SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported) February 3, 2004
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TELE-OPTICS, INC.
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(Exact name of registrant as specified in Charter)

Delaware 000-161570 65-0008442
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(State of other Jurisdiction (Commission file no.) (IRS employer
of incorporation) identification no.)

48 S. Franklin Turnpike, 3rd Floor, Ramsey, NJ 07446
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(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (201-760-1030)
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2300 Glades Road, Suite 210, West Tower, Boca Raton, FL 33431
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(Former Name or Former Address, if Changed Since Last Report)

Forward Looking Statements

This Form 8-K and other reports we file from time to time with the
Securities and Exchange Commission (collectively the "Filings") contain or may
contain forward looking statements and information that are based upon beliefs
of, and information currently available to, our management as well as estimates
and assumptions made by our management. When used in the Filings the words
"anticipate", "believe", "estimate", "expect", "future", "intend", "plan" or the
negative of these terms and similar expressions as they relate to us or our
management identify forward looking statements. Such statements reflect our
current view with respect to future events and are subject to risks,
uncertainties, assumptions and other factors (including the risks contained in
the section of this report entitled "Risk Factors") relating to our industry and
our operations and results of operations. Should one or more of these risks or
uncertainties materialize, or should the underlying assumptions prove incorrect,
actual results may differ significantly from those anticipated, believed,
estimated, expected, intended or planned.

Although we believe that the expectations reflected in the forward
looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this report.

Item 1. Changes in Control of Registrant.

On February 3, 2004 (the "Effective Date"), we entered into and
consummated an Agreement and Plan of Merger (the "Merger Agreement") by and
among our wholly-owned subsidiary, TLOP Acquisition Company, L.L.C., a New
Jersey limited liability company ("Newco"), STB, Inc., a New Jersey corporation
("STB") and the stockholders of STB, John C. Kleinert, W. Peter Ragan, Sr. and
W. Peter Ragan, Jr. (collectively, the "Stockholders") . Pursuant to the Merger
Agreement, on the Effective Date, STB was merged with and into Newco (the
"Merger") and we issued to the Stockholders in exchange for all of the common
stock of STB issued and outstanding (a) an aggregate of 79,682,500 shares of our
common stock, par value $.001 per share (the "Common Stock"), (b) the right to
receive an aggregate of 23,505,000 additional shares of Common Stock upon our
amendment of our certificate of incorporation to increase the total number of
shares of capital stock that we are authorized to issue, and (c) warrants to
purchase for a period of five years an aggregate of 31,681,000 shares of Common
Stock at an exercise price of $.08 per share.

In connection with the Merger, we completed a private placement to an
accredited investor of 7,312,500 shares of Common Stock and a warrant
exercisable for a period of five years to purchase an aggregate of 7,312,500
shares of Common Stock at an exercise price of $.08 per share in exchange for an
aggregate cash consideration of $500,000. The proceeds of such private placement
will be used by us for working capital. In addition, certain of our existing
stockholders owning in the aggregate 9,846,653 shares of Common Stock sold for
approximately $5,000 in cash to Lomond International, Inc. and Harold Wine an
option to purchase such shares during the 30 day period commencing 91 days
following the Effective Date for an aggregate exercise price of $240,000. The
same existing stockholders also entered into an agreement with STB pursuant to
which such stockholders were granted the right to put 9,846,653 shares of Common
Stock to STB during the 30 day period commencing upon expiration of the option,
if such option is not exercised, for an aggregate put price of $240,000.

The 79,682,500 shares of Common stock issued to the Stockholders
together with the 7,312,500 shares of Common Stock issued in the private
placement represented approximately 87% of the total issued and outstanding
shares of our Common Stock on the date of issuance.

The details of the Merger, including all information required by Item
1. of this Current Report on Form 8-K (this "Report"), are set forth in Item 2.
"Acquisition or Disposition of Assets" below, the contents of which are
incorporated by reference herein.

Item 2. Acquisition or Disposition of Assets.

Overview of the Transaction

The information below is a summary description of the Merger Agreement
and is qualified in its entirety by reference to the Merger Agreement which we
have filed as an exhibit to this Report and related documents.

Pursuant to the Merger Agreement, on the Effective Date we issued to
each Stockholder per share of STB common stock held by such stockholder (a)
796,825 shares of our common stock, par value $.001 per share (the "Common
Stock"), (b) the right to receive 235,050 additional shares of Common Stock upon
our amendment of our certificate of incorporation to increase the total number
of shares of capital stock we are authorized to issue, and (c) warrants to
purchase for a period of five years 316,810 shares of Commons Stock at an
exercise price of $.08 per share. In exchange, each Stockholder conveyed to
Newco all of his STB common stock. The exchange ratio of shares of the Common
Stock for the common stock of STB was determined arbitrarily by the parties to
the Merger Agreement, and the parties did not assign any value to the shares of
Common Stock or the common stock of STB.

In connection with the Merger Agreement, the following transactions
took place on or before the Effective Date:

o Certain of our existing stockholders owning in the aggregate
9,846,653 shares of Common Stock sold for approximately $5,000
in cash to two parties that are not affiliated with us an
option to purchase such shares during the 30 day period
commencing 91 days following the Effective Date for an
aggregate exercise price of $240,000.

o The same existing stockholders also entered into an agreement
with STB pursuant to which such stockholders were granted the
right to put 9,846,653 shares of Common Stock to STB during
the 30 day period commencing upon expiration of the option, if
the option is not exercised, for an aggregate put price of
$240,000.

o Some of the same existing stockholders also entered into an
agreement with us pursuant to which they agreed not to sell
certain additional shares of our common stock held by them
during the 180 day period following the Effective Date and we
agreed not to subdivide or combine our common stock (other
than one reverse stock split not to exceed one new share for
each 13 existing shares) or sell shares of common stock or
warrants to purchase shares on common stock at a per share
price of less than $.0677 during the one year period following
the Effective Date.

o A private placement to an accredited investor of 7,312,500
shares of Common Stock and a warrant exercisable for a period
of five years to purchase an aggregate of 7,312,500 shares of
Common Stock at an exercise price of $.08 per share in
exchange for an aggregate cash consideration of $500,000.

o Mr. John C. Kleinert agreed that as soon as practical after we
authorize a series of preferred stock, he would convert all of
the debt owed by us and our subsidiaries to him into shares of
such preferred stock.

o Messrs. John Little, Bert Gusrae and David A. Carter, all of
our directors at the time, appointed Susan M. Massinger as a
director and resigned as directors.

o Each of our officers resigned from their respective offices,
and Ms. Massinger, our sole director, appointed Mr. John C.
Kleinert, the President of STB, as our President and Chief
Executive Officer, Mr. W. Peter Ragan, Sr. as our Vice
President and Mr. W. Peter Ragan, Jr. as our Treasurer,
Secretary and Chief Financial Officer.

o Subject to and effective upon compliance with Rule 14f-1 under
the Securities Exchange Act of 1934, Ms. Massinger appointed
Messrs Kleinert, Ragan and Ragan as members of our new board
of directors and tendered her resignation as a director.

In addition, the parties to the Merger Agreement agreed that as soon as
practical following the Effective Date but in no event later than one year
following the Effective Date, to convene a stockholders meeting or take such
other action as may be necessary or appropriate to (a) increase our authorized
capital by amending our certificate of corporation to permit the issuance of the
shares underlying the right to receive additional shares of our Common Stock
issued to the Stockholders and the warrants issued to the Stockholders and in
the private placement and (b) authorize a series of preferred stock.

Description of Our Pre-existing Business

We were incorporated in December 1986 for the purpose of acquiring all
of the common stock of Lenzar Optics, Inc. ("Lenzar"). Lenzar was then engaged
in development, manufacture and marketing of a variety of optical, electronic
and electro-optical products for use in the medical and defense industries. In
September, 1991, we sold all of our assets related to Lenzar's operations to a
third party. Since that sale, we have had virtually no active business
operations. On November 21, 1997 (the "Closing Date"), new investors, including
our management immediately prior to the Effective Date, purchased approximately
sixty-two (62%) percent of our then issued and outstanding Common Stock as of
the Closing Date. Since that time, those investors and others have provided
additional funds in the form of equity investment and loans to ensure our
viability and permit us to continue our limited operations and pursue business
opportunities, including a possible business combination, merger or similar
transaction.

In 2003, we formed Newco, a wholly-owned New Jersey limited liability
company, to facilitate the Merger. The Merger of STB with and into Newco was
consummated on February 3, 2004. Between the shares issued to the Stockholder in
the Merger and the shares issued in the private placement, the Stockholders and
the new stockholder control approximately 86% of our issued and outstanding
shares of capital stock immediately after the Merger. Accordingly, the
acquisition has been treated as a reverse acquisition. As a result of the
Merger, we now carry on business through our wholly-owned subsidiary Newco,
which maintains its executive offices at 48 South Franklin Turnpike, 3rd Floor,
Ramsey, NJ 07746 and its business offices at 3100 Route 138 West, Wall, New
Jersey 07719. Unless the context otherwise requires, the terms "we," "us" or
"our" as used hereinafter refer to Tele-Optics, Inc. (the "Company") and our
subsidiaries, including Newco and its subsidiaries J. Holder, Inc., VOM, LLC and
Velocity Investments, L.L.C.

Description of the Business formerly operated by STB and currently operated by
us

Prior to the Merger, STB, Inc. was a New Jersey Corporation that was
formed in 2003. Its primary purpose was to act as a holding company for three
subsidiaries, J Holder, Inc., VOM, LLC and Velocity Investments, LLC. These
companies acquire, manage, collect and service receivable portfolios.

J. Holder, Inc. -- J. Holder, Inc. ("J Holder") was formed in 1998 to
invest in, and maximize the return on, real property being sold at sheriff's
foreclosure sales and judgment execution sales, defaulted mortgages, partial
interests in real property and the acquisition of real property with clouded
title. These investments are made at discounts to fair market value focusing on
acquiring the property for re-sale or perfecting the partial interest and/or
clouded title for resale.

VOM, LLC -- VOM, LLC (" VOM") was formed in 2002 to invest in and
maximize the return on New Jersey Municipal Tax Liens. VOM focuses on
maximization of profit through legal collections and owned real estate
opportunities presented by the current tax lien environment.

Velocity Investments, L.L.C. -- Velocity Investments, LLC ("Velocity")
was established in 2002 to invest in, and maximize the return on, consumer debt
purchased on the secondary market. Velocity purchases consumer debt portfolios
at a discount and then liquidates these portfolios through legal collection
means. Velocity employs advanced technology and extensive management experience
to plan, execute against and exceed desired business objectives.

We acquire receivable portfolios at a significant discount to the
amount actually owed by the obligors. We acquire these portfolios after a
qualitative and quantitative analysis of the underlying receivables and
calculate the purchase price so that our estimated cash flow offers us an
adequate return on our acquisition costs and servicing expenses. After
purchasing a portfolio, we actively monitor its performance and review and
adjust our collection and servicing strategies accordingly.

We purchase receivables from creditors and others through privately
negotiated direct sales and auctions in which sellers of receivables seek bids
from several pre-qualified debt purchasers. We pursue new acquisitions of
receivable portfolios on an ongoing basis through our relationships with
industry participants, collection agencies, investors and our financing sources,
brokers who specialize in the sale of receivable portfolios and other sources.
Portfolios are purchased through internally generated cash flow, seller financed
credit lines/leases and through traditional leverage methods.

Our objective is to maximize our return on investment on acquired
receivable portfolios. As a result, before acquiring a portfolio, we analyze the
portfolio to determine how to best maximize collections in a cost efficient
manner. Then we outsource the legal collection process to third parties to keep
actual overhead at a minimum.

For the years ended December 31, 2001 and 2002, our revenues from J
Holder were approximately $4.7 million and $3.8 million respectively, and our
net income from J Holder was approximately $4,686 and a loss of $28,247,
respectively. For the first six months of 2003 our revenue from J Holder, VOM
and Velocity on a consolidated basis was $1.9 million and our net loss was
approximately $9,852.

Industry Overview

The purchasing, servicing and collection of charged-off,
semi-performing and performing receivables is a growing industry that is driven
by many factors including:

o increasing levels of debt;

o increasing defaults of the underlying receivables;

o increasing utilization of third-party providers to collect
such receivables;

o fluctuating employment environment exacerbated by overseas
outsourcing;

o challenged municipal governments raising property taxes to
bridge budgetary gaps;

o increasing values in a real estate market driven by high
refinancing activity as a means to maintain lifestyles; and

o mounting debt and pressure on banks and financial institutions
to remove nonperforming or unattractive investments from their
balance sheets.

According to a US Federal Reserve release dated November 2003, consumer
debt was $1.9 trillion and growing at an annual rate of 2.5%. We believe that as
a result of the difficulty in collecting these receivables and the desire of
originating institutions to focus on their core businesses and to generate
revenue from these receivables, originating institutions are increasingly
electing to sell these portfolios.

Strategy

Our primary objective is to utilize our management's experience and
expertise to effectively grow our business by identifying, evaluating, pricing
and acquiring receivable portfolios and maximizing collections of such
receivables in a cost efficient manner. Our strategy includes:

o managing the legal collection and servicing of our receivable
portfolios;

o outsourcing much of the basic due diligence to maintain low
fixed overhead;

o outsourcing most of the legal collection processes;

o expanding geographically while maintaining the same management
of the legal collection and servicing of receivable
portfolios;

o increasing and expanding financial flexibility and leverage
through increased capital lines of credit;

o capitalizing on our strategic relationships to identify and
acquire receivable portfolios; and

o expanding our business through the purchase of receivables
from new and existing sources.

We believe that as a result of our management's experience and
expertise, and the fragmented yet growing market in which we operate, we are
well-positioned to successfully implement our strategy.

Receivables Purchase Program

We purchase receivable portfolios that include charged-off receivables,
semi-performing receivables and performing receivables as well as real property
being sold at sheriff's foreclosure sales and judgment execution sales,
defaulted mortgages, partial interests in real property and real property with
clouded title. We identify potential portfolio acquisitions on an ongoing basis
through our relationships with industry participants, collection agencies,
investors and our financing sources, brokers who specialize in the sale of
receivable portfolios and other sources.

Historically, the purchase prices of the receivable portfolios that we
have acquired have been as large as $1.4 million. Although to date we have only
purchased claims on our own behalf we would and have considered entering into
joint ventures and seller participation arrangements. We have entered into
profit sharing agreements with our sources of financing and our third-party
service providers as a further way to reduce actual ongoing overhead.

We utilize our relationships with brokers, servicers and sellers of
portfolios to locate portfolios for purchase. Our senior management is
responsible for:

o coordinating due diligence, including in some cases on-site
visits to the seller's office;

o stratifying and analyzing the portfolio characteristics;

o valuing the portfolio;

o preparing bid proposals;

o negotiating pricing and terms;

o closing the purchase; and

o coordinating the receipt of account documentation for the
acquired portfolios.

The seller or broker typically supplies us with either a sample listing
or the actual portfolio being sold on compact disk, a diskette or other form of
media. We analyze each receivable portfolio to determine if it meets our
purchasing criteria. We may then prepare a bid or negotiate a purchase price. If
a purchase is completed, senior management monitors the portfolio's performance
and uses this information in determining future buying criteria and pricing.

We purchase receivables at substantial discounts from the balance
actually owed by the obligor. We determine how much to bid on a portfolio and a
purchase price by evaluating many different variables, such as:

o the number of collection agencies previously attempting to
collect the receivables in the portfolio;

o the average balance of the receivables;

o the age of the receivables;

o number of days since charge-off;

o payments made since charge-off; and

o the locations of the obligors.

Once a receivable portfolio has been identified for potential purchase,
we prepare quantitative analyses to analyze the potential collectibility of the
portfolio. We also analyze the portfolio by comparing it to similar portfolios
previously acquired by us. In addition, we perform qualitative analyses of other
matters affecting the value of portfolios, including a review of the
delinquency, charge off, placement and recovery policies of the originator as
well as the collection authority granted by the originator to any third party
collection agencies, and, if possible, by reviewing their recovery efforts on
the particular portfolio. After these evaluations are completed, members of our
senior management discuss the findings, decide whether to make the purchase and
finalize the price at which we are willing to purchase the portfolio.

We have purchased most of our receivable portfolios on the secondary
market but are actively seeking portfolios directly from originators. From time
to time we purchase receivable portfolios directly from originators and other
sellers, including auction type sales in which sellers of receivables seek bids
from several pre-qualified debt purchasers. In order for us to consider a
potential seller as a source of receivables, a variety of factors are
considered. Sellers must demonstrate that they have:

o adequate internal controls to detect fraud;

o the ability to provide post sale support; and

o the capacity to honor buy-back and return warranty requests.

Generally, our portfolio purchase agreements provide that we can return
certain accounts to the seller. However, in some transactions, we may acquire a
portfolio with few, if any, rights to return accounts to the seller. After
acquiring a portfolio, we conduct a detailed analysis to determine which
accounts in the portfolio should be returned to the seller. Although the terms
of each portfolio purchase agreement differ, examples of accounts that may be
returned to the seller include:

o debts paid prior to the cutoff date;

o debts in which the obligor filed bankruptcy prior to the
cutoff date; and

o debts in which the obligor was deceased prior to the cutoff
date.

We sometimes use third-parties to determine bankrupt and deceased
obligors, which allows us to focus our resources on portfolio collections. Under
a typical portfolio purchase agreement, the seller refunds the portion of the
purchase price attributable to the returned accounts or delivers replacement
receivables to us. Occasionally, we will acquire a well seasoned portfolio at a
reduced price from a seller that is unable to meet all of our purchasing
criteria. When we acquire such portfolios, the purchase price is discounted
beyond the typical discounts we receive on the portfolios we purchase that meet
our purchasing criteria.

Receivable Servicing

Therefore, if we are successful in acquiring the portfolios, we can
promptly process the receivables that were purchased and commence the collection
process. Unlike collection agencies that typically have only a specified period
of time to recover a receivable, as the portfolio owners we have significantly
more flexibility in establishing payment programs.

Once a portfolio has been acquired, we download all receivable
information provided by the seller into our account management system and
reconcile certain information with the information provided by the seller in the
purchase contract. We or our servicers send notification letters to obligors of
each acquired account explaining, among other matters, our new ownership and
asking that the obligor contact us or our servicers to make payment
arrangements. Most of our collection efforts are managed by STB but are
outsourced to third party servicers.

Portfolio Sales

From time to time STB resells properties, positions in properties and
portfolios to the general public. STB sells properties, positions in properties
and portfolios as a way to further generate revenue and to eliminate unwanted or
uncollectible properties, positions in properties and portfolios.

Marketing

The Company has established relationships with brokers who market
receivable portfolios from banks, finance companies and other credit providers.
In addition, the Company subscribes to national publications that list
receivable portfolios for sale. The Company also directly contacts banks,
finance companies or other credit providers to solicit receivables for sale.

Competition

Our business of purchasing distressed receivables is highly competitive
and fragmented, and we expect that competition from new and existing companies
will increase. We compete with:

o other purchasers of receivables, including third-party
collection companies; and

o other financial services companies that purchase receivables.

Some of our competitors are larger and more established and may have
substantially greater financial, technological, personnel and other resources
than we have, including greater access to capital markets. We believe that no
individual competitor or group of competitors has a dominant presence in the
market.

We compete with our competitors for receivable portfolios based on many
factors, including:

o purchase price;

o representations, warranties and indemnities requested;

o speed in making purchase decisions; and

o our reputation.

Our strategy is designed to capitalize on the market's lack of a
dominant industry player. We believe that our management's experience and
expertise in identifying, evaluating, pricing and acquiring receivable
portfolios and managing collections coupled with our strategic alliances with
third-party servicers and our sources of financing give us a competitive
advantage. However, we cannot assure that we will be able to compete
successfully against current or future competitors or that competition will not
increase in the future.

Management Information Systems

We believe that a high degree of automation is necessary to enable us
to grow and successfully compete with other finance companies. Accordingly, we
continually upgrade our computer software and, when necessary, our hardware to
support the servicing and recovery of receivables that we acquire. Our
telecommunications and computer systems allow us to quickly and accurately
process the large amount of data necessary to purchase and service receivable
portfolios. Due to our desire to increase productivity through automation, we
periodically review our systems for possible upgrades and enhancements.

Government Regulation

The relationship of obligors and a creditor is extensively regulated by
federal, state and municipal laws, rules, regulations and ordinances. These laws
include, but are not limited to, the following statutes and regulations: the
Fair Debt Collection Practices Act, the Federal Truth-In-Lending Act, the Fair
Credit Billing Act, the Equal Opportunity Act, the Fair Foreclosure Act and the
Fair Credit Reporting Act, as well as comparable statutes in states where
obligors reside and/or where creditors are located. Among other things, the laws
and regulations applicable to various creditors impose disclosure requirements
regarding the advertisement, application, establishment and operation of credit
accounts or other types of credit programs. Federal law requires a creditor to
disclose to an obligor, among other things, the interest rates, fees, grace
periods and balance calculations methods associated with their accounts. In
addition, obligors are entitled to have payments and credits applied to their
accounts promptly, to receive prescribed notices and to require billing errors
to be resolved promptly. In addition, some laws prohibit certain discriminatory
practices in connection with the extension of credit. Further, state laws may
limit the interest rate and the fees that a creditor may impose on obligors.
Failure by a creditor to comply with applicable laws could create claims and
rights of offset that would reduce or eliminate a obligor's obligations, which
could have a material adverse effect on our operations. Pursuant to agreements
under which we purchase receivables, we are typically indemnified against losses
resulting from the failure of the creditor to have complied with applicable laws
relating to the receivables prior to our purchase of such receivables.

Certain laws, including the laws described above, may limit our ability
to collect amounts owing with respect to the receivables regardless of any act
or omission on our part. For example, under the Fair Credit Billing Act, a
credit card issuer may be subject to certain claims and defenses arising out of
certain transactions in which a credit card is used if the consumer has made a
good faith attempt to obtain satisfactory resolution of a problem relative to
the transaction and, except in cases where there is a specified relationship
between the person honoring the card and the credit card issuer, the amount of
the initial transaction exceeds $50 and the place where the initial transaction
occurred was in the same state as the consumer's billing address or within 100
miles of that address. Accordingly, as a purchaser of defaulted receivables, we
may purchase receivables subject to valid defenses on the part of the obligor.
Other laws provide that, in certain instances, obligors cannot be held liable
for, or their liability is limited to $50 with respect to, charges to the credit
card credit account that were a result of an unauthorized use of the credit card
account. No assurances can be given that certain of the receivables were not
established as a result of unauthorized use of a credit card account, and,
accordingly, the amount of such receivables may not be collectible by us.

Several federal, state and municipal laws, rules, regulations and
ordinances, including, but not limited to, the Fair Debt Collection Practices
Act and the Federal Trade Commission Act and comparable state statutes regulate
debt collection activity. Although, for a variety of reasons, we may not be
specifically subject to the FDCPA and certain state statutes specifically
addressing third-party debt collectors, it is our policy to comply with
applicable laws in our collection activities. To the extent that some or all of
these laws apply to our collection activities, failure to comply with such laws
could have a materially adverse effect on us.

Additional laws may be enacted that could impose additional
restrictions on the servicing and collection of receivables. Such new laws may
adversely affect the ability to collect the receivables.

Because the receivables were originated and serviced pursuant to a
variety of federal laws by a variety of entities there can be no assurance that
all original servicing entities have at all times been in substantial compliance
with applicable law. Additionally, there can be no assurance that we or our
servicers have been or will continue to be at all times in substantial
compliance with applicable law. The failure to comply with applicable law could
materially adversely affect our ability to collect our receivables and could
subject us to increased costs, fines and penalties.

We currently hold a number of licenses issued under applicable credit
laws. Certain of our current licenses and any licenses that we may be required
to obtain in the future may be subject to periodic renewal provisions and/or
other requirements. Our inability to renew licenses or to take any other
required action with respect to such licenses could have a material adverse
effect upon our results of operation and financial condition.

Facilities

Both our executive/corporate offices at 48 South Franklin Turnpike, 3rd
Floor, Ramsey, NJ 07746 and our business office at 3100 Route 138 West, Wall,
New Jersey 07719 are located in leased space. The executive/corporate office is
approximately 500 square feet and is subject to a one year lease from an
unrelated third party and has an annual lease payment of $12,000. The business
office is approximately 1000 square feet and is subject to a two year lease from
a company owned by Messrs. Ragan and has an annual lease payment of $6,000.

Employees

We currently have one full time employee. Most of our collection
activities are outsourced and managed by corporate officers. None of our
employees are covered by a collective bargaining agreement. We consider our
relationship with our employee to be good. We anticipate the hiring of a
bookkeeper, property assistant and collection assistant in the near future.

Information Concerning Executive Officers And Directors

Executive Officers

Our new executive officers are identified in the table below.

Year Became an
Name Age Executive Officer Positions
---- --- ----------------- ---------

John C. Kleinert 45 2004 President, Chief Executive Officer(1)
W. Peter Ragan, Sr. 57 2004 Vice President(1)
W. Peter Ragan, Jr. 33 2004 Treasurer, Secretary and Chief Financial
Officer

(1) Such person will become a member of our board of directors upon compliance
with Rule 14f-1 under the Securities Exchange Act of 1934.

(a) There are no material proceedings known to us to which any of our
directors, officers or affiliates, or any owner of record or beneficial owner of
more than 5% of any class of our voting securities, or any affiliate of such
persons is a party adverse to us or has a material interest adverse to our
interests.

(b) The following brief biographies contain information about our
directors and our executive officer. The information includes each person's
principal occupation and business experience for at least the past five years.
This information has been furnished to us by the individuals named. Except for
the relationship of Mr. Ragan, Sr. and Mr. Ragan, Jr., who are father and son,
there are no family relationships known to us between the directors and
executive officers. We do not know of any legal proceedings that are material to
the evaluation of the ability or integrity of any of the directors or executive
officers.

John C. Kleinert earned a Bachelor of Science degree in Chemical
Engineering from Princeton University in 1981. In 1982 Mr. Kleinert was hired by
Goldman Sachs in New York and from 1982-1990 he traded various municipal
products and was appointed head of the Municipal Trading Desk in 1991. In 1994
Mr. Kleinert was elected a general partner of the firm and served in that
capacity until the end of 1997 when he retired and became a limited partner.
Since retiring from Goldman Sachs, Mr. Kleinert has pursued several business
ventures. He manages a trading operation, JCK Investments, which invests in
equities, bonds, commodities and options. He is also a co-founder or our
company.

Susan M. Massinger was appointed to the Company's Board of Directors
effective February 3, 2004. Since 1992, Ms. Massinger has been employed by David
A. Carter, P.A. in Boca Raton, Florida, as a legal assistant. Ms. Massinger was
employed by various brokerage firms in New York and Florida from 1981 through
1992 and has an extensive background in the securities industry working in
operations.

W. Peter Ragan, Sr. received a Bachelor of Science in Marketing from
LaSalle University in 1968 and earned his law degree from the Seton Hall
University School of Law in 1974. Since his graduation he has practiced
primarily in the area of creditor's rights. Mr. Ragan practiced with the firm of
Schaefer and Crawford in Ocean Township, New Jersey, from 1974 to 1979 where he
specialized in municipal law and creditor's rights. From 1979 through May of
1998, Mr. Ragan was a principal of Blankenhorn & Ragan, PC, and its predecessor
partnership. In May of 1998, the firm of Ragan & Ragan, PC was created where Mr.
Ragan is presently senior partner and continues with his focus upon creditor's
rights. Mr. Ragan has been a member of the New Jersey State Bar since 1974 and
is also admitted to practice before the United States District Court for the
District of New Jersey, United States Third Circuit Court of Appeals and the
United States Supreme Court. Mr. Ragan is also a co-founder of our company.

W. Peter Ragan, Jr. earned a Bachelor of Science in Management and
Marketing from Manhattan College 1992 and graduated, cum laude, from the Seton
Hall University School of Law in May of 1996. Most recently, Mr. Ragan received
a Masters Degree in Business Administration from Monmouth University in 2001.
After Mr. Ragan's graduation from Seton Hall he was employed by Blankenhorn &
Ragan, PC as a litigation associate. He has handled cases involving creditor's
rights, collection and bankruptcy litigation practice. In May of 1998, Mr. Ragan
became a partner in the firm Ragan & Ragan, PC and now manages Ragan & Ragan,
PC's volume collection practice. Mr. Ragan is a member of the New York and New
Jersey State Bars and is also admitted to practice before the United States
District of New Jersey, the United States District Court for the Southern
District of New York, and the United States Third Circuit Court of Appeals. Mr.
Ragan is also a co-founder of our company.

(c) Mr. Kleinert is the President and Chief Executive Officer of
Newco and the Company. He is not being compensated for this function at this
time and his future salary for such function has not yet been determined. Mr.
Ragan, Sr. is the Vice President of Newco and the Company. He is not being
compensated for this function at this time and his future salary for such
function has not yet been determined. Mr. Ragan, Jr. is the Secretary, Treasurer
and the Chief Financial Officer of Newco and the Company. He is not being
compensated for this function at this time and his future salary for such
function has not yet been determined

(d) Mr. Kleinert is the President and sole officer of J Holder.
Mr. Kleinert is not being compensated for this function at this time and his
future salary for such function has not yet been determined. Mr. Ragan, Sr. is
the President and sole officer of VOM. Mr. Ragan, Sr. is not being compensated
for this function at this time and his future salary for such function has not
yet been determined. Mr. Ragan, Jr. is the President and sole officer of
Velocity. Mr. Ragan, Jr. is not being compensated for this function at this time
and his future salary for such function has not yet been determined.

Board of Directors

Our new board of directors are identified in the table below.

Year Became a
Name Age Director Background
---- --- -------- ----------
John C. Kleinert(1) 45 2004 Co-Founder
Susan M. Massinger(2) 40 2004 Operations
W. Peter Ragan, Sr.(1) 57 2004 Co-Founder
W. Peter Ragan, Jr.(1) 33 2004 Co-Founder

(1) Such person was appointed a member of our board of directors contingent on
compliance with Rule 14f-1 under the Securities Exchange Act of 1934.

(2) Such person has resigned as a member of our board of directors effective
immediately after the persons identified above become directors.

(a) There are no material proceedings known to us to which any of
our directors, officers or affiliates, or any owner of record or beneficial
owner of more than 5% of any class of our voting securities, or any affiliate of
such persons is a party adverse to us or has a material interest adverse to our
interests.

(b) None of our directors earn any additional compensation for
his or her services as a director. Non-management directors receive no salary
for their services as such, but may participate in the Company's stock option
plans. The board of directors has authorized payment of reasonable travel or
other out-of-pocket expenses incurred by non-management directors in attending
meetings of the board of directors and committees thereof.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information available to us, as of
February 3, 2003 with respect to the beneficial ownership of the outstanding
shares of Common Stock by (i) any holder of more than five percent (5%) of the
outstanding shares; (ii) our officers and directors; and (iii) our officers and
directors as a group:

Name and Address of Beneficial Owner(1) Shares of Common Stock Owned Percentage (%) of Common Stock(2)
- --------------------------------------- ---------------------------- --------------------------------

David Grantatell(3) 7,312,500 7.3%
John C. Kleinert(4)(6) 39,841,250 39.8%
Susan M. Massinger(6)(7) 0 0%
W. Peter Ragan, Sr.(5)(6) 19,920,625 19.9%
W. Peter Ragan, Jr.(5) 19,920,625 19.9%
All officers and directors as a group
(four persons) 79,682,500 79.6%

(1) Beneficial ownership as reported in the table above has been determined in
accordance with Instruction (1) to Item 403 (b) of Regulation S-B of the
Securities Exchange Act of 1934.

(2) Percentages are approximate.

(3) The business address of Mr. Grantatell is 125 Main Avenue, Elwood Park, NJ.

(4) The business address of Mr. Kleinert is 48 South Franklin Turnpike, 3rd Fl,
Ramsey, NJ.

(5) The business address of the stockholder, director or officer, as the case
may be, noted above is 3100 Rt. 138 West, Wall, NJ.

(6) Subject to and effective upon compliance with Rule 14f-1 under the
Securities Exchange Act of 1934, Ms. Massinger appointed Messrs. Kleinert,
Ragan and Ragan as members of our new board of directors and tendered her
resignation.

(7) The business address of Ms. Massinger is 2300 Glades Road, Suite 210, West
Tower, Boca Raton, FL 33431.

Risk Factors

We are a New Venture with a Limited Operating History

Prior to the Merger, our company had been inactive since 1991. STB was organized
in 2003 and none of its subsidiaries has been in business for more than five
years. Due to our limited operating history, our ability to operate successfully
is materially uncertain and our operations and prospects are subject to all
risks inherent in a developing business enterprise. Our limited operating
history also makes it difficult to evaluate our long term commercial viability.
Our potential for success must be evaluated in light of the problems, expenses
and difficulties frequently encountered by new businesses in general and the
collection services business specifically.

We May Not be Able to Purchase Receivable Portfolios at Favorable Prices or on
Sufficiently Favorable Terms or at All.

Our success depends upon the continued availability of receivable portfolios
that meet our purchasing criteria and our ability to identify and finance the
purchases of such portfolios. The availability of receivable portfolios at
favorable prices and on terms acceptable to us depends on a number of factors
outside of our control, including:

o the continuation of the current growth trend in debt;

o the continued volume of receivable portfolios available for
sale; and

o competitive factors affecting potential purchasers and sellers
of receivable portfolios.

The market for acquiring receivable portfolios is becoming more competitive,
thereby possibly diminishing our ability to acquire such receivables at
attractive prices in future periods.

The growth in debt may also be affected by:

o a slowdown in the economy;

o reductions in consumer spending;

o changes in the underwriting criteria by originators; and

o changes in laws and regulations governing lending.

Any slowing of the consumer debt growth trend could result in a decrease in the
availability of receivable portfolios for purchase that could affect the
purchase prices of such portfolios. Any increase in the prices we are required
to pay for such portfolios in turn will reduce the profit, if any, we generate
from such portfolios.

We May Not be Able to Recover Sufficient Amounts on Our Receivable Portfolios to
Recover the Costs Associated with the Purchase and Servicing of Those Portfolios
and to Fund Our Operations.

We acquire and collect on receivable portfolios that contain charged-off,
semi-performing and performing receivables. In order to operate profitably over
the long term, we must continually purchase and collect on a sufficient volume
of receivables to generate revenue that exceeds our costs. For accounts that are
charged-off or semi-performing, the originators or interim owners of the
receivables generally have:

o made numerous attempts to collect on these obligations, often
using both their in-house collection staff and third-party
collection agencies;

o subsequently deemed these obligations as uncollectible; and

o charged-off these obligations.

These receivable portfolios are purchased at significant discounts to the amount
the obligor owes. These receivables are difficult to collect and actual
recoveries may vary and be less than the amount expected. In addition, our
collections may worsen in a weak economic cycle. We may not recover amounts in
excess of our acquisition and servicing costs.

Our ability to recover on our portfolios and produce sufficient returns can be
negatively impacted by the quality of the purchased receivables. In the normal
course of our portfolio acquisitions, some receivables may be included in the
portfolios that fail to conform to certain terms of the purchase agreements and
we may seek to return these receivables to the seller for payment or replacement

receivables. However, we cannot guarantee that any of such sellers will be able
to meet their payment obligations to us. Accounts that we are unable to return
to sellers may yield no return. If cash flows from operations are less than
anticipated as a result of our inability to collect sufficient amounts on our
receivables, our ability to satisfy our debt obligations, purchase new
portfolios and our future growth and profitability may be materially adversely
affected.

We are Subject to Competition for the Purchase of Receivable Portfolios.

We compete with other purchasers of receivable portfolios, with third-party
collection agencies and with financial services companies that manage their own
receivable portfolios. We compete on the basis of reputation, industry
experience and performance. Some of our competitors have greater capital,
personnel and other resources than we have. The possible entry of new
competitors, including competitors that historically have focused on the
acquisition of different asset types, and the expected increase in competition
from current market participants may reduce our access to receivable portfolios.
Aggressive pricing by our competitors could raise the price of receivable
portfolios above levels that we are willing to pay, which could reduce the
number of receivable portfolios suitable for us to purchase or if purchased by
us, reduce the profits, if any, generated by such portfolios. If we are unable
to purchase receivable portfolios at favorable prices or at all, our revenues
and earnings could be materially reduced.

Our Collections on Unsecured Receivables May Decrease if Bankruptcy Filings
Increase.

During times of economic recession, the amount of defaulted receivables
generally increases, which contributes to an increase in the amount of personal
bankruptcy filings. Under certain bankruptcy filings an obligor's assets are
sold to repay credit originators, but since certain of the receivables we
purchase are unsecured we often would not be able to collect on those
receivables. We cannot assure you that our collection experience would not
decline with an increase in bankruptcy filings. If our actual collection
experience with respect to our unsecured receivables portfolio is significantly
lower than we projected when we purchased the portfolio, our earnings could be
negatively affected. We use estimates for recognizing revenue on a majority of
our receivable portfolio investments and our earnings would be reduced if actual
results are less than estimated.

We recognize finance income on a majority of our receivable portfolios using the
interest method. We only use this method if we can reasonably estimate the
expected amount and timing of cash to be collected on a specific portfolio based
on historic experience and other factors. Under the interest method, we
recognize finance income on the effective yield method based on the actual cash
collected during a period, future estimated cash flows and the portfolio's
carrying value prior to the application of the current quarter's cash
collections. The estimated future cash flows are reevaluated quarterly. If
future cash collections on these portfolios were less than what was estimated,
we would recognize less than anticipated finance income or possibly an expense
that would reduce our earnings during such periods. Any reduction in our
earnings could materially adversely affect our stock price.

We May Not be Successful at Acquiring Receivables of New Asset Types or in
Implementing a New Pricing Structure.

We may pursue the acquisition of receivable portfolios of asset types in which
we have little current experience. We may not be successful in completing any
acquisitions of receivables of these asset types and our limited experience in
these asset types may impair our ability to collect on these receivables. This
may cause us to pay too much for these receivables, and consequently, we may not
generate a profit from these receivable portfolio acquisitions.

The Loss of Any of Our Executive Officers May Adversely Affect Our Operations
and Our Ability to Successfully Acquire Receivable Portfolios.

Mr. Kleinert, our President and Chief Executive Officer, Mr. Ragan, Sr., our
Vice President, and Mr. Ragan, Jr. our Treasurer, Secretary and Chief Financial
Officer, are responsible for making substantially all management decisions,
including determining which portfolios to purchase, the purchase price and other
material terms of such portfolio acquisitions. These decisions are instrumental
to the success of our business. The loss of the services of Mr. Kleinert, Mr.
Ragan, Sr. or Mr. Ragan, Jr. could disrupt our operations and adversely affect
our ability to successfully acquire receivable portfolios.

We Have Experienced Rapid Growth Over the Past Several Years, Which has Placed
Significant Demands on Our Administrative, Operational and Financial Resources
and Could Result in an Increase in Our Expenses.

We plan to continue our growth, which could place additional demands on our
resources and cause our expenses to increase. Future internal growth will depend
on a number of factors, including:

o the effective and timely initiation and development of
relationships with sellers of receivable portfolios and
strategic partners;

o our ability to maintain the collection of receivables
efficiently; and

o the recruitment, motivation and retention of qualified
personnel.

Sustaining growth will also require the implementation of enhancements to our
operational and financial systems and will require additional management,
operational and financial resources. There can be no assurance that we will be
able to manage our expanding operations effectively or that we will be able to
maintain or accelerate our growth and any failure to do so could adversely
affect our ability to generate revenues and control our expenses.

Government Regulations May Limit Our Ability to Recover and Enforce the
Collection of Our Receivables.

Federal, state and municipal laws, rules, regulations and ordinances may limit
our ability to recover and enforce our rights with respect to the receivables
acquired by us. These laws include, but are not limited to, the following
federal statutes and regulations promulgated thereunder and comparable statutes
in states where obligors reside and/or where creditors are located:

o the Fair Debt Collection Practices Act;

o the Federal Trade Commission Act;

o the Truth-In-Lending Act;

o the Fair Credit Billing Act;

o the Equal Credit Opportunity Act; and

o the Fair Credit Reporting Act.

o the Fair Foreclosure Act.

We may be precluded from collecting receivables we purchase where the creditor
or other previous owner or servicer failed to comply with applicable law in
originating or servicing such acquired receivables. Laws relating to the
collection of consumer debt also directly apply to our business. Our failure to
comply with any laws applicable to us, including state licensing laws, could
limit our ability to recover on receivables and could subject us to fines and
penalties, which could reduce our earnings and result in a default under our
loan arrangements

Additional laws may be enacted that could impose additional restrictions on the
servicing and collection of receivables. Such new laws may adversely affect the
ability to collect on our receivables which could also adversely affect our
revenues and earnings.

Class Action Suits and Other Litigation in Our Industry Could Divert Our
Management's Attention from Operating Our Business and Increase Our Expenses.

Certain originators and servicers in the consumer credit industry have been
subject to class actions and other litigation. Claims include failure to comply
with applicable laws and regulations and improper or deceptive origination and

servicing practices. If we become a party to such class action suits or other
litigation, our results of operations and financial condition could be
materially adversely affected.

If Our Technology and Phone Systems are Not Operational, Our Operations Could be
Disrupted and Our Ability to Successfully Acquire Receivable Portfolios Could be
Adversely Affected.

Our success depends in part on sophisticated telecommunications and computer
systems. The temporary loss of our computer and telecommunications systems,
through casualty, operating malfunction or service provider failure, could
disrupt our operations. In addition, we must record and process significant
amounts of data quickly and accurately to properly bid on prospective
acquisitions of receivable portfolios and to access, maintain and expand the
databases we use for our collection or monitoring activities. Any failure of our
information systems and their backup systems would interrupt our operations. We
may not have adequate backup arrangements for all of our operations and we may
incur significant losses if an outage occurs. Any interruption in our operations
could have an adverse effect on our results of operations and financial
condition.

Our Quarterly Operating Results May Fluctuate and Cause Our Stock Price to
Decline.

Because of the nature of our business, our quarterly operating results may
fluctuate, which may adversely affect the market price of our common stock. Our
results may fluctuate as a result of any of the following:

o the timing and amount of collections on our receivable
portfolios;

o our inability to identify and acquire additional receivable
portfolios;

o a decline in the estimated value of our receivable portfolio
recoveries;

o increases in operating expenses associated with the growth of
our operations; and

o general and economic market conditions.

Because Several Existing Stockholders Own a Large Percentage of Our Voting
Stock, Other Stockholders' Effective Voting Power may be Limited.

As of February 3, 2004, three stockholders (the former holders of all of the
capital stock of STB) beneficially own or control approximately 80% of our
shares. If some or all of such persons act together, they can have the ability
to control matters submitted to our shareholders for approval, including the
election and removal of directors and the approval of any merger, consolidation
or sale of all or substantially all of our assets. This potential concentration
of control can affect the value of our securities.

We Have Not Paid Any Dividends on Our Common Stock

We have not paid any cash dividends on our Common Stock in the past and do not
intend to pay any dividends on our Common Stock in the foreseeable future. Our
board of directors is empowered to declare dividends, if any, to holders of the
Common Stock, based on our earnings, capital requirements, financial condition,
and other relevant factors. We anticipate that we will reinvest the profits from
our operations, if any, into our business. There is no assurance that we will
ever pay dividends to holders of our common stock.

Our Organizational Documents and Delaware Law May Make it Harder for Us to be
Acquired Without the Consent and Cooperation of Our Board of Directors and
Management.

Several provisions of our organizational documents and Delaware law may deter or
prevent a takeover attempt, including a takeover attempt in which the potential
purchaser offers to pay a per share price greater than the current market price
of our common stock. Under the terms of our certificate of incorporation, our
board of directors has the authority, without further action by the
stockholders, to issue shares of preferred stock in one or more series and to

fix the rights, preferences, privileges and restrictions thereof. The ability to
issue shares of preferred stock could tend to discourage takeover or acquisition
proposals not supported by our current board of directors. In addition, we are
subject to Section 203 of the Delaware General Corporation Law, which restricts
business combinations with some stockholders once the stockholder acquires 15%
or more of our common stock.

ITEM 7 - FINANCIAL STATEMENTS, PROFORMA INFORMATION AND EXHIBITS

(a) Financial Statements of Businesses Acquired (filed herewith)
(J. Holder, Inc, VOM, LLC and Velocity Investments, L.L.C. as
of 6/30/03, 12/31/02 and 12/31/01 and for the six months ended
6/30/03 and the years ended 12/31/02 and 12/31/01)

(1) Independent Auditors' Report
(2) Combined Statements of Financial Condition
(3) Combined Statements of Operations
(4) Combined Statements of Changes in Shareholders' and
Members' Deficits
(5) Combined Statements of Cash Flows
(6) Notes to Combined Financial Statements

(b) Pro Forma Financial Information (filed herewith)
(Tele-Optics, Inc. and STB, Inc. as of 9/30/03 and for the
nine months ended 9/30/03 and the year ended 12/31/02)

(1) Pro Forma Combined Balance Sheets
(2) Pro Forma Combined Statements of Operations

Listed below are all exhibits to this Current Report on Form 8-K.

Exhibit
Number Description
- ------ -----------

2.1 Agreement and Plan of Merger, dated as of February 3, 2004, by
and among Tele-Optics, Inc., TLOP Acquisition Company, L.L.C.,
STB, Inc., John C. Kleinert, W. Peter Ragan, Sr. and W. Peter
Ragan, Jr. (omitting all schedules and exhibits).* **

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

* The Registrant will furnish all omitted and schedules and exhibits to the
Agreement and Plan of Merger, upon request of the Securities and Exchange
Commission.

** Incorporated by reference to the statement of beneficial ownership of our
Common Stock on Schedule 13D filed on behalf of a group of stockholders
including John C. Kleinert, W. Peter Ragan, Sr. and W. Peter Ragan, Jr.
(SEC File No. [005-40636]) filed on February 17, 2004.

SIGNATURES

Pursuant to the requirements 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.

TELE-OPTICS, INC.

/s/ JOHN C. KLEINERT
-----------------------------------------
John C. Kleinert
Chief Executive Officer

Dated: February 18, 2004

Exhibit Index

(b) Pro Forma Financial Information (filed herewith)
(Tele-Optics, Inc. and STB, Inc. as of 9/30/03 and for the
nine months ended 9/30/03 and the year ended 12/31/02)

(1) Pro Forma Combined Balance Sheets
(2) Pro Forma Combined Statements of Operations

(c) Exhibit No. 2.1 Agreement and Plan of Merger, dated as of
February 3, 2004, by and among Tele-Optics, Inc., TLOP
Acquisition Company, L.L.C., STB, Inc., John C. Kleinert, W.
Peter Ragan, Sr. and W. Peter Ragan, Jr. (omitting all
schedules and exhibits).* **

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

* The Registrant will furnish all omitted and schedules and exhibits to the
Agreement and Plan of Merger, upon request of the Securities and Exchange
Commission.

7(a)
J. HOLDER, INC., VOM, LLC AND
-----------------------------
VELOCITY INVESTMENTS, LLC
-------------------------

COMBINED FINANCIAL STATEMENTS
-----------------------------

SIX MONTHS ENDED JUNE 30, 2003
------------------------------
AND YEARS ENDED
---------------
DECEMBER 31, 2002 AND 2001
--------------------------

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

TABLE OF CONTENTS
-----------------

Page
----

Independent Auditors' Report 2

Combined Statements of Financial Condition 3

Combined Statements of Operations 4

Combined Statements of Changes in Shareholder's and Members' Deficits 5

Consolidated Statements of Cash Flows 6

Notes to Consolidated Financial Statements 7-12

INDEPENDENT AUDITORS' REPORT

To the Boards of Directors
J. Holder, Inc., VOM, LLC and Velocity Investments, LLC

We have audited the accompanying combined statements of financial condition of
J. Holder, Inc., VOM, LLC and Velocity Investments, LLC as of June 30, 2003 and
J. Holder, Inc. and VOM, LLC as of December 31, 2002 and the statement of
financial condition of J. Holder, Inc. as of December 31, 2001, and the related
combined statements of operations, combined changes in shareholder's and
members' deficit, and combined cash flows for J. Holder, Inc., VOM, LLC and
Velocity Investments, LLC for the six months ended June 30, 2003 and for J.
Holder, Inc. and VOM, LLC for the year ended December 31, 2002 and the statement
of operations, changes in shareholder's deficit, and cash flows for J. Holder,
Inc. for the year ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 audits provide 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 J. Holder, Inc, VOM, LLC and
Velocity Investments, LLC. as of June 30, 2003 and J. Holder, Inc. and VOM, LLC
as of December 31, 2002 and J. Holder, Inc. as of December 31, 2001, and the
results of operations and cash flows for J. Holder, Inc., VOM, LLC, and Velocity
Investments, LLC for the six months ended June 30, 2003 and J. Holder, Inc. and
VOM, LLC for the year ended December 31, 2002 and J. Holder, Inc. for the year
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.

/s/ SPICER, JEFFRIES & CO.

Denver, Colorado
July 11, 2003

J. HOLDER, INC., VOM, LLC, AND VELOCITY INVESTMENTS, LLC

COMBINED STATEMENTS OF FINANCIAL CONDITION
------------------------------------------

December 31,
June 30, 2003 December 31, 2002 2001
-------------------------------------------------- ------------------------------------- -----------
Velocity
J. Holder, Investments, J. Holder, J. Holder,
ASSETS Inc. VOM, LLC LLC Combined Inc. VOM, LLC Combined Inc.
------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Cash and
cash equivalents $ 846 $ 87,769 $ 33,078 $ 121,693 $ 1,074 $ 34,868 $ 35,942 $ 598
Cash in trust
(Note 4) 602,646 -- -- 602,646 346,487 -- 346,487 53,222
Real property
held for sale,
at cost (Note 2) 1,027,072 -- -- 1,027,072 1,581,152 -- 1,581,152 1,602,335
Property deposits 45,000 -- -- 45,000 25,000 -- 25,000 197,500
Municipal tax liens
(Note 2) -- 1,607,212 -- 1,607,212 -- 1,934,035 1,934,035 --
Finance
receivables,
at cost (Note 3) -- -- 449,665 449,665 -- -- -- --
Related party
receivables -- -- 22,797 22,797 -- -- -- --
Other investment 20,000 -- -- 20,000 20,000 -- 20,000 20,000
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

TOTAL ASSETS $ 1,695,564 $ 1,694,981 $ 505,540 $ 3,896,085 $ 1,973,713 $ 1,968,903 $ 3,942,616 $ 1,873,655
=========== =========== =========== =========== =========== =========== =========== ===========

LIABILITIES AND
SHAREHOLDER'S/
MEMBERS' DEFICIT
- ----------------

LIABILITIES:
Accrued expenses $ 61,588 $ 30,000 $ 11,877 $ 103,465 $ 82,145 $ -- $ 82,145 $ 65,839

LINE OF CREDIT -
RELATED
PARTY (Note 4) 1,707,200 -- -- 1,707,200 1,982,219 -- 1,982,219 1,870,220

NOTES PAYABLE -
RELATED
PARTY (Note 5) -- 1,719,000 499,020 2,218,020 -- 2,000,000 2,000,000 --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
1,768,788 1,749,000 510,897 4,028,685 2,064,364 2,000,000 4,064,364 1,936,059
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

CONTINGENCIES (Note 8)

SHAREHOLDERS' DEFICIT
(Note 6):
Common stock, $1.00
par value, 100 shares
authorized, 33, 100
and 100 shares issued
and outstanding,
respectively 33 -- -- 33 100 -- 100 100
Additional paid-in
capital 967 -- -- 967 900 -- 900 900
Deficit (74,224) -- -- (74,224) (91,651) -- (91,651) (63,404)

MEMBERS' DEFICIT -- (54,019) (5,357) (59,376) -- (31,097) (31,097) --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Total deficit (73,224) (54,019) (5,357) (132,600) (90,651) (31,097) (121,748) (62,404)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDER'S/
MEMBERS' DEFICIT $ 1,695,564 $ 1,694,981 $ 505,540 $ 3,896,085 $ 1,973,713 $ 1,968,903 $ 3,942,616 $ 1,873,655
=========== =========== =========== =========== =========== =========== =========== ===========

The accompanying notes are an integral part of these statements.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

COMBINED STATEMENTS OF OPERATIONS
---------------------------------

Year ended
Six months ended Year ended December 31,
June 30, 2003 December 31, 2002 2001
------------------------------------------------- ------------------------------------- -----------
Velocity
J. Holder, Investments, J. Holder, J. Holder,
Inc. VOM, LLC LLC Combined Inc. VOM, LLC Combined Inc.
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

REVENUE:
Sale of real property $ 1,639,256 $ -- $ -- $ 1,639,256 $ 3,862,993 $ -- $ 3,862,993 $ 4,691,560
Interest and fee income -- 171,036 62,505 233,541 -- 177,775 177,775 --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Total revenue 1,639,256 171,036 62,505 1,872,797 3,862,993 177,775 4,040,768 4,691,560
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

EXPENSES:
Cost of real property 1,284,606 -- -- 1,284,606 2,978,618 -- 2,978,618 3,443,515
Sales commissions 169,719 -- -- 169,719 424,916 -- 424,916 562,203
Consulting fees 39,731 -- -- 39,731 132,982 -- 132,982 199,445
Professional fees 47,697 65,993 27,150 140,840 154,059 107,381 261,440 239,702
Collection costs -- -- 28,835 28,835 -- -- -- --
Lien searches -- 26,238 -- 26,238 -- -- -- --
General and
administrative 1,765 2,477 -- 4,242 35,874 4,257 40,131 51,258
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Total operating
expenses 1,543,518 94,708 55,985 1,694,211 3,726,449 111,638 3,838,087 4,496,123
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Income from
operations 95,738 76,328 6,520 178,586 136,544 66,137 202,681 195,437
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

OTHER EXPENSE -
Interest expense 78,311 98,250 11,877 188,438 164,791 100,234 265,025 190,751
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

NET INCOME (LOSS) $ 17,427 $ (21,922) $ (5,357) $ (9,852) $ (28,247) $ (34,097) $ (62,344) $ 4,686
=========== =========== =========== =========== =========== =========== =========== ===========

The accompanying notes are an integral part of these statements.

J HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

COMBINED STATEMENTS OF CHANGES IN SHAREHOLDER'S AND MEMBERS' DEFICITS
---------------------------------------------------------------------

J. HOLDER, INC.
---------------------------------------------------
Velocity
Investments,
Common Additional VOM, LLC LLC Combined
Common Stock Paid-In Retained Members' Members' Members'
Shares Amount Capital Deficit Deficit Deficit Deficit
---------- ---------- ---------- ---------- ---------- ---------- ----------

BALANCES, December 31, 2000 100 $ 100 $ 900 $ (68,090) $ -- $ -- $ --

Net income -- -- -- 4,686 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------

BALANCES, December 31, 2001 100 100 900 (63,404) -- -- --

Member contribution -- -- -- -- 3,000 -- 3,000

Net loss -- -- -- (28,247) (34,097) -- (34,097)
---------- ---------- ---------- ---------- ---------- ---------- ----------

BALANCES, December 31, 2002 100 100 900 (91,651) (31,097) -- (31,097)

Shares cancelled (67) (67) 67 -- -- -- --

Member withdrawal -- -- -- -- (1,000) -- (1,000)

Net income (loss) -- -- -- 17,427 (21,922) (5,357) (27,279)
---------- ---------- ---------- ---------- ---------- ---------- ----------

BALANCES, June 30, 2003 33 $ 33 $ 967 $ (74,224) $ (54,019) $ (5,357) $ (59,376)
========== ========== ========== ========== ========== ========== ==========

The accompanying notes are an integral part of these statements.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

COMBINED STATEMENTS OF CASH FLOWS
---------------------------------

CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 17,427 $ (21,922) $ (5,357) $ (9,852) $ (28,247) $ (34,097) $ (62,344) $ 4,686
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Decrease (increase)
in real property
held for sale (256,159) -- -- (256,159) (293,265) -- (293,265) (560,210)
Decrease (increase)
in municipal
tax leans -- 326,823 -- 326,823 -- (1,934,035) (1,934,035) --
Decrease (increase)
in finance
receivables -- -- (449,665) (449,665) -- -- -- --
Decrease (increase)
in cash in trust 554,080 -- -- 554,080 21,183 -- 21,183 74,560
Decrease (increase)
in property deposits (20,000) -- -- (20,000) 172,500 -- 172,500 (110,000)
Decrease (increase)
in receivable from
related parties -- -- (22,797) (22,797) -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease)
in accounts payable
and accrued expenses (20,557) 30,000 11,877 21,320 16,306 -- 16,306 (10,890)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Net cash provided
by (used in)
operating
activities 274,791 334,901 (465,942) 143,750 (111,523) (1,968,132) (2,079,655) (601,854)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

CASH FLOWS FROM
INVESTING ACTIVITIES:

Purchase of other asset -- -- -- -- -- -- -- (20,000)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

CASH FLOWS FROM
FINANCING ACTIVITIES:
Advances on line of
credit from related
party 828,394 -- -- 828,394 2,807,836 -- 2,807,836 3,423,925
Payments on line of
credit to related
party (1,103,413) -- -- (1,103,413) (2,695,837) -- (2,695,837) (2,801,517)
Note payable proceeds
from related party -- -- 499,020 499,020 -- 2,000,000 2,000,000 --
Note payable payments
to related party -- (281,000) -- (281,000) -- -- -- --
Capital contributed -- -- -- -- -- 3,000 3,000 --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Capital withdrawal -- (1,000) -- (1,000) -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Net cash
provided by
(used in)
financing
activities (275,019) (282,000) 499,020 (57,999) 111,999 2,003,000 2,114,999 622,408
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

NET INCREASE (DECREASE)
IN CASH (228) 52,901 33,078 85,751 476 34,868 35,344 554

CASH, beginning of period 1,074 34,868 -- 35,942 598 -- 598 44
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

CASH, end of period $ 846 $ 87,769 $ 33,078 $ 121,693 $ 1,074 $ 34,868 $ 35,942 $ 598
=========== =========== =========== =========== =========== =========== =========== ===========

SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION

Interest paid -
related party line
of credit $ 88,868 -- $ -- $ 88,868 $ 153,148 $ -- $ 153,148 $ 198,455
=========== =========== =========== =========== =========== =========== =========== ===========

Interest paid -
related party notes
payable $ -- $ 98,250 $ -- $ 98,250 $ -- $ 100,234 $ 100,234 $ --
=========== =========== =========== =========== =========== =========== =========== ===========

The accompanying notes are an integral part of these statements.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------

NOTE 1 - ORGANIZATION, OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business
- -------------------------

The accompanying combined financial statements include all of the assets and
liabilities of J. Holder, Inc. ("Holder), as of June 30, 2003 and December 31,
2002 and 2001 and results of operations for the six months ended June 30, 2003
and the years ended December 31, 2002 and 2003; the assets and liabilities of
VOM, LLC ("VOM") as of June 30, 2003 and December 31, 2002 and the results of
operations for the six months ended June 30, 2003 and the period from inception
(July 15, 2002) to December 31, 2002; and Velocity Investments, LLC ("Velocity")
assets and liabilities as of June 30, 2003 and results of operations for the six
months ended June 30, 2003.

Holder was incorporated in New Jersey on June 29, 1998. Holder invests in real
property that is acquired via sheriff's foreclosure sales and judgment execution
sales and purchase of defaulted mortgages, partial interests in real property
and real property with title defects. These investments are made at a discount
to fair market value with the focus on acquiring the property for resale or to
perfect the partial interest and/or defective title for resale. Holder operates
throughout the State of New Jersey. The length of time it takes Holder to resell
investments in real property varies but typically takes less than one year.

VOM is a New Jersey Limited Liability Company formed on July 15, 2002. The
Company invests in New Jersey municipal tax lien portfolios.

Velocity was formed in New Jersey on September 22, 2002 and is in the business
of purchasing distressed credit card portfolios at a discount from the face
amount and collecting such portfolios on a loan-by-loan basis. The Company began
its planned operations in January, 2003. The Company's ability to collect the
individual loans in the credit card portfolios is influenced by the quality of
each receivable as well as economic conditions. Generally, the higher the
discount on the loans, the greater risk of loss.

Principals of Combination
- -------------------------

The combined financial statements include the accounts of Holder, VOM and
Velocity, which are under common ownership and management. There were no
intercompany accounts or transactions.

Cash Equivalents
- ----------------

All highly liquid investments purchased with an original maturity of three
months or less are considered to be cash equivalents.

Investments and Revenue Recognition
- -----------------------------------

Investments in real property purchased by Holder for resale are carried at the
lower of cost or market value. This includes the cost to purchase the property
and repairs or other costs required to get the property ready for resale. Holder
recognizes income and related expenses from the sale of real property
investments at the date the sale closes.

VOM records its investments in New Jersey municipal tax liens at cost plus
accrued interest. Interest revenue is recognized on the accrual basis of
accounting, based on the face value of the tax certificates at the stated rate
of 18% per annum. The initial portfolios of liens were purchased at a 2%
discount. As required by Accounting Principals Board, Opinion No. 21, "Interest
on Receivables and Payables," the discount is recognized over the estimated life
of the liens using the interest method.

Velocity purchases distressed credit card portfolios at a substantial discount.
Therefore, no interest is accrued and discount is not accreted as these loans
are distressed and collection is not assured. Accordingly, interest and discount
accretion is accounted for on the cash-basis, using the cost-recovery method for
partial collections.

Allowance for Credit Card Portfolio Losses
- ------------------------------------------

Provisions for credit losses are charged to income in amounts sufficient to
maintain the allowance at a level considered adequate to cover the losses of
principle, net of discount, in the existing portfolio. The Company's charge-off
policy is to charge-off the principle balance of loans when all collection
efforts have been exhausted.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
(Continued)

NOTE 1 - ORGANIZATION, OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
(continued)

Income Taxes
- ------------

Holder accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.

The financial statements do not include provisions for income tax for VOM and
Velocity because they are not taxable entities and their members are taxed on
their respective share of Company earnings.

Use of Estimates
- ----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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. Management believes that the estimates utilized in the
preparation of the combined financial statements are prudent and reasonable.
Actual results could differ from these estimates.

Fair Value of Financial Instruments
- -----------------------------------

Substantially all of the combined Companies' assets and liabilities are carried
at fair value or contracted amounts that approximate fair value except the
investments in real property, carried at the lower of cost or market value, and
the investments in finance receivables, which are carried at cost. Estimates of
fair value are made at a specific point in time, based on relative market
information and information about the financial instrument, specifically, the
value of the underlying financial instrument. Assets that are recorded at fair
value consist largely of property deposits, receivables and other assets, which
are carried at contracted amounts that approximate fair value. Similarly, the
combined Companies' liabilities consist of short term liabilities recorded at
contracted amounts that approximate fair value.

Recent Accounting Pronouncements
- --------------------------------

On March 31, 2002, the Company adopted SFAS 142, "Goodwill and Other Intangible
Assets", which requires the discontinuance of goodwill amortization and that it
be assessed for impairment on an annual basis or more frequently if impairment
indicators exist. The adoption of SFAS 142 did not have any effect on the
combined Companies' financial position, results of operations or cash flows as
the Companies have no recorded goodwill.

On March 31, 2002, the Company adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," ("SFAS 144"). SFAS 144 supercedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of," and
elements of APB 30, "Reporting the Results of Operations--Reporting the Effects
on Disposal of a Segment of a Business and Extraordinary, Unusual or
Infrequently Occurring Events and Transactions." SFAS 144 establishes a
single-accounting model for long-lived assets to be disposed of while
maintaining many of the provisions relating to impairment testing and valuation.
The adoption did not affect the combined Companies' financial position or
results of operations.

In April 2002, Statement of Financial Accounting Standards No. 145, "Rescission
of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections," was issued. This statement provides guidance on the
classification of gains and losses from the extinguishment of debt and on the
accounting for certain specified lease transactions. The adoption of this
statement did not impact the combined Companyies' financial position, results of
operations or cash flows.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
(Continued)

NOTE 1 - ORGANIZATION, OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
(continued)

In June 2002, Statement of Financial Accounting Standards No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities," ("SFAS 146") was issued.
This statement provides guidance on the recognition and measurement of
liabilities associated with disposal activities and is effective as of January
1, 2003. Under SFAS 146, companies will record the fair value of exit or
disposal costs when they are incurred rather than at the date of a commitment to
an exit or disposal plan. The adoption of SFAS 146 did not impact the combined
Companies' financial position, results of operations or cash flows.

In November 2002, the Financial Accounting Standards Board issued Interpretation
No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Guarantees of Indebtedness of Others," ("FIN 45"). FIN 45 requires the
Company to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in the issuance of the guarantee. FIN 45 is
effective for guarantees issued or modified after December 31, 2002. The
disclosure requirements effective for the year ending March 31, 2003 expand the
disclosures required by a guarantor about its obligations under a guarantee. The
adoption of the disclosure requirements of this statement did not impact the
combined Companies' financial position, results of operations or cash flows.

In December 2002, Statement of Financial Accounting Standards No. 148,
"Accounting for Stock-Based Compensation -Transition and Disclosure," ("SFAS
148") was issued. SFAS 148 amends Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation," ("SFAS 123") to provide
alternative methods of transition for a voluntary change to the fair value
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on the reported results. The provisions of SFAS 148 are effective for
financial statements for fiscal years ending after December 15, 2002 and interim
periods beginning after December 15, 2002. The adoption of the disclosure
requirements of this statement did not impact the combined Companies' financial
position, results of operations or cash flows.

In December 2002, the Emerging Issues Task Force issued a consensus on Issue No.
00-21, "Revenue Arrangements with Multiple Deliverables" (EITF 00-21). EITF
00-21 mandates how to identify whether goods or services or both that are to be
delivered separately in a bundled sales arrangement should be accounted for as
separate units of accounting.

In January 2003, the Financial Accounting Standards Board issued Interpretation
No. 46, "Consolidation of Variable Interest Entities," ("FIN 46"). The
interpretation provides guidance for determining when a primary beneficiary
should consolidate a variable interest entity, or equivalent structure, that
functions to support the activities of the primary beneficiary. The
interpretation is effective as of the beginning of the first interim or annual
reporting period beginning after June 15, 2003 for variable interest entities
created before February 1, 2003. The adoption of this statement is not expected
to impact the combined Companies' financial position, results of operations or
cash flows.

In May 2003, Statement of Financial Accounting Standards No. 150, "Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity" ("SFAS 150") was issued. SFAS 150 establishes standards for how an
issuer classifies and measures in its statement of financial position certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). This provisions of SFAS 150
are effective for financial instruments entered into or modified after May 31,
2003, and otherwise shall be effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of this statement is not
expected to impact the combined Companies' financial position, results of
operations or cash flows.

NOTE 2 - INVESTMENTS

Investments in Real Property
- ----------------------------

As discussed in note 1, Investments in real property are made at a discount to
fair market value with the focus on acquiring the property for resale or to
perfect the partial interest and/or clouded title for resale. Purchases of
property are funded by a line of credit from a shareholder, see note 2.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
(Continued)

NOTE 2 - INVESTMENTS (continued)

Investments in Municipal Tax Liens
- ----------------------------------

Investments in New Jersey municipal tax liens consists of the following:

December 31, June 30,
2002 2003
----------- -----------
Tax lien certificates $ 1,830,667 $ 1,411,385
Discount on purchase (29,790) (22,160)
Accrued interest 133,158 217,987
----------- -----------

$ 1,934,035 $ 1,607,212
=========== ===========

Interest accrues at 18% per annum based on the lien balance

NOTE 3 - FINANCE RECEIVABLES

Finance receivables consists of the following:

Credit card portfolios $ 3,733,984
Discount on portfolios (3,284,319)
-----------

$ 449,665
===========

Velocity does not accrue interest income and discount amortization on accounts
due to the irregularity of collections and no assurance of collections. All
loans are distressed and past due.

During the period ended June 30, 2003, cash collections of principal amounts of
credit card portfolio contracts, including unearned discounts, totaled
approximately $108,000. No credit card contracts have been charged-off as of
June 30, 2003. Future charge-offs are considered by management to be adequately
provided for by the amount of discount on loans.

NOTE 4 - LINE OF CREDIT

Holder has a $2,000,000 line of credit with a shareholder which expires May
2004, for the purpose of financing Holder's investments in real property.
Interest of 10% per annum is due upon sale of the real property, based on the
number of days the funds are committed to the investment. Each investment is
presented on a case-by-case basis for funding approval and, if approved, the
asset purchased is assigned as collateral to the shareholder for the funds
advanced until the property is sold. Funds advanced are held and disbursed from
an attorney trust account. At June 30, 2003 and December 31, 2002 and 2001,
there was $292,800, $17,781 and $129,780, respectively, available under this
line of credit. Interest expense, including accrued interest, for the six months
ended June 30, 2003 and the years ended December 31, 2002 and 2001 was $78,311,
$164,791 and $190,751, respectively.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS
(Continued)

NOTE 5- NOTES PAYABLE

Notes payable consist of the following:

June 30, December 31,
2003 2002
----------- -----------

Notes payable to member of VOM and a related trust,
interest at 10% per annum, secured by tax lien
certificates and all other assets of the company.
Principal and interest payable quarterly or, if not
quarterly, at such time as the Company's cash flow
allows. Due July 17, 2004. $ 1,719,000 $ 2,000,000

Note payable to member of Velocity, interest at 8%
per annum, unsecured. All notes originated during
period from January - May of 2003 and are each due
in five years. Principal and interest due on the
anniversary of each note except for the first year,
which payment shall be optional and otherwise added
to second year payment. 499,020 --
----------- -----------

$ 2,218,020 $ 2,000,000
=========== ===========

During the six months ended June 30, 2003 and the period from inception (July
15, 2002) to December 31, 2002, VOM paid interest of $98,250 and $100,234,
respectively. Principal payments of $281,000 were made by VOM to the member
during the six months ended June 30, 2003.

Maturities of notes payable are as follows:

2004 $ 1,719,000
2005 199,608
2006 99,804
2007 99,804
2008 99,804
-----------
$ 2,218,020
===========

NOTE 6- SHAREHOLDER'S DEFICIT AND RELATED PARTY TRANSACTIONS

The authorized capital of Holder consists of 100 shares of $1.00 par common
stock. In 1998, the Company issued 100 shares of common stock to its three
founders. On June 13, 2003, 67 of the shares were assigned back to the Company,
resulting in 100% ownership by one shareholder.

Interest payments on the line of credit, Note 4, were made to a director and
shareholder of Holder in the amount of $65,920, $129,167 and $198,455, for the
six months ended June 30, 2003 and the years ended December 31, 2002 and 2001,
respectively. In addition, Holder paid the member and shareholder consulting
fees of $29,910, $114,910 and $199,445, for the six months ended June 30, 2003
and the years ended December 31, 2002 and 2001, respectively

Holder paid legal consulting fees to an entity related to a director and prior
shareholder in the amount of $47,697, $154,059 and $239,702 for the six months
ended June 30, 2003 and the years ended December 31, 2002 and 2001,
respectively. This related entity provided office space and administrative
support to the Company at no cost. An entity related to another director and
prior shareholder received combined realtor commissions at closing and
additional sales commissions in the amount of $133,532, $343,192 and $477,538,
for the six months ended June 30, 2003 and the years ended December 31, 2002 and
2001, respectively,

VOM paid legal research fees to an entity related to a member of $35,000 and
$50,000 for the six months ended June 30, 2003 and the period from inception
(July 15, 2002) to December 31, 2002. At June 30, 2003, $30,000 in legal fees
was due this entity.

At June 30, 2003, Velocity had a receivable from a related party in the amount
of $22,797.

J. HOLDER, INC., VOM, LLC AND VELOCITY INVESTMENTS, LLC

NOTES TO COMBINED FINANCIAL STATEMENTS
--------------------------------------
(Continued)

NOTE 7- INCOME TAXES

At December 31, 2002, Holder had an unused net operating loss carryforward of
approximately $500 for income tax purposes, which expires through 2022. This net
operating loss carryforward may result in minimal future income tax benefit. The
difference between tax loss carryforwards and book operating losses is due to
the fact that the Company files its tax returns on a cash basis.

NOTE 8 - CONCENTRATIONS OF CREDIT RISK

Holder has deposits in a bank trust account in excess of the FDIC insured amount
of $100,000. The amount in excess of $100,000 is subject to loss should the bank
cease operations.

7(b)

TELE-OPTICS, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA AND UNAUDITED PRO FORMA
COMBINED FINANCIAL DATA

The Selected Financial Data and the Unaudited Pro Forma Financial Data is
provided to aid you in your analysis of the financial aspects of the merger and
is presented in summary only. This Data should be read in conjunction with, and
is qualified in its entirety by, the respective historical financial statements
and notes thereto, if applicable, of Tele-Optics, Inc. and STB, Inc.
incorporated by reference into the Information Statement and the financial
statements and notes thereto in Tele-Optics, Inc.'s Form 10QSB dated November
10, 2003.

STB, INC. SELECTED FINANCIAL DATA

Six Months Years Ended December 31,
Ended --------------------------
June 30, 2003 2002 2001
----------- ----------- -----------

OPERATION STATEMENT DATA:

Revenues ............................. $ 1,872,797 $ 3,862,993 $ 4,691,560
Net income (loss) .................... (9,852) (62,344) 4,686

BALANCE SHEET DATA:
Real estate held for sale, at cost ... 1,027,072 1,581,152 1,602,335
Municipal tax liens .................. 1,607,212 1,934,035 --
Total assets ......................... 3,896,085 3,942,616 1,873,655
Line of credit - related party ....... 1,707,200 1,982,219 1,870,220
Notes payable - related party ........ 2,218,020 2,000,000 --
Total liabilities .................... 4,028,685 4,064,364 1,936,059
Members' deficit ..................... (132,600) (121,748) (62,404)

TELE-OPTICS, INC.
SUMMARY HISTORICAL FINANCIAL DATA AND SUMMARY
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

STB, Inc. Tele-Optics, Inc. Tele-Optics, Inc.
Historical Pro Forma Pro Forma Nine
Year Ended Year Ended Months Ended
December 31, December 31, September 30,
2002 2002 2003
------------ ------------ ------------

OPERATING DATA:
Total revenues ......................... $ 4,040,768 $ 4,040,768 $ 2,606,536
============ ============ ============

Net income (loss) ...................... $ (62,344) $ (73,817) $ (2,247)
============ ============ ============

Net income (loss) per weighted
average common stock outstanding ..... $ (623.44) $ (0.01) $ (0.00)
============ ============ ============
Weighted average Common Stock
outstanding .......................... 100 9,076,712 13,005,000
============ ============ ============

BALANCE SHEET DATA (at end of period):

Real estate held for sale, at cost ..... 1,581,152 1,581,152 948,246
Municipal tax liens .................... 1,934,035 1,934,035 1,450,729
Total assets ........................... 3,942,616 3,942,705 3,748,229
Line of credit - related party ......... 1,982,219 1,982,219 1,507,203
Notes payable - related party .......... 2,000,000 2,000,000 2,268,020
Total liabilities ...................... 4,064,364 4,066,772 3,865,043
Members' deficit ....................... (121,748) (124,067) (116,814)

F-1

TELE-OPTICS, INC.
BASIS OF PRESENTATION OF UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
As of September 30, 2003

The Unaudited Pro Forma Combined Condensed Balance Sheet gives effect to the
merger of Tele-Optics, Inc. and STB, Inc. as a recapitalization of Tele-Optics,
Inc. with STB, Inc. as the acquirer (reverse acquisition). This event has been
presented as if it had occurred on September 30, 2003. The Unaudited Pro Forma
Combined Balance Sheet gives effect to the merger under the purchase method of
accounting in accordance with Accounting Principles Board Opinion No. 16. In the
opinion of management, all significant adjustments necessary to reflect the
effects of the merger have been made.

The Unaudited Pro Forma Combined Balance Sheet is presented for comparative
purposes only and is not necessarily indicative of what the actual combined
financial position of Tele-Optics, Inc. and STB, Inc. would have been, nor does
it purport to represent the future combined financial position of Tele-Optics,
Inc. and STB, Inc. This Unaudited Pro Forma Combined Balance Sheet should be
read in conjunction with, and is qualified in its entirety by, the respective
historical financial statements and notes thereto, if applicable, of
Tele-Optics, Inc. and STB, Inc. incorporated by reference into the Information
Statement and the financial statements and notes thereto in Tele-Optics, Inc.'s
Form 10-QSB filed November 10, 2003.

F-2

TELE-OPTICS, INC.
Proforma Combined Condensed Balance Sheet
September 30, 2003
(Unaudited)

Tele-Optics, Pro Forma Pro Forma
Inc. STB, Inc. Adjustments Amounts
----------- ----------- ------------- -----------

Cash and cash equivalents $ 2,715 $ 618,841 $ -- $ 621,556
Cash in trust -- 80,000 -- 80,000
Real property held for sale, at cost -- 948,246 948,246
Property deposits 104,700 -- 104,700
Municipal tax liens -- 1,450,729 1,450,729
Finance receivables, at cost -- 511,414 -- 511,414
Related party receivables 11,584 11,584
Other investment -- 20,000 20,000
----------- ----------- ------------- -----------

TOTAL ASSETS $ 2,715 $ 3,745,514 $ -- $ 3,748,229
=========== =========== ============= ===========

Accrued expenses $ -- $ 89,820 $ -- $ 89,820
Line of credit - related party -- 1,507,203 -- 1,507,203
Notes payable - related party -- 2,268,020 -- 2,268,020
----------- ----------- ------------- -----------
-- 3,865,043 -- 3,865,043
----------- ----------- ------------- -----------

Common stock, par value 13,005 33 86,962 (a) 100,000
Additional paid-in capital 1,781,028 967 (1,781,995)(a) --
Deficit accumulated during development stage (84,109) -- 84,109 (a) --
Accumulated deficit from operations (1,707,209) (75,508) 1,565,903 (a) (216,814)
Members' deficit -- (45,021) 45,021 (a) --
----------- ----------- ------------- -----------
Total shareholders' equity 2,715 (119,529) -- (116,814)
----------- ----------- ------------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 2,715 $ 3,745,514 $ -- $ 3,748,229
=========== =========== ============= ===========

F-3

TELE-OPTICS, INC
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2003

The Unaudited Pro Forma Combined Condensed Statement of Operations gives effect
to the Tele-Optics merger of Tele-Optics, Inc. and STB, Inc. as a
recapitalization of Tele-Optics, Inc. with STB, Inc. as the acquirer (reverse
acquisition). This event has been presented as if it had occurred at the
beginning of the nine month period ended September 30, 2003. The Unaudited Pro
Forma Combined Condensed Statement of Operations gives effect to the merger
under the purchase method of accounting in accordance with Accounting Principles
Board Opinion No. 16. In the opinion of management, all significant adjustments
necessary to reflect the effects of the merger have been made.

The Unaudited Pro Forma Combined Condensed Statement of Operations is presented
for comparative purposes only and is not necessarily indicative of what the
actual combined financial position of Tele-Optics, Inc. and STB, Inc. would have
been, nor does it purport to represent the future combined financial position of
Tele-Optics, Inc. and STB, Inc. This Unaudited Pro Forma Combined Condensed
Statement of Operations should be read in conjunction with, and is qualified in
its entirety by, the respective historical financial statements and notes
thereto, if applicable, of Tele-Optics, Inc. and STB, Inc. incorporated by
reference into the Information Statement and the financial statements and notes
thereto in Tele-Optics, Inc.'s Form 10-QSB filed November 10, 2003.

F-4

TELE-OPTICS, INC.
Proforma Condensed Statement of Operations
For the Nine Months Ended September 30, 2003
(Unaudited)

Tele-Optics, Pro Forma Pro Forma
Inc. STB, Inc. Adjustments Amounts
------------ ------------ ------------ ------------

Revenue:
Sale of real property $ -- $ 2,189,281 $ -- $ 2,189,281
Interest and fee income -- 417,255 417,255
------------ ------------ ------------ ------------
Total revenue -- 2,606,536 2,606,536

Expenses:
Cost of real property -- 1,713,812 -- 1,713,812
Sales commissions -- 223,796 -- 223,796
Consulting fees -- 50,773 -- 50,773
Professional fees -- 214,553 -- 214,553
Collection fees -- 56,497 -- 56,497
Lien searches -- 50,304 -- 50,304
General and administrative expenses 5,466 21,752 -- 27,218
------------ ------------ ------------ ------------
Total operating expenses 5,466 2,331,487 2,336,953

Net income (loss) from operations (5,466) 275,049 -- 269,583
Interest expense -- 271,830 -- 271,830
------------ ------------ ------------ ------------

============ ============ ============ ============
NET (LOSS) INCOME $ (5,466) $ 3,219 $ -- $ (2,247)
============ ============ ============ ============
Net loss per share of common
stock - basic and diluted $ .00 $ .00
============ ============
Weighted average number of
common shares outstanding 11,226,978 98,221,978
============ ============

F-5

TELE-OPTICS, INC
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2002

The Unaudited Pro Forma Combined Condensed Statement of Operations gives effect
to the merger of Tele-Optics, Inc. and STB, Inc. as a recapitalization of
Tele-Optics, Inc. with STB, Inc. as the acquirer (reverse acquisition). This
event has been presented as if it had occurred at the beginning of the year
ended December 31, 2002. The Unaudited Pro Forma Combined Condensed Statement of
Operations gives effect to the merger under the purchase method of accounting in
accordance with Accounting Principles Board Opinion No. 16. In the opinion of
management, all significant adjustments necessary to reflect the effects of the
merger have been made.

F-6

TELE-OPTICS, INC.
Proforma Condensed Statement of Operations
For the Year Ended December 31, 2002
(Unaudited)

Tele-Optics, Pro Forma Pro Forma
Inc. STB, Inc. Adjustments Amounts
------------ ------------ ------------ ------------

Revenue:
Sale of real property $ -- $ 3,862,993 $ -- $ 3,862,993
Interest and fee income -- 177,775 177,775
------------ ------------ ------------ ------------
Total revenue -- 4,040,768 4,040,768

Expenses:
Cost of real property -- 2,978,618 -- 2,978,618
Sales commissions -- 424,916 424,916
Consulting fees -- 132,982 132,982
Professional fees -- 261,440 261,440
General and administrative expenses 11,783 40,131 -- 51,914
------------ ------------ ------------ ------------
Total operating expenses 11,783 3,838,087 3,849,870

Net income (loss) from operations (11,783) 202,681 190,898
Interest expense -- (265,025) -- (265,025)
Other income 320 -- -- 320
------------ ------------ ------------ ------------

============ ============ ============ ============
NET LOSS $ (11,463) $ (62,344) $ -- $ (73,817)
============ ============ ============ ============
Net loss per share of common
stock - basic and diluted $ .00 $ .00
============ ============
Weighted average number of
common shares outstanding 9,076,712 96,071,712
============ ============

F-7

TELE-OPTICS, INC
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
September 30, 2003

(a) To record the reverse acquisition between Tele-Optics, Inc. and STB,
Inc. through issuance of 79,682,500 shares of common stock. In
connection with the merger, the Company completed a private placement
to an accredited investor of 7,312,500 shares of common stock.

F-8

TELE-OPTICS, INC
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2003

None

F-9

TELE-OPTICS, INC
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2002

None

F-10