated Statement of Cash Flows
for the Period from August 2, 2002 (Inception) F-5
through September 30, 2002

Notes to Consolidated Financial Statements F-6

INDEPENDENT AUDITORS REPORT

To the Board of Directors
telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
Vancouver, British Columbia, Canada

We have audited the accompanying consolidated balance sheet of telcoBlue, Inc.,
as of September 30, 2002 and the related statements of expenses, stockholders
deficit, and cash flows for the period from August 2, 2002 (Inception) through
September 30, 2002. These financial statements are the responsibility of
telcoBlue's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of telcoBlue, Inc., as of
September 30, 2002, and the results of its operations and its cash flows for the
period described in conformity with accounting principles generally accepted in
the United States of America.

/S/ MALONE & BAILEY, PLLC
Houston, Texas
www.malone-bailey.com

November 29, 2002
except for Note 9,
which is dated
March 10, 2003

F-1

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
As of September 30, 2002

ASSETS

Current asset
Cash $ 74

Distribution Agreement 926
--------
$ 1,000
========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable $ 34,114
Accounts payable to shareholder 17,218
Accrued expenses 61
Notes payable 3,343
Notes payable to related parties 161,162
--------
Total Current Liabilities 215,898
--------

STOCKHOLDERS' DEFICIT

Common stock, $.001 par value, 75,000,000 shares
authorized, 30,000,400 issued and outstanding 30,000
Additional paid in capital 1,944,454
Accumulated other comprehensive income 217
Deficit accumulated during the development stage (2,189,569)
--------
Total Stockholders' deficit ( 214,898)
--------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,000
========

See accompanying summary of accounting policies
and notes to financial statements.

F-2

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF EXPENSES
For the Period from August 2, 2002 (Inception)
Through September 30, 2002

General and administrative $ 2,176,332
Interest expense 13,237
-----------
Net loss (2,189,569)

Other Comprehensive Income
Gain on foreign currency translation 217
-----------
Total Comprehensive Loss $(2,189,352)
===========

See accompanying summary of accounting policies
and notes to financial statements.

F-3

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
For the Period from August 2, 2002 (Inception)
Through September 30, 2002
(Restated)

Accumulated Deficit
Other Accumulated
Compre- During
Common Stock hensive Development
Shares $ Income Stage Totals
----------- ----------- ----------- ----------- -----------

Stock issued for:
- cash 74,000 $ 74 -- -- $ 74
- distribution agreement 926,000 926 -- -- 926

Stock issued to Better
Call Home shareholders
for reverse merger with
Wave Power 15,000,000 -- -- -- --

Stock issued to Wave Power
shareholders for reverse
merger with Better Call
Home 14,000,000 -- -- -- --

Stock transferred back
to telcoBlue (4,520,000) -- -- -- --

Stock issued for
services 4,520,000 2,134,003 -- -- 2,134,003

Liabilities of Wave Power
assumed in reverse merger -- (173,725) -- -- (173,725)

Intrinsic value of beneficial
conversion feature of
convertible notes payable -- 13,176 -- -- 13,176

Foreign currency
translation adjustment -- -- $ 217 -- 217

Rounding 400 -- -- -- --

Net loss -- -- -- $(2,189,569) (2,189,569)
----------- ----------- ----------- ----------- -----------
Balances at
September 30, 2002 30,000,400 1,974,454 $ 217 $(2,189,569) $ (214,898)
=========== =========== =========== ===========
Less: par value (30,000)
-----------
$ 1,944,454
===========

See accompanying summary of accounting policies
and notes to financial statements.

F-4

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Period from August 2, 2002 (Inception)
Through September 30, 2002
(Restated)

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,189,569)
Adjustments to reconcile net loss
to net cash used by operating activities:
Stock issued for services 2,134,003
Intrinsic value of beneficial conversion
feature of convertible notes payable 13,176
Changes in:
Accounts payable 11,889
Accounts payable to related parties 17,218
Accrued expenses 61
-----------
NET CASH USED IN OPERATING ACTIVITIES (13,222)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of stock 74
Proceeds from notes payable 3,343
Proceeds from notes payable to related parties 9,662
-----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 13,079
-----------
Effect of exchange rate changes on cash 217
-----------
NET CHANGE IN CASH 74
Cash balance, beginning
-----------
Cash balance, ending $ 74
===========

Non-Cash Disclosures:
Stock issued to related party for distribution agreement $ 926
Accounts payable of WavePower assumed in merger 22,225
Note payable of WavePower assumed in merger 151,500

See accompanying summary of accounting policies
and notes to financial statements.

F-5

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business. telcoBlue, Inc. ("telcoBlue") formerly Better Call Home,
Inc. ("BCH"), a development stage company, was in Nevada on August 2, 2002 to
operate an Internet-based long distance telephony network using state-of-the-art
Voice over Internet Protocol. The name was changed to telcoBlue, Inc. on August
29, 2002.

On August 29, 2002, BCH entered into a reorganization with Wave Power.net, Inc.
("Wave Power"), an inactive public company, whereby Wave Power acquired all of
the issued and outstanding shares of BCH's common stock by issuing to BCH's
shareholders, pro-rata, 16,000,000 million shares of Wave Power common stock. At
that time, Wave Power had 14,000,000 shares outstanding. The combined entity
changed its name to telcoBlue, Inc. on August 29, 2002. After a 1 for 5 reverse
split, Wave Power had 4,013,000 shares issued and outstanding, and 9,987,000
post-reverse split common shares were issued in connection with the Agreement to
promoters and advisors. After payment of all reserved shares, management shares
and shares issued pursuant to this Agreement there were 30,000,400 shares of
common stock issued and outstanding.

Restatements of fiscal year end 2002 were made. See note 9 for details.

Principles of consolidation. The consolidated financial statements include the
accounts of telcoBlue and its subsidiaries. All significant intercompany
transactions and balances have been eliminated.

Cash and Cash Equivalents. telcoBlue considers all highly liquid investments
purchased with an original maturity of three months or less to be cash
equivalents.

Use of Estimates. In preparing financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenue and expenses in the income statement. Actual
results could differ from those estimates.

Impairment of Long-Lived Assets. telcoBlue reviews the carrying value of its
long-lived assets whenever events or changes in circumstances indicate that the
historical cost-carrying value of an asset may no longer be appropriate.
telcoBlue assesses recoverability of the carrying value of the asset by
estimating the future net cash flows expected to result from the asset,
including eventual disposition. If the future net cash flows are less than the
carrying value of the asset, an impairment loss is recorded equal to the
difference between the asset's carrying value and fair value.

F-6

Revenue recognition. There is no revenue recognition policy due to telcoBlue
having no revenues as of September 30, 2002.

Basic and diluted loss per common share is calculated by dividing the net loss
by the weighted average shares outstanding. There are no dilutive securities.

Income taxes. telcoBlue recognizes deferred tax assets and liabilities based on
differences between the financial reporting and tax bases of assets and
liabilities using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to be recovered. telcoBlue provides a
valuation allowance for deferred tax assets for which it does not consider
realization of such assets to be more likely than not.

Foreign currency translation. The functional currency of telcoBlue is the
Canadian Dollar (CDN$). Assets and liabilities are translated at exchange rates
in effect on the balance sheet date and income and expenses are translated based
on the average exchange rate for the year. Translation gains and losses are
accumulated as a component of Other Comprehensive Income.

Recently issued accounting pronouncements. telcoBlue does not expect the
adoption of recently issued accounting pronouncements to have a significant
impact on telcoBlue results of operations, financial position or cash flow.

NOTE 2 - DISTRIBUTION AGREEMENT

On August 7, 2002, telcoBlue issued 926,000 shares of common stock to Vocalscape
Networks, Inc. ("Vocalscape") for the right to distribute Vocalscape's products.
At the August 29 merger, this 926,000 shares became 14,816,000 shares. The
agreement is for three years.

NOTE 3 - ACCOUNTS PAYABLE TO SHAREHOLDER

On August 7, 2002, telcoBlue entered into a one year management agreement with
Vocalscape. Vocalscape will manage telcoBlue for $15,000 per month or 5 percent
of gross revenues, whichever is greater. The $15,000 per month fee can be paid
in telcoBlue common stock at $.25 per share if cash is not available. Vocalscape
must be paid a minimum from inception of 2,000,000 shares or $500,000 if the
agreement is terminated. As of September 30, 2002, telcoBlue owed Vocalscape
$17,218 under this agreement.

F-7

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - NOTES PAYABLE / NOTES PAYABLE TO RELATED PARTIES

In August and September 2002, telcoBlue executed four notes payable totaling
$13,005. Two notes totaling $3,343 are due to third parties and two notes
totaling $9,662 are due to shareholders. All four notes carry interest of 6
percent, with interest due monthly. The principal is due ten months from the
funding date. Each note is convertible into common stock of telcoBlue at the
holder's option. The price for conversion is the lower of 80 percent of the
average closing price of telcoBlue stock for the five days preceding the
conversion request or $.10 per share. The intrinsic value of the beneficial
conversion feature was $13, 176 which has been recorded as interest expense.

As part of the reverse merger with Wave Power, telcoBlue assumed the liabilities
of Wave Power. Wave Power owed a shareholder $151,500. The note is due on demand
and bears no interest.

NOTE 5 - COMMON STOCK

In August 2002, 74,000 shares of stock were sold for $47 in total proceeds. At
the August 29 merger, these shares became 1,184,000 shares.

In August 2002, 926,000 shares of stock were issued in exchange for a
distribution agreement (see note 2) with Vocalscape. The shares were valued at
$587. At the August 29 merger, these shares became 14,816,000 shares.

On August 29, 2002, 14,000,000 shares of stock were issued in a merger with
WavePower.net, Inc.

In September 2002, a telcoBlue shareholder issued 4,520,000 shares of telcoBlue
shares of telcoBlue stock for agreements with consultants for services on behalf
of telcoBlue. These transactions were accounted for as if the shares were
returned to telcoBlue and telcoBlue issued them. The shares were valued at
$2,134,000 and have been expensed as of September 30, 2002.

NOTE 6 - INCOME TAXES

Deferred tax assets $ 6,400
Less: valuation allowance (6,400)
-------
Net deferred taxes $ 0
=======

telcoBlue has a net operating loss of approximately $42,000 as of September 30,
2002, which each can be carried forward 20 years.

F-8

telcoBlue, Inc.
(formerly Better Call Home, Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - COMMITMENTS

Operational expenses such as rent are covered under the management agreement
with Vocalscape (see note 3).

NOTE 8 - SUBSEQUENT EVENT

In October and November 2002, telcoBlue sold 565,000 shares of telcoBlue common
stock for proceeds of $56,500, or $.10 per share.

NOTE 9 - RESTATEMENTS OF PREVIOUSLY REPORTED FINANCIAL STATEMENTS

In the originally prepared financials, 4,520,000 shares issued to consultants
for August agreements were erroneously not recorded. The value of the shares was
$2,134,003. In addition, the liabilities of Wave Power that were assumed in the
reverse merger and the beneficial conversion features of convertible notes
payable were erroneously not recorded. There were also errors in the original
translation of the foreign currency activity. These restated financials correct
the financials as of September 30, 2002.

F-9

A summary of the restatements are as follows:

Previously Increase
As of September 30, 2002: Stated (Decrease) Restated
----------- ----------- -----------

Balance Sheet:
Cash $ 46 $ 28 $ 74
Distribution agreement 587 339 926
----------- ----------- -----------
Total assets $ 633 $ 367 $ 1,000
=========== =========== ===========

Accounts payable $ 11,888 $ 22,226 $ 34,114
Accounts payable to shareholders 17,218 -- 17,218
Accrued expenses 61 -- 61
Notes payable 3,343 -- 3,343
Notes payable to related parties 9,662 151,500 161,162
Common stock 30,000 -- 30,000
Additional paid in capital (29,366) 1,973,820 1,944,454
Accumulated other comprehensive
income 217 -- 217
Deficit accumulated during the
development stage (42,390) (2,147,179) (2,189,569)
----------- ----------- -----------
Total liabilities and equity $ 633 $ 367 $ 1,000
=========== =========== ===========
For the year ended September 30, 2002:

Statement of Expenses:
General and administrative $ 42,329 $ 2,134,003 $ 2,176,332
Interest expense 61 13,176 13,237
----------- ----------- -----------
Net loss $ (42,390) $(2,147,179) $(2,189,569)
=========== =========== ===========

F-10

Item 5. Market for Common Equity and Related Stockholder Matters.
- --------------------------------------------------------------------------

a. Market Information. The Company's shares are traded on the Over The Counter
Bulletin Board stock exchange ("OTCBB") under the symbol, "TLCB". The following
table shows the high and low bid information for the period of inception through
September 30 2002 reported to the Company by the OTC Bulletin Board. Such
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.

2002 High Bid Low Bid
---- --------- --------
Inception to September 30 $.60 $.15

b. The Company has 198 shareholders of record as of September 30, 2002.

The Company has never declared or paid any dividends, and although there
are no restrictions limiting its ability to do so, it is unlikely to pay any
any dividends in the foreseeable future.

Item 6. Management's Discussion and Analysis or Plan of Operation.
--------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with the
Company financial statements and notes thereto included elsewhere in this Form
10-KSB as amended. Errors resulting in an understatement of previously reported
liabilities, par value of common stock, additional paid in capital, and deficit
accumulated during the development stage as of September 30, 2002, were
discovered by the management of telcoBlue during January 2003. Accordingly,
previously reported financial statements have been restated as of September 30,
2002, to correct the errors. Note 9 to the financial statements provides a
summary of the restatements.

Except for the historical information contained herein, the discussion in this
Form 10-KSB as amended contains certain forward looking statements that involve
risks and uncertainties, such as statements of the Company plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-KSB
should be read as being applicable to all related forward statements wherever
they appear in this Form 10-KSB. The Company actual results could differ
materially from those discussed here.

The Company is not aware of any circumstances or trends which would have a
negative impact upon future sales or earnings. There have been no material
fluctuations in the standard seasonal variations of the Company business. The
accompanying financial statements include all adjustments, which in the opinion
of management are necessary in order to make the financial statements not
misleading.

For the period from August 2, 2002 ("inception") through September 30, 2002, the
Company sustained a net loss of $42,390.

The Company has been devoting its efforts to activities such as raising capital,
establishing sources of information, and developing markets for its planned
operations. The Company has not yet generated any revenues and, as such, it is
considered a development stage company.

During the next twelve months, the Company will continue studying such things as
the hardware and software requirements of its operations, identifying and
evaluating acquisitions and related technology acquisitions. This will include
analyzing the many products that are available to satisfy the Company's future
technical support needs, with a focus on software and services that allow easy
expansion and/or upgrades as the customer base increases. All of the research
and findings prepared during this period will be compiled and used to set forth
future operating budgets for the Company that will include new customer
projections coupled with the capital and operating cash flow requirements
necessary to meet those projections.

Results of Operations
------------------------

The Company's "Total Liabilities and Stockholder's Equity (Deficit)" as of
September 30, 2002 was, $1,000.

Capital Resources and Liquidity
------------------------------------

At September 30, 2002, tecloBlue had working capital deficit of $42,126, total
stockholders' deficit of $214,898 and a net loss for the period from inception
through September 31, 2002 of $2,189,569. The net loss arises primarily from
$2,134,003 in share value issued to consultantants for August agreements,
$42,390 expenses incurrec to meet the Company's reporting requirements and an
interest expense of $13,176 (see Note 9). During the period from inception
through September 31, 2002, the operations were completely funded by stockholder
loans. telcoBlue is dependent upon its ability to raise capital and funding from
stockholders to fund expenses of operations.

There can be no assurance that the Company will be successful in raising
additional capital in the future, or that the stockholders will continue to lend
funds to the Company.

The Company anticipates that its current cash and cash equivalents and cash
generated from operations, if any, will not be sufficient to satisfy its
liquidity requirements for at least the next 12 months. The Company will require
additional funds prior to such time and will seek to sell additional equity or
debt securities or seek alternative sources of financing. If the Company is
unable to obtain this additional financing, it may be required to reduce the
scope of its planned sales and marketing and product development efforts, which
could harm its business, financial condition and operating results. In addition,
the Company may require additional funds in order to fund more rapid expansion,
to develop new or enhanced services or products or to invest in complementary
businesses, technologies, services or products. Additional funding may not be
available on favorable terms, if at all.

Events Subsequent to September 30, 2002
--------------------------------------------

In October and November 2002, telcoBlue sold 565,000 shares of telcoBlue common
stock for proceeds of $56,500, or $.10 per share.

Item 7. Financial Statements.
-------------------------------

The Financial Statements for the period from inception through September 30 2002
are attached hereto and incorporate herein as an Exhibit.

PART III
----------

Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
----------------------------------------------------------

Officers and Directors
-------------------------

The following chart sets forth information on our officers and directors:

Name Age Title
------------- --- -----------------------
Ron McIntyre 54 CEO, Chairman
Daniel Motsinger 51 Director
Dominic Martinez 31 Director, Secretary

Our Bylaws require that we have a minimum of one director. Directors are elected
at our annual meeting to be held on the 6th of November. Directors shall serve
until their successors are duly elected or appointed. A vacancy on the Board of
Directors may be filled by a majority vote of the remaining directors.

Biography of Directors:

Ron McIntyre, CEO and Chairman

Ron McIntyre has extensive management experience with technology companies and
start-ups in the United States and Canada. Included in his experience are three
corporate mergers/acquisitions. On March 19, 1998, as President of Visionary
Solutions (VSI:ASE), Mr. McIntyre signed merger documents for an Agresso
(UNI:Oslo) take over bid. In 1992, Mr. McIntyre also served on the Board of
Directors of Richmond Software (The Maximizer) until the company's merger with
Modatech (NASDAQ). In 1989, he joined Consumers Software Inc. as Director of
Sales & Marketing and was instrumental in increasing software sales by more than
500% until the company was acquired by Microsoft on April 8, 1991.

Dominic Martinez, Director, Secretary

Dominic T. Martinez, age 31, is a resident of Florence, CO. After graduating
from high school, Mr. Martinez attended the University of Southern Colorado as a
full time student, working summers. Upon graduation from the university (1994),
he worked at the Dayton-Hudson Corp. in the assets protection department. This
work experience influenced his choice to accept his next position as a Clinical
Therapist at a local hospital. Taking advantage of a business opportunity in the
year 2000, he assumed a business consulting position for Starr Consulting.
Working full time, and under the direction of other consultants, he gained
valuable experience. This experience, coupled with his education led him to the
position of Secretary and Director of telcoBlue, Inc.

Daniel Motsinger, Director

Mr. Motsinger is a resident of Winston Salem, NC. After graduating from high
school, Mr. Motsinger attended the Bob Jones University as a full time student,
Studying Business and Accounting. Following university (1971), Mr. Motsinger
joined Cahill and Swain in the men's apparel industry. After graduation from
sales to management, in 1985 Mr. Motsinger became a Partner of Cahill and Swain
and holds the position of Vice President and Secretary.

Identify Significant Employees
---------------------------------

As of the date of this registration statement, The Company has no persons, not
mentioned above, who are expected to make a significant contribution to the
business.

Family Relationships
---------------------

As of the date of this registration statement, there are no family relationships
between our promoters, executive officers, control persons, directors or persons
nominated for such positions.

Involvement in Certain Legal Proceedings
----------------------------------------

As of the date of this registration statement, the Company has had no events, to
the best of our knowledge, that occurred during the past five years, including
bankruptcies, criminal convictions or proceedings, court orders or judgments,
that are material to an evaluation of the ability or integrity of any director,
executive officer, promoter, control person or any person nominated for such
position.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company under Rule 16a-3(d) during its most recent two fiscal years (for the
period from inception through September 30 2002), and Forms 5 and amendments

thereto furnished to the Company with respect to its most recent two fiscal
years (for the period from inception through September 30 2002), and any written
representations received by the Company, the Company has not identified any
person who, at any time during the two preceding fiscal years (for the period
from inception through September 30 2002), was a director, officer, beneficial
owner of more than ten percent of the Company's outstanding common stock that
failed to file on a timely basis any reports required by Section 16(a) during
the most recent two fiscal years (for the period from inception through
September 30 2002) or any prior years.

Item 10. Executive Compensation.
------------------------------------

Ron McIntyre CEO $5,000

Except as identified in this section, none of the Company's executive officers
and directors received any compensation, cash or non-cash, during the period
from inception through September 30, 2002.

Item 11. Security Ownership of Certain Beneficial Owners and Management.
--------------------------------------------------------------------------------

The following table sets forth information as of September 30, 2002, regarding
the ownership of the Company's common stock by each shareholder known to the
Company to be the beneficial owner of more than five percent of its outstanding
shares of common stock, each director and all executive officers and directors
as a group. Except as otherwise indicated, each of the shareholders has sole
voting and investment power with respect to the shares of common stock
beneficially owned.

NAME AMOUNT OF COMMON STOCK PERCENT OF COMMON STOCK
BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
--------------------------------------------------------------------------------
1. Vocalscape
Networks, Inc.(2) 4,800,000 16%
2. Brian Fisher(3) 1,816,000 6%

(1) Out of 30,000,400 common stock shares.
(2) Vocalscape Networks, Inc., a British Columbia corporation.
(3) Brian Fisher was the President and Director of Wave Power.net, Inc. He vol-
untarily resigned on September 10, 2002.

Item 12. Certain Relationship and Related Transactions.
---------------------------------------------------------------
None.

Item 13. Exhibits and Reports on Form 10-KSB
-----------------------------------------------

EXHIBITS

EXHIBIT 2.1 Agreement and Plan of Reorganization

EXHIBIT 99.2 Certification

SIGNATURES
----------

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized this 21st day of March 2003.

TelcoBlue, Inc.

/s/ Ron McIntyre
-------------------------
By: Ron McIntyre, CEO