As filed with the Securities and Exchange Commission on January 29, 2001

Registration No. 333-51748

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

NORTH AMERICAN DATACOM, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of Incorporation or Organization)

4813

(Primary Standard Industrial Classification Code Number)

84-1067694

(I.R.S. Employer Identification Number)

751 County Road 989

Building 1000

Iuka, Mississippi 38852

(662) 424-5050

(Address, Including Zip Code, and Telephone Number,

Including Area Code, of Registrant's Principal Executive Offices)

The Company Corporation

2711 Centerville Road, Suite 400

Wilmington, DE

(302) 636-5440

(Name, Address, Including Zip Code, and Telephone Number,

Including Area Code, of Agent for Service)

Copy To:

John W. Titus, Esq.

BOULT, CUMMINGS, CONNERS & BERRY, PLC

414 Union Street

Suite 1600

P.O. Box 198062

Nashville, Tennessee 37219

(615) 252-2341

Approximate date of commencement of proposed sale to the public: from time to time after the effective date of this Registration Statement as determined by market conditions and other factors.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: [X]

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

NORTH AMERICAN DATACOM, INC. Cross-Reference Sheet Showing Location in the Prospectus of Information Required by Items of Form S-1

*Not Applicable

Information contained in this prospectus is subject to completion or amendment. The selling stockholders may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there by any sale of these securities in any state in which such offer, solicitation or sale would be unlawful.

PROSPECTUS

NORTH AMERICAN DATACOM, INC.

2,302,624 Shares of Common Stock

This prospectus relates to the offer and sale of outstanding shares of our common stock by the selling stockholders identified on page 34 of this prospectus. We will not receive any proceeds from the sale of our outstanding shares of common stock by the selling stockholders. The selling stockholders may offer and sell some, all or none of the common stock under this prospectus. The selling stockholders may determine the prices at which they will sell their shares of common stock, which may be at market prices prevailing at the time of sale or some other price. In connection with such sales, the selling stockholders may use brokers or dealers who may receive compensation or commissions for such sales. The selling stockholders may also attempt to sell their shares in isolated private transactions, at negotiated prices, with institutional or other investors.

Our common stock is currently quoted on the NASD's over-the-counter Bulletin Board under the symbol "NADA". On January 24, 2001, the last reported sales price for our common stock was $1.31 per share.

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE OUR COMMON STOCK ONLY IF YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is January 31, 2001.

TABLE OF CONTENTS

We have informed the selling stockholders that the anti-manipulative rules under the Exchange Act of 1934, as amended (the "Exchange Act"), including Regulation M, may apply to their sales in the market. We have furnished the selling stockholders with a copy of these rules. We have also informed the selling stockholders that they must deliver a copy of this prospectus with any sale of their shares.

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SUMMARY

Because this is a summary, it does not contain all of the information that may be important to you as a prospective purchaser of shares of our common stock. You should read the entire prospectus carefully, including the risk factors and the consolidated financial statements and the notes to the consolidated financial statements of the company appearing elsewhere in this prospectus, before you decide to purchase any shares of common stock. As used in this prospectus the terms "we", "us" or "Company" mean North American DataCom, Inc. and its subsidiaries.

ABOUT US

We are in the business of providing communications and information technology services with an emphasis on wideband fiber optic and wireless telecommunications services that support enterprise data storage solutions. These services are intended to include Internet access services, on-line critical data storage and retrieval, and data and voice networking. Our business plan envisions offering a wideband fiber optics and wireless telecommunications network that will service primarily Tier 2 markets by supporting wideband data, voice and internet transmission. Tier 2 markets consist of those population centers that are not in the primary 100 largest areas but are uniquely located along railroad rights-of-way where fiber optic transmission facilities can be easily accessed. Our short-term focus is on providing such services to Tier 2 markets in the southeast, primarily from Atlanta to Memphis.

We plan to engage in, and are currently in the process of developing, the following lines of business:

- Enterprise Data Storage and Computing Facility - Fiber Optic and Broadband Wireless Network

We are currently engaged in the following lines of business:

- Internet Access Service Provider - Digital and Alpha Paging Services - Telecommunications Consulting Projects

CORPORATE INFORMATION AND HISTORY

We were organized in September 1998 as North American Software Associates, Limited, a Delaware corporation. Effective December 21, 1999, North American Software Associates, Limited was acquired by Pierce International, Inc., a Colorado corporation, in a share exchange transaction. In March 2000 we moved our state of incorporation to Delaware and changed our name to North American DataCom, Inc.

Our executive offices are located at 751 County Road 989, Building 1000, Iuka, Mississippi 38852. Our telephone number is (662) 424-5050. Our fax number is (662) 424-5059.

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THE OFFERING

Securities offered by the selling Stockholders 2,302,624 shares of common stock

Common stock outstanding 98,655,678 shares as of December 8, 2000(1)

Options outstanding Options for 14,484,216 shares as of December 8, 2000.

Use of proceeds We will receive no proceeds from the sale of the common stock by the selling stockholders.

Risk Factors An investment in the common stock offered hereby involves a great deal of risk. See "Risk Factors."

OTC Electronic Bulletin Board symbol. "NADA"

(1) Excludes shares issuable upon exercise of outstanding stock options. We have approximately 14,484,216 options outstanding as of December 8, 2000.

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RISK FACTORS

An investment in our common stock involves a high degree of risk, including those risks discussed below. You should carefully consider these risk factors along with all of the other information contained in this prospectus before you decide to purchase shares of our common stock. If any of these risks actually occur, our business, financial condition and operating results could be adversely affected. If that happens, the trading price of our common stock could decline and you could lose part or all of your investment. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us, or that we currently see as immaterial, may also harm our business.

RISKS ASSOCIATED WITH OUR BUSINESS AND OPERATIONS

We are a start up company, have experienced historical operating losses and received a going concern opinion from our auditors.

Substantially all of our historical revenues have been derived from providing Internet access services and digital and alpha paging services. We have no customers or revenues from our fiber optic and wireless broadband network that we are currently attempting to develop or our enterprise data storage facility that we are currently attempting to construct. Because our operating history is extremely limited, and we have not actually commenced operations on our fiber optic and wireless broadband network or our enterprise data storage facility, you may find it difficult to evaluate our business operations and prospects. We have experienced operating losses in each fiscal quarter since we were founded and will likely continue to experience such losses. As noted in our auditor's report dated September 18, 2000, our auditors have indicated that there was substantial doubt as to our ability to continue as a going concern.

We have immediate needs for substantial additional capital.

Our present operations do not provide sufficient cash flow to pay our debts as they become due. We had negative working capital of approximately $15,000,000 at September 30, 2000, and we expect we will need to obtain additional capital of approximately $150,000,000 to finance our operating and capital needs over the next twelve months. We are actively searching for sources of financing in order to fund our business operations and capital needs, but have no commitment to provide such financing as of the date of this Prospectus. See "Management's Discussion and Analysis of Financial Condition - Liquidity." If we fail to obtain additional capital our proposed operations will be substantially restricted and we may not be able to pursue our proposed business plan.

We are currently in default in paying certain material obligations.

In March 2000, we entered into an agreement with Qwest Communications to purchase 500 miles of fiber conduit from New Orleans to Mobile, Alabama and from Pensacola, Florida to Jacksonville, Florida. The total purchase price under this agreement was approximately $15,000,000. Payments totaling approximately $9,000,000 are currently due or past due under the agreement. We have not made any of the payments due under this agreement and we are not able to make the payments, but no default has been declared. Our obligations under this agreement are personally guaranteed by our president. See "Certain Relationships and Related Transactions." We have also entered into a contract with Thoroughbred Technology and Telecommunications to lay fiber conduit between Atlanta and Memphis, through Chattanooga, at a total cost of approximately $29,000,000, of which 10% was due on October 15, 2000. The Company has received a notice of default under this contract, as we have not made this payment and we are not currently able to make the payment. If we are not able to obtain financing or raise funds to satisfy these obligations, we may lose the ability to continue to lay fiber optic cable and be subject to claims for contract breach. This would impede our plans to develop and operate a fiber optic and wireless broadband network and enterprise data storage facility.

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We lease our facilities and the lessor has the right to terminate the lease.

We lease our primary facility in Iuka, Mississippi from the Mississippi Department of Economic and Community Development. This facility is critical to our proposed business plan because it already contains many of the features necessary for us to establish an enterprise data storage facility. Under our current lease agreement the lessor has the right to terminate the lease on ninety days prior written notice, regardless of whether we have defaulted under the lease. Termination of the lease by the lessor, especially after we have invested considerable time and funds in developing the facility as an enterprise data storage facility, would cause material damage to us and to our proposed business plans. See "Business - Properties".

We have certain outstanding obligations to pre-merger shareholders of Pierce International, Inc.

As part of the share exchange transaction with Pierce International, Inc. effected in December 1999, we agreed that as soon as practicable after the closing of the share exchange transaction we would offer to those persons who were shareholders of Pierce International, Inc. immediately prior to the closing, by means of a registration statement filed with the Securities and Exchange Commission, the right to purchase 0.26 of a share for each share held by such person at a price of $0.25 per share at any time prior to the expiration of one year from the effective date of the registration statement. As of the date of this prospectus, we have determined that it is not yet practicable to make such an offer, principally due to the expense of state registration of the offer. There were approximately 7,515,705 shares outstanding held by Pierce shareholders immediately prior to closing the share exchange transaction, and we would need to issue approximately 1,954,083 additional shares of our common stock in the event all options to purchase such shares were exercised. A sudden increase in the number of shares of our common stock that is outstanding may cause the price of the stock to go down and also could affect our ability to raise equity capital.

Our operating results are likely to fluctuate widely from one period to another.

We expect that our operating results for the foreseeable future are likely to fluctuate widely from quarter to quarter and from year to year. This is especially true while we are building our fiber optic and wireless broadband network. Fluctuation of results may occur due to a variety of factors including, demand for and market acceptance of our products and services, reliability of service and network availability, the ability to increase bandwidth as necessary, customer retention, capacity utilization of our enterprise data storage facility, the timing of customer needs, the timing and magnitude of capital expenditures, changes in pricing policies or practices of competitors, and changes in governmental regulations.

We will face significant competition in running our business.

Our market is intensely competitive. We may not have the resources to compete successfully in the future. Current and potential competitors include national, foreign and regional internet service providers, global, regional and local telecommunications companies and the Regional Bell Operating Companies, providers of server hosting and data storage services, and other technology services and products companies. Most of these competitors will have substantially greater resources than us. See "Description of Business - Competition."

We are entering a new market.

The market for Internet system and network management solutions has only recently begun to develop, is evolving rapidly and is characterized by an increasing number of market entrants. This market may not prove to be viable or, if it becomes viable, may not continue to grow. We currently incur costs in excess of our revenues. If we cannot attract and retain a customer base, we will not be able to increase our sales and revenues nor create economies of scale to offset our fixed and operating costs.

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We will need to be able to manage growth.

In order for us to accomplish our proposed business plan, we must experience rapid growth in building our enterprise data storage facilities and network infrastructure, expand our service offering, expand our geographical coverage, expand our customer base and increase the number of our employees. This growth is expected to place a significant strain on our financial, management, operational and other resources, including our ability to ensure customer satisfaction. This expansion will require significant time commitments from our senior management and involve the efficient management of multiple relationships with a growing number of third parties. Our ability to manage growth effectively will require us to continue to expand operating and financial procedures and controls, to upgrade operational, financial and management information systems and to attract, train, motivate and retain key employees. We will also need to be able to attract, hire and retain qualified employees in today's competitive employment market. If our executives are unable to manage growth effectively, our business could be materially adversely affected.

If our systems fail, we could face significant costs.

We must protect our network infrastructure and equipment against damage from human error, physical or electronic security breaches, power loss and other facility failures, fire, earthquake, flood, telecommunications failure, sabotage, vandalism and similar events. Despite precautions that we have taken, a natural disaster or other unanticipated problems at one of our facilities could result in interruptions in services or significant damage to customer equipment or data. Any damage to or failure of our systems or service providers could result in reductions in, or terminations of, services supplied to our customers, which could have a material adverse effect on our business.

We will depend on network interconnections supplied by third parties.

We will rely, in part, on a number of public and private network interconnections to allow our customers to connect to other networks. If the networks with which we interconnect were to discontinue their interconnections, our ability to exchange traffic would be significantly constrained. Furthermore, our business could be harmed if these networks do not add more bandwidth to accommodate increased traffic. Some of these networks will likely require the payment of fees for the right to maintain interconnections. There usually is nothing to prevent any networks from increasing fees or denying access. In such cases, our ability to pursue the proposed business plan could be materially adversely affected.

A portion of our business may be subject to international risks.

We are pursuing international business opportunities, especially with respect to the Country of Turkey. Risks inherent in international operations include unexpected changes in regulatory requirements, export restrictions, tariffs and other trade barriers; challenges in staffing and managing foreign operations; differences in technology standards; employment laws and practices in foreign countries; longer payment cycles and problems in collecting accounts receivable; political instability; changes in currency exchange rates and imposition of currency exchange controls and potentially adverse tax consequences.

Our business is likely to become dependant upon one or a few major customers.

Upon completion and commencement of operations of our planned fiber optic and wireless broadband network and enterprise data storage facility, we will likely experience periods during which we will be highly dependent on one or a limited number of customers. Being dependent on a single or a few customers will make it difficult to satisfactorily negotiate attractive prices for our services and will expose us to the risk of substantial losses if a single dominant customer stops conducting business with us.

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RISKS RELATED TO LEGAL REQUIREMENTS

We will have to comply with telecommunications regulations.

Most of our proposed business services and products are subject to regulation at the federal and state levels. These regulations are in some cases uncertain and are often undergoing change. If we fail to comply with these regulations our business could be materially adversely effected. See "Description of Business - Government Regulation."

We will have to comply with environmental regulations.

Our intended operations, especially the construction and operation of a fiber optic network, are subject to various federal, state and local laws and regulations relating to the protection of the environment. These environmental laws and regulations, which have become increasingly stringent, are implemented principally by the Environmental Protection Agency and comparable state agencies, and govern the management of hazardous wastes, the discharge of pollutants into the air and into surface and underground waters, and the manufacture and disposal of certain substances. There are no material environmental claims currently pending or, to our knowledge, threatened against us. In addition, we believe that our operations are in material compliance with current laws and regulations. We estimate that any expenses incurred in maintaining compliance with current laws and regulations will not have a material effect on our earnings or capital expenditures. However, current regulatory requirements may change, currently unforeseen environmental incidents may occur, or past non-compliance with environmental laws may be discovered on our properties.

RISKS RELATED TO THE OFFERING

We may issue additional shares of common stock or preferred stock without shareholder approval and may agree to register the resale of additional shares of common stock.

Our Certificates of Incorporation authorizes the issuance of up to 150,000,000 shares of common stock and up to 10,000,000 shares of preferred stock with such rights and preferences as our board of directors may determine from time to time. Our board of directors may authorize us to issue additional shares of common stock or one or more series of preferred stock without shareholder approval. The existence or terms of these securities may adversely affect the rights of holders of the common stock. In addition, we may grant rights to other current or future holders of common stock to have their shares of common stock registered for resale under the Securities Act of 1933. A decision by any such shareholder to publicly sell a significant number of shares of the common stock will have the potential to cause a material decrease in the trading price of the common stock and may impair our future ability to raise capital at prices or on terms favorable to us.

The market price of our common stock is extremely volatile.

Trading volume and prices for our common stock have fluctuated widely since our share exchange transaction with Pierce International, Inc. During the period from January to September 2000 the bid price for our common stock has ranged from $0.95 per share to $9.13 per share. Our common stock trades only on the NASD's OTC Bulletin Board. As a result, selling our shares may be more difficult because smaller quantities of shares may be bought and sold, transactions may be delayed, and news media coverage of us is limited. Further, securities analysts do not cover our stock and institutional investors are unlikely to purchase our stock. See "Market for Registrant's Common Equity and Related Stockholder Matters." All of the shares registered for sale on behalf of the selling stockholders are "restricted securities" as that term is defined in Rule 144 under the Securities Act. We filed a Registration Statement of which this prospectus is a part to register these restricted shares for sale into the public market by the selling stockholders. The effect of this Registration Statement is to increase the number of unrestricted shares. A sudden increase in the amount of unrestricted shares may cause the price of the stock to go

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down and also could affect our ability to raise equity capital. Any outstanding shares not sold by the selling stockholders pursuant to this prospectus will remain "restricted shares" in the hands of the holder, except for those held by non-affiliates, for a period of one year, calculated pursuant to SEC Rule 144.

"Penny Stock" regulations may impair the liquidity of our common stock.

Because the bid price of our common stock is below $5.00 per share, shares of common stock may be subject to the SEC's Rule 15g-9 and other penny stock regulations under the Securities Exchange Act of 1934. Rule 15g-9 imposes sales practice requirements on broker-dealers that sell low-priced securities to persons other than established customers and institutional accredited investors. For transactions covered by this rule, a broker-dealer must make a special suitability determination for the prospective purchaser and have received the purchaser's written consent to the transaction before the sale. Consequently, this rule and other "penny stock" regulations may adversely affect the ability of broker-dealers to sell our shares and may adversely affect the ability of holders to sell their shares of common stock in the secondary market.

A small number of persons control the Company.

Robert R. Crawford, our President and sole director, controls approximately 45% of our outstanding shares of common stock. In addition, a trust for the benefit of certain adult members of Mr. Crawford's family controls approximately 18% of our outstanding shares of common stock, of which Mr. Crawford disclaims beneficial ownership. As a result, Mr. Crawford and his family are able to exercise a significant influence over all matters requiring shareholder or board of director approval, including the election of directors and approval of significant corporate transactions. Such concentration of ownership may also have the effect of delaying or preventing a change in control of the Company.

We do not intend to pay, and expect to be unable to pay, dividends on our common stock.

We have not paid dividends, and do not intend to pay any dividends in the foreseeable future, since earnings, if any, are expected to be retained for use in the development and expansion of our business.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as "anticipate," "believe," "plan," "could," "would", "estimate," "expect," "intend," "may," "should," and "will" or similar words. For example, statements about the level of capital expenditures and working capital that we may need to fund our business plan and the miles of fiber optic plant that we expect to develop are forward-looking statements. You should read statements that contain these words carefully because they discuss our future expectations, contain projections or our future results of operations or of our financial position or state other "forward-looking" information. There will likely be events in the future that we are not able to accurately predict or control. The factors listed above in the section captioned "Risk Factors" as well as any cautionary language located elsewhere in this Prospectus, provide examples of some of the risks, uncertainties and events that may cause our actual results to differ materially from the expectations se describe in our forward-looking statements. Before you invest in our common stock, you should be aware that the occurrence of the events described in these risk factors and elsewhere in this Prospectus could have a material adverse effect on our business, results of operations and financial position.

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We will not receive any proceeds from the sale of the shares of common stock by the selling stockholders.

We will bear the expenses of the registration of the shares of common stock offered herein and estimate that these expenses will be approximately $55,000.

MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is traded on the over-the-counter electronic bulletin board under the symbol "NADA". The market for the common stock has often been sporadic, volatile and limited.

The following table shows the high and low bid prices for our common stock as reported by NASDAQ during the past two years and current year. The prices reflect inter-dealer quotations, without retail markup, markdown or commissions and may not represent actual transactions.

Holders of Record

On November 28, 2000, we had approximately 477 registered holders of record of our common stock.

Dividends

Holders of the our common stock are entitled to receive dividends when and if declared by the Board of Directors out of funds legally available therefor and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities and any preferential liquidation distributions to our preferred stockholders. The Board of Directors is not obligated to declare a dividend. We have not paid any dividends on our common stock, and we do not have any current plans to pay any common stock dividends.

"Penny Stock" Rules

Because the bid price of our common stock has been below $5.00 per share, the SEC's Rule 15g-9 may apply to our common stock. This rule imposes additional sales practice requirements on a broker-dealer that sells Rule 15g-9 securities to persons other than the broker-dealer's established customers and institutional accredited investors. For transactions covered under Rule 15g-9, the broker-dealer must make a suitability determination of the purchaser and receive the purchaser's written agreement to the transaction before the sale. In addition, broker-dealers, particularly if they are market makers in the common stock, have to comply with the disclosure requirements of Rules 15g-2, 15g-3, 15g-4, 15g-5 and 15g-6 under the Exchange Act unless the transaction is

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exempt under Rule 15g-1. Consequently, Rule 15g-9 and these other rules may adversely affect the ability of broker-dealers to sell or to make markets in the common stock and also may adversely affect the ability of purchasers of the shares offered by this prospectus to resell their shares.

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SELECTED FINANCIAL DATA

The selected financial data set forth below have been derived from the Company's consolidated financial statements included elsewhere in this prospectus. The information set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's consolidated financial statements and related notes thereto included elsewhere in this prospectus.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The Company was organized in September 1998 as North American Software Associates, Limited, a Delaware corporation. The Company was organized to provide a variety of telecommunications services. On April 1, 1999, the Company acquired all of the assets of Freedom 2000, a local internet service provider, in exchange for 577,123 shares of restricted common stock of the Company. On December 3, 1999, the Company acquired all of the common stock of Action Communications, Inc. ("Action"), a provider of digital and alpha numeric paging services, in exchange for 1,731,339 shares of restricted common stock of the Company. The Action transaction has been treated for accounting purposes as a purchase of assets and liabilities, and revenues and expenses of Action prior to December 3, 1999 have not been consolidated. The financial statements for Action for the eleven month period ended November 30, 1999 are included elsewhere in this Prospectus. Effective December 21, 1999, North American Software Associates, Limited ("NAS") was acquired by Pierce International, Inc. in a share exchange transaction and in March 2000 the Company changed its name to North American DataCom, Inc. The transaction with Pierce International, Inc. has been accounted for as a reverse acquisition since the former shareholders of NAS owned controlling interest in the Company immediately following the transaction and management of Pierce International, Inc. was replaced by management of NAS.

The Company currently provides Internet and Alpha numeric paging services to the mid-south area. The current operations do not rely on trademarks, licenses, franchises or concessions held. Operations are not seasonal, do not depend on a single customer and do not have a backlog of orders.

The Company intends to provide broad-based communications and information technology services with an emphasis on wideband fiber optic and wireless telecommunications services that support enterprise data storage solutions. These services are intended to include Internet access services, on-line critical data storage and retrieval, and data and voice networking. Currently the Company only provides Internet access services and digital and alpha numeric paging services. All of the Company's historical revenues have been derived from these services.

Results of Operations:

Because the Company only acquired Freedom 2000, its Internet service provider, in April 1999, only a partial year of revenues and expenses from this activity is reflected in the Company's results of operations for fiscal 1999, compared with a full year of operations for fiscal 2000. Because the Company only acquired Action Communications, Inc., its digital and alpha numeric paging provider, in December 1999, none of the revenues and expenses from this activity is reflected in the Company's results of operations for fiscal 1999 and the quarter ended September 30, 1999, and only a partial year of operations is reflected for fiscal 2000. As a result, management does not believe that the Company's results of operation for fiscal 1999 and the quarter ended September 30, 1999 are directly comparable to results of operation for fiscal 2000 and the quarter ended September 30, 2000, respectively, and are not indicative of possible results in the future.

Fiscal Year Ended June 30, 2000 Compared to 1999

The Company's historical net service revenues consist primarily of monthly fees from customers subscribing to the Company's Internet service provider services or the Company's digital and alphanumeric paging services. Net service revenues increased to $269,649 in fiscal 2000 from $19,539 in fiscal 1999, an increase of approximately 1,280%. This growth in net service revenues was primarily the result of having a full year of operations for the internet service provider in fiscal 2000, as compared with only three month's of operations in fiscal 1999 and having seven months of operations generating approximately $93,000 of revenues for the paging services in fiscal 2000, as compared with no operations in fiscal 1999. In addition, the Company provided Internet access service to approximately 1,500 customers at June 30, 2000 as compared with only about 250 customers at June 30, 1999.

The Company's cost of services consist primarily of paging airtime, postage and delivery expenses and allocated overhead costs. Cost of services increased to $117,924 in fiscal 2000 from $24,667 in fiscal 1999, an increase of approximately 378%. This increase in cost of services was primarily related to the increase in net services provided. Cost of service, as a percent of net service revenue, fell from 126% in fiscal 1999 to 43% in

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fiscal 2000 due to the increased customer base and correlating increase in revenue. As a result, gross profit in fiscal 2000 was $151,725, as compared with a gross loss of $5,128 in fiscal 1999.

The Company incurred selling, general and administrative expenses of approximately $1,744,701 in fiscal 2000 compared with $477,612 in fiscal 1999, an increase of approximately 265%. These expenses consisted primarily of telephone expenses, insurance expenses, payroll expenses, legal and professional services and rent expense, as well as non-cash stock compensation. This increase in selling, general and administrative expenses was primarily the result of having a full year of operations for the Internet service provider in fiscal 2000, as compared with only three month's of operations in fiscal 1999 and having seven months of operations for the paging services in fiscal 2000, as compared with no operations in fiscal 1999. The Company experienced an increase of approximately 200% in the number of employees from fiscal 1999 to fiscal 2000. Approximately $195,161 of general and administrative expense in fiscal 2000 was incurred by the Company in order to pursue its broadband telecommunications network and enterprise data center business plans. In addition, approximately $211,000 of general and administrative expense was attributed to the merger with Pierce International, Inc. during fiscal 2000.

The Company incurred approximately $214,710 in other expense in fiscal 2000 as compared with $184,650 of other income in fiscal 1999. Other income (expense) was primarily associated with the sale of 500,000 shares of New York Regional Rail Corporation stock, investment income, interest expense and various miscellaneous expenses. Imputed interest of approximately $180,282 was recorded in fiscal 2000 relating to a contract to acquire rights-of-way and fiber conduit which provided for payments over a period of months without stated interest.

Three Month Period Ended September 30, 2000 Compared to Three Month Period Ended September 30, 1999

Net service revenues increased to $69,432 in quarter ended September 30, 2000 from $23,995 for the quarter ended September 30, 1999, an increase of approximately 189%. This growth in net service revenues was primarily the result of having operations generating approximately $18,174 of revenues for the paging services in quarter ended September 30, 2000, as compared with no paging operations for the same quarterly period in 1999. In addition, the Company provided Internet access service to approximately 1,246 customers at September 30, 2000 as compared with only about 434 customers at September 30, 1999.

Cost of services increased to $48,014 for the quarter ended September 30, 2000 from $10,378 for the quarter ended September 30, 1999. This increase in cost of services was primarily due to an increase in customers, net services provided, and increasing cost concerning telecommunications services. Cost of service, as a percent of net service revenue, increased from 43.3% for the quarter ended September 30, 1999 to 69.2% for the quarter ended September 30, 2000. As a result, gross profit for the quarter ended September 30, 2000 was $21,418, as compared with $13,617 for the quarter ended September 30, 1999.

The Company incurred selling, general and administrative expenses of approximately $715,864 for the quarter ended September 30, 2000 compared with $197,179 for the quarter ended September 30, 1999, an increase of approximately 263%. These expenses consisted primarily of telephone expenses, insurance expenses, payroll expenses, legal and professional services and rent expense. This increase in selling, general and administrative expenses was primarily the result of having a full period of operations for paging services in during the quarter ending September 30, 2000, as compared with no paging services operations for the quarter ended September 30, 1999. In addition, the Company experienced an increase of its number of employees to 28 employees at September 30, 2000 as compared to 11 employees at September 30, 1999. Approximately $131,813 of general and administrative expense for the quarter ended September 30, 2000 was incurred by the Company in order to pursue its broadband telecommunications network and enterprise data center business plans.

The Company incurred approximately $174,640 in other expense for the quarter ended September 30, 2000 as compared with $3,823 of other income for the quarter ended September 30, 1999. Other income (expense) was primarily associated with investment income, interest expense and various miscellaneous expenses. Imputed interest of approximately $182,263 was recorded in the quarter ended September 30, 2000 relating to a contract to acquire rights-of-way and fiber conduit which provided for payments over a period of months without stated interest.

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The Company's primary liquidity and capital needs consist of funding cash flow losses from operations, constructing and equipping the Company's enterprise data center and constructing the Company's fiber optic and broadband wireless telecommunications network. In fiscal 2000 the Company used approximately $1,183,421 of net cash in operations. In fiscal 1999, the Company used approximately $429,698 of net cash in operations. In fiscal 2000, approximately $236,906 was provided by investing activities, of which $700,000 was attributed to the Company's collection of a $700,000 receivable in connection with the sale of New York Regional Rail Corporation stock, and $463,094 was used for the purchase of property and equipment. In fiscal 1999, approximately $142,399 was used for the purchase of property and equipment. In fiscal 2000 and fiscal 1999, approximately $954,110 and $585,450, respectively, in funds were provided from financing activities, principally consisting of proceeds from selling equity securities.

For the quarters ended September 30, 2000 and 1999, the Company used approximately $522,273 and $201,561 of net cash in operations, respectively. For the quarter ended September 30, 2000, the Company used approximately $143,977 in investing activities for the purchase of property and equipment and advanced funds of $200,000 in connection with its proposed Turkish venture. Approximately $1,597,125 in funds were provided from financing activities for the quarter ended September 30, 2000, principally consisting of proceeds from selling equity securities. Payments of $575,000 against a note payable were made in the quarter. For the quarter ended September 30, 1999, the Company generated $681,712 in investing activities (principally from the receipt of $700,000 in proceeds discussed above) and generated $53,022 in financing activities.

In March 2000, the Company entered into an agreement with Qwest Communications to purchase approximately 500 miles of fiber conduit from New Orleans to Mobile, Alabama and from Pensacola, Florida to Jacksonville, Florida. The total purchase price under this agreement is approximately $15,120,000. Payments totaling approximately $9,000,000 are currently due or past due under the agreement. Payments are due quarterly through March 31, 2001. The Company has not made any of the payments due under this agreement, but no default has been declared.

In August 2000, the Company also entered into an agreement with Thoroughbred Technology and Telecommunications to lay fiber conduit from Atlanta, Georgia to Chattanooga, Tennessee and from Chattanooga to Memphis, Tennessee. The total cost of this project under the agreements that the Company has already executed is approximately $29,000,000. 10% of this cost was due October 15, 2000, with the remainder due as segments of the project are completed. A notice of default under this agreement has been received by the Company as the Company has not made any of the payments due under this agreement.

If the Company is not able to obtain financing or raise funds to meet its obligations under the Qwest agreement and cure the default and meet its obligations under the Thoroughbred Technology agreement, the Company may lose the ability to continue to lay fiber optic cable and be subject to claims for contract breach. This would impede the Company's ability to develop and operate its planned fiber optic and wireless broadband network and enterprise data storage facility.

In July, the Company advanced $200,000 to Global Fiber Optic and Wireless Communications, Ltd. ("Global") in anticipation of developing a joint venture to develop internet and information technology services for Turkey. The Company and Global plan to each have a fifty percent interest in any joint venture formed. The Company will be required to provide electronic and communications technologies, while Global will provide rights-of-way and other real estate as needed in Turkey.

Management expects that the Company will require approximately $150,000,000 in capital over the next twelve months to fund the following anticipated needs. Estimated expenditures include, but are not limited to, approximately $81,000,000 to acquire network rights-of-way, installation of conduit and fiber optic cable, $28,000,000 for optical electronics and software, $10,000,000 for operation support systems and network operation center software, $9,500,000 for Tier IV enterprise data center infrastructure upgrade and improvements, $11,000,000 in working capital and approximately $10,500,000 for financing costs. Actual costs may vary from management's current expectations.

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The Company plans to fund its liquidity and capital needs through joint venture arrangements with strategic business partners, vendor financing and the issuance of equity and debt securities. The Company is proceeding with discussions with strategic partners, but has no commitments to provide financing as of the date of this Prospectus.

In June 2000, the Company sold 300 shares of Series B cumulative convertible preferred stock to Robert Crawford, the Company's president, director and principal shareholder, for a purchase price of $1,000 per share. In order to pay certain accounts payable and for use for working capital, in September 2000, Mr. Crawford purchased from the Company 500 additional shares of Series B cumulative convertible preferred stock for a purchase price of $1,000 per share. Each share of the Series B cumulative convertible preferred stock is convertible into 500 shares of common stock commencing July 1, 2001, and is entitled to an annual dividend of $60.

In order to pay certain accounts payable and for use for working capital, in July 2000 the Company agreed to sell 317,500 shares of common stock for a total purchase price of $635,000. In August 2000, the Company closed the placement of these shares, and the Board of Directors authorized the issuance of the 317,500 shares of common stock to satisfy the agreement. The Company further agreed to use its best efforts to register the resale of such shares with the SEC prior to February 2001. These shares are included in the registration statement of which this Prospectus is a part.

In September 2000, the Company closed the private placement of 150,000 shares of common stock for a total purchase price of approximately $442,125. The Company agreed to pay certain fees associated with the placement through the issuance of an additional 3,000 shares of restricted common stock and the payment of $13,700 in cash. The terms of the transaction provide that the Company shall file a registration statement with SEC for the resale of the 150,000 shares by October 5, 2000. For each fifteen day period following October 5, 2000 in which the registration statement is not filed with the SEC, the Company is required to make a payment to the private investor equal to $8,842 payable in cash or common stock based upon the closing OTC bid price of the shares of Company's common stock as of the end of each fifteen day period. As of December 8, 2000, the Company had issued an additional 20,225 shares of common stock to such investors for not filing such registration statement by October 5, 2000. In addition, if the registration statement is not declared effective by the SEC by February 2, 2001, the Company is required to make a payment to the private investor equal to $44,212 payable in cash or common stock based upon the closing OTC bid price of the shares of the Company's common stock as of such date. These shares are included in the registration statement of which this Prospectus is a part.

The Company's liquidity and capital needs are substantial and the Company has no present commitments to fund those needs. As reflected in the Company's financial statements for fiscal year ended June 30, 2000 filed with the Company's Annual Report on Form 10-K, the auditors have expressed substantial doubt about the ability of the Company to continue as a going concern. As stated in note 11 to the unaudited financial statements, as of September 30, 2000, the Company has negative working capital with obligations totaling $15,240,123 due within one year of which approximately $9,000,000 is past due. In addition, the Company has sustained losses totaling $2,971,947 since inception. The inability of the Company to secure additional capital and financing and the inability of the Company to attain and maintain profitable operations would have a material adverse effect on whether the Company would be successful in implementing its proposed business plan and continue as a going concern.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS 133 requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

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The Financial Accounting Standards Board issued Interpretation ("Interpretation") No. 44, "Accounting for Certain Transactions involving Stock Compensation, an Interpretation of APB Opinion No. 25" which is effective July 1, 2000. Interpretation No. 44 clarifies (a) the definition of employee for purposes of applying Opinion 25, (b) the criteria for determining whether a stock compensation plan qualifies as a noncompensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock option or award, and (d) the accounting for an exchange of stock compensation awards in a business combination. Adoption of the provisions of the Interpretation did not have a significant impact on our financial statements.

In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101, -- Revenue Recognition, effective for fiscal years starting January 1, 2000, which outlines the basic criteria that must be met to recognize revenue and provides guidance for presentation of revenue and for disclosure related to revenue recognition policies in financial statements filed with the Securities and Exchange Commission. We believe that adopting SAB No. 101 will not have a material impact on our financial position or results of operations.

In September 2000, the Financial Accounting Standards Board issued SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities ("SFAS 140"). SFAS 140 revises the standards for accounting for Securitizations and other transfers of financial assets and collateral and is effective for fiscal years ending December 15, 2000. We believe that adopting SFAS 140 will not have a material impact on our financial position or results of operations.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Effective June 7, 2000, the Company retained BDO Seidman, LLP ("BDO") to act as the Company's independent certified public accountant. In this regard, BDO replaced Spicer Jeffries & Co. ("Spicer") which audited the financial statements of Pierce International, Inc., the Company's legal acquiror for the fiscal year ended June 30, 1999. The reports of Spicer for this fiscal year did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles. However, the report of Spicer for this fiscal year was qualified with respect to uncertainty as to the Company's ability to continue as a going concern. During the Company's two most recent fiscal years and subsequent interim periods, there were no disagreements with Spicer on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Spicer, would have caused it to make reference to such disagreements in its reports.

The Company has authorized Spicer to discuss any matter relating to the Company and its operations with BDO.

The change in the Company's auditors was recommended and approved by the board of directors of the Company. The Company does not have an audit committee.

During the two most recent fiscal years prior to June 7, 2000, the Company did not consult with BDO regarding the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, or any matter that was the subject of a disagreement or reportable event as defined in the regulations of the Securities and Exchange Commission.

The Company filed a Current Report on Form 8-K dated June 15, 2000, reporting the change in accountants. Spicer reviewed the disclosures in the Form 8-K. The Company advised Spicer that it had the opportunity to furnish the Company with a letter addressed to the Securities and Exchange Commission concerning any new information, clarifying the Company's disclosures in the Form 8-K or stating any reason why Spicer did not agree with any statements made by the Company in the Form 8-K. In a letter to the Company dated June 16, 2000, Spicer advised the

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Company that it was in agreement with the statements made by the Company concerning that firm.

Quantitative and Qualitative Disclosures about Market Risks

The Company has not entered into any transaction using derivative financial instruments and believes that its exposure to market risk associated with other financial instruments is not material. The Company's cash equivalents are maintained primarily in money market risks maturing in less than three months. Accordingly, the Company does not believe that it has any significant exposure to interest rate risk. The Company currently operates only in the United States and all sales are made in U.S. dollars. Accordingly, the Company does not have any material exposure to foreign currency rate fluctuations.

BUSINESS

Overview

The Company was organized in September 1998 as North American Software Associates, Limited, a Delaware corporation. We were organized to provide a variety of telecommunications services. Effective December 21, 1999, North American Software Associates, Limited was acquired by Pierce International, Inc., a Colorado corporation, in a share exchange transaction, and in March 2000, we moved our state of incorporation to Delaware and changed our name to North American DataCom, Inc.

We intend to provide communications and information technology services with an emphasis on wideband fiber optic and wireless telecommunications services that support enterprise data storage solutions. These services are intended to include Internet access services, on-line critical data storage and retrieval, and data and voice networking. Our business plan envisions offering a wideband fiber optics and wireless telecommunications network that will service primarily Tier 2 markets by supporting wideband data, voice and internet transmission. Tier 2 markets consist of those population centers that are not in the primary 100 largest areas but are uniquely located along railroad rights-of-way where fiber optic transmission facilities can be easily accessed. Our short-term focus is on providing such services to Tier 2 markets in the southeast, primarily from Atlanta to Memphis.

We plan to engage in, and are currently in the process of developing, the following lines of business:

- Enterprise Data Storage and Computing Facility - Fiber Optic and Broadband Wireless Network

We are currently engaged in the following lines of business:

- Internet Access Service Provider - Digital and Alpha Paging Services - Telecommunications Consulting Projects

Enterprise Data Storage. We are in the process of furnishing and equipping a facility in Iuka, Mississippi to position ourselves to provide secure enterprise data storage and Internet access services for corporate, government and other users. In January 1999 we entered into a lease agreement for use of the facility that was originally constructed for the National Aeronautics and Space Administration ("NASA") in 1994 to support the advanced solid rocket motor project. When completed the facility originally housed a fully functional $20 million computer and network operations center and provided information processing and on-line data storage with a high level of security. Budget cuts for the space shuttle caused the closure of this facility in 1996. We believe that this facility, with its existing infrastructure and security features, is ideally suited for providing secure enterprise data storage and access services. Although we currently do not have any agreements with third parties to provide these services, we are proceeding to equip and furnish our facility to position ourselves to deliver these services in the future.

Fiber Optic and Broadband Wireless Network. We are in the process of building a fiber optic and broadband wireless communications network, which will allow for the high-speed transmission of large amounts of data. We intend to market our high-speed data transmission network to businesses, government agencies and institutions that

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may prefer optical networks over existing telephone and satellite data transmission systems. In March 2000, we entered into an agreement with Qwest Communications in which we purchased 504 miles of conduit installed along the CSX railroad track from New Orleans, Louisiana to Mobile, Alabama, and from Pensacola, Florida to Jacksonville, Florida. We have not yet installed fiber optic cable within the conduit that we purchased from Qwest Communications. The agreement with Qwest calls for payments of approximately $15 million over the course of the agreement, approximately $9 million of which is currently due or past due. In August 2000, we entered into an agreement with Thoroughbred Technology and Telecommunications to lay fiber conduit between Atlanta, Georgia and Chattanooga, Tennessee and from Chattanooga to Memphis, Tennessee, and we have approximately 100 miles of conduit currently installed out of a total of 525 miles. We have not yet installed fiber optic cable within such conduit. The agreement calls for payments of approximately $29 million over the course of the agreement, approximately $2.9 million of which was due October 15, 2000 with the balance due in specified installments as the conduit is installed. We have received a notice of default under this contract, as we have not made the payment due October 15, 2000 and we are not currently able to make the payment. In addition, we have entered into an agreement with Tishomingo Railroad to provide last mile access to our enterprise data center in Iuka, Mississippi.

Internet Access Service Provider. As of September 30, 2000, we provided Internet access services to approximately 1,500 customers in Mississippi, Tennessee and Alabama. The internet services that we provide to our customers include basic dial-up access to the Internet through standard computer modems, high-speed Internet access and the design and hosting of websites for customers. As our fiber optic and broadband wireless network expands, we will attempt to market our Internet access provider services to businesses and retail customers along the route of the network.

Digital and Alpha Paging Services. Through our wholly-owned subsidiary, Action Communications, Inc. ("Action"), we provide digital and alpha numeric paging services to nine southeastern states and are expanding our coverage area to include portions of the eastern and southwestern United States. As a specialized mobile radio carrier, Action also provides dispatch, telephone and global position system services.

Telecommunications Consulting Projects. We also propose to engage in telecommunications consulting projects for corporations, governmental agencies and institutions to upgrade their computer systems to function more effectively.

Industry Background

Internet usage is growing rapidly, and businesses are increasingly embracing the Internet as a venue to sell their products and services. Many Internet operations are critical to the businesses and customers using the operations. In order to provide the quality, reliability, availability and redundancy of these critical operations, corporate information technology teams must make significant capital investments in facilities, personnel, equipment and networks which must be maintained and upgraded on a continuous basis. This investment is an inefficient use of resources, and has created the opportunity for businesses like us to offer server hosting, Internet connectivity, remote enterprise data storage and managed and professional telecommunications services to third parties to enable reliable, high performance for critical Internet operations.

The data storage management market has expanded rapidly as more businesses and governmental agencies are outsourcing their data storage needs. This has led to significant growth in the industry of data storage infrastructure services, enterprise storage resource management, data replication product development and an increase in the number of data centers necessary for the growth in the data storage market. Although we are still in our development phase, we believe that our current infrastructure and planned expansion facilities will be well-positioned for servicing the growing need of data storage services.

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Products and Services

Enterprise Data Storage. We propose to become a Tier IV data center supporting secure enterprise data hosting and storage services. A Tier IV data center provides for its users site infrastructure capacity and capability to permit any planned activity without disruption to the critical load. We lease a state-of-the-art facility in Iuka, Mississippi that was originally designed and constructed to house the computer engineering and programming center for the NASA advanced solid rocket motor project. We believe that this facility is uniquely designed to provide the physical environment necessary for a Tier IV data center. If completed, this data center will enable us to offer enterprise storage operations, Internet hosting co-location, web-based data storage and general real-time data backup running 24-hours-a-day, 7-days-a-week. The facility is custom designed with raised floors, HVAC temperature control systems with separate cooling zones and full electric power redundancy. We intend to develop and upgrade our current data center in Iuka, Mississippi to support up to 65,000 square feet of raised floor data center services.

Our facility contains a full range of security features. These include 24-hour-a-day secured access with security breach alarms, cipher lock systems and security guards on premises. The facility is housed in a government constructed, nearly tornado-proof building using full redundant primary power from two sources with multiple backup power generators. The facility currently has a 1,000 square foot, temperature controlled telecommunications room adjacent to a 3,200 square foot raised floor, temperature controlled computer room complete with security, UPS power backup and emergency diesel generator backup. The complex has a 50 mega-watt redundant power source provided by a TVA power station for current and additional power requirements which should meet all of our power requirements.

In addition, we provide 24-hour systems management with onsite personnel who are trained in the areas of networks, Internet and transmission systems, and who are available to monitor enterprise storage operations, data center services, network operation controls, and Internet hosting. This physical and technical environment is expected to provide our potential customers the reliability and flexibility necessary to store mission critical web-based information at affordable rates.

In order to upgrade our existing facilities to offer Tier IV services we will need to upgrade various elements of our facilities, including: (i) multiple data entrances, (ii) multiple power supplies, (iii) enhanced physical security for the premises and (iv) expansion of square footage of raised floor space. Currently we have data access to our hosting facility provided by microwave wireless transmission and leased lines from Atlanta and Memphis. As our fiber capacity is completed we expect to be able to provide dual redundant alternative data entrances to our hosting and storage facility.

We plan to construct our enterprise data storage infrastructure around the E-Business Infrastructure Architecture. E-Business Infrastructure Architecture is the combination of hardware and software that is necessary to operate the Tier IV data center. The core components of our data storage infrastructure are expected to be fault tolerant enterprise storage, Hewlett-Packard and Sun Micro servers, and Oracle database software. We have selected a proven network structure and best in class components to build our enterprise storage system. We expect the hardware configuration for data storage to be EMC's Symmetrix open storage solution. The redundant storage architecture and world class support is expected to make our storage solution equal to other business data center providers.

The software that we have chosen for use in our enterprise storage centers provides backups, testing, offline processing and performance measurements to customers that require zero downtime. Our remote storage facility is planned to provide mirroring of data between customer's data storage systems to ensure continuous data availability.

We expect to use our fiber optic backbone for optical data transport and retrieval.

While we are building our fiber network, we have installed a communications tower to provide wireless connectivity, initially at 155 MBPS, from our facility in Iuka, Mississippi into the nationwide Internet and telecommunications system through Atlanta and Memphis. This provides us with an interim capability to test market our enterprise data storage services, web-hosting services, and competitive local exchange carrier (CLEC) and interstate exchange carrier (IXC) telephone services to select markets.

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Internet Access Service Provider. We provide Internet access service under the tradename "Freedom 2000." We offer a wide range of Internet access services in the northeastern Mississippi area, including access services to business, government and residential users, web site development, web hosting, and Internet network development.

Digital and Alpha Paging Services. Action provides digital and alpha numeric paging in nine southeastern states and is currently attempting to expand its coverage area to include portions of the eastern and southwestern United States. Action is a specialized mobile radio carrier in northern Mississippi providing dispatch, telephone and global positioning system services to support automated vehicle location services in the coverage area.

Telecommunications Consulting Projects. We anticipate providing telecommunications consulting services to governments, agencies, institutions and business customers. In August 2000 we became a member of the Smart Solutions Group. This group has proposed a complete state-of-the-art healthcare information system for the country of Turkey. Smart Solutions Group includes U.S. corporations such as EMC, Cisco, Oracle, Sun Microsystems and Hewlett-Packard. The Smart Solutions Group has previously provided consultation services in connection with security and healthcare plans in Belgium, Germany, Slovenia and Singapore. We believe that our experience in creating our fiber optic network in the southeastern United States will make us uniquely qualified to consult and advise on construction on a similar system in Turkey. As of September 25, 2000, we had not reached any formal agreements for consulting or other services with Turkey.

Sales and Marketing

We have formed a sales and marketing group with its initial focus on wholesale fiber optic and broadband services. The direct sales group plans on forming strategic partnerships with other businesses offering complementary services to target market sectors for fiber, bandwidth and data storage. We also plan to explore alternative sales and marketing channels focusing on the inter-exchange carriers, competitive local exchange carriers, Internet service providers and data centers. Additional target markets include dotcom companies, service providers and businesses which support small, medium and larger operations that are computing sensitive. We retain a government lobbying firm in Washington, D.C. to advise us on government contracting opportunities.

Fiber Optic and Broadband Wireless Network. When our fiber optics network is complete we expect to market our services by focusing on Tier 2 communities along the route of the network. This will include interconnecting with providers in Atlanta, Chattanooga and Memphis.

Enterprise Data Storage. When our data hosting and storage facilities are complete and operational, we expect to market our services primarily to governments, agencies, educational institutions, medical institutions and larger businesses. Our sales and marketing staff will focus on marketing its data center for dedicated Web hosting and complex custom hosting and professional services. In addition, we intend to offer general co-location and shared Web servers for customers that need multiple service offerings. We will further focus on developing strategic partnerships to offer multiple service offerings, including multiple service site support and dual data center redundancy. It is expected that the services will exploit our network infrastructure for data availability, data protection, scaleability and performance for the medical, financial, government and corporate arenas.

Competition

The markets we currently serve, as an internet service provider and a digital and alpha paging service provider, and the markets we plan to enter, as a data storage provider and fiber optic and wireless network service provider, are intensely competitive, and we expect competition from existing service providers and new market entrants in the future. The principal competitive factors that may affect our ability to compete include ability to deliver services when requested by customers, technical expertise, network capability, reliability and quality of service, access to network resources, including circuits, equipment and interconnection capacity to other networks, price, brand name recognition, network security and financial resources.

There can be no assurance that we will have the resources or expertise to compete successfully in the future.

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Current and potential competitors in the market include providers of server hosting services, national foreign and regional ISPs, global, regional and local telecommunications companies and the Regional Bell Operating Companies, and other technology services companies.

Most of our competitors have substantially greater resources, more customers, longer operating histories, greater name recognition, and more established relationships in the industry. As a result, these competitors may be able to develop and expand their network infrastructures and service offerings more quickly, devote greater resources to the marketing and sale of their products and adopt more aggressive pricing policies. In addition, these competitors have entered and will likely continue to enter into business relationships to provide additional services competitive with those that we are proposing to provide.

Some of our competitors may be able to provide customers with additional benefits in connection with the Internet system and network management solutions, including reduced communications costs, which could reduce the overall costs of their services relative to the costs of our services. We may not be able to offset the effects of any price reductions. In addition, we believe that our market is likely to encounter consolidation in the future which could result in increased price and other competition.

Government Regulation

A significant portion of the services that we offer or that we expect to offer are or will be subject to regulation at the federal and/or state levels. The Federal Communications Commission (the "FCC") and state public utility commissions regulate telecommunications carriers, which are companies that offer telecommunications services to the public or to all prospective users on standardized rates and terms. Our paging services and our anticipated data transport services are expected to be regulated services.

The FCC exercises jurisdiction over common carriers and their facilities and services, to the extent that they are providing interstate or international communications. The various state utility commissions retain jurisdiction over telecommunications carriers and their facilities and services to the extent that they are used to provide communications that originate and terminate within the same state. The degree of regulation varies from state to state.

In recent years, the regulation of the telecommunications industry has been in a state of flux as the United States Congress and various state legislatures have passed laws seeking to foster greater competition in telecommunications markets. The FCC and state commissions have adopted many new rules to implement those new laws and to encourage competition. These changes, which are still incomplete, have created new opportunities and challenges for us and our competitors. Certain of these and other existing federal and state regulations are currently the subject of judicial proceedings, legislative hearings and administrative proposals which could change, in varying degrees, the manner in which this industry operates. Neither the outcome of these proceedings nor their impact upon the telecommunications industry can be predicted at this time. Indeed, future federal or state regulations and legislation may be less favorable to us than current regulations and legislation and therefore have a material and adverse impact on our business and financial prospects by undermining our ability to provide telecommunications services at competitive prices.

Federal Regulation and Legislation. We must comply with the requirements of a common carrier under the Communications Act of 1934, as amended, to the extent we provide regulated interstate services. These requirements include an obligation that our charges, terms and conditions for communications services must be "just and reasonable" and that we may not make any "unjust or unreasonable discrimination" in our charges or terms and conditions. The FCC also has jurisdiction to act upon complaints against common carriers for failure to comply with their statutory obligations.

Comprehensive changes to the Communications Act were made by the 1996 Telecommunications Act, enacted on February 8, 1996. It represents a significant milestone in telecommunications policy by establishing competition in local telephone service markets as a national policy. The 1996 Telecommunications Act removes many state regulatory barriers to competition and forecloses state and local governments from creating laws preempting or effectively preempting competition in the telecommunications market.

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The 1996 Telecommunications Act places substantial interconnection requirements on the traditional local telephone companies. Traditional local telephone companies are required to provide physical collocation, which allows us and other similar companies and other interconnectors to install and maintain our own network termination equipment in the central offices of traditional local telephone companies, and virtual collocation only if requested or if physical collocation is demonstrated to be technically infeasible. This requirement is intended to enable us, along with other competitive carriers, to deploy our equipment on a relatively convenient and economical basis.

The 1996 Telecommunications Act in some sections is self-executing. The FCC issues regulations interpreting the 1996 Telecommunications Act that impose specific requirements upon which we and our competitors rely. The outcome of various ongoing FCC rulemaking proceedings or judicial appeals of such proceedings could materially affect our business and financial prospects by increasing the cost or decreasing our flexibility in providing telecommunications services. The FCC prescribes rules applicable to interstate communications, including rules implementing the 1996 Telecommunications Act, a responsibility it shares in certain respects with the state regulatory commissions.

The 1996 Telecommunications Act also directs the FCC, in cooperation with state regulators, to establish a universal service fund that will provide subsidies to carriers that provide service to individuals that live in rural, insular, and high-cost areas. A portion of carriers' contributions to the universal service fund also will be used to provide telecommunications-related facilities for schools, libraries and certain rural health care providers. The FCC released its initial order in this context in June 1997, which requires all telecommunications carriers to contribute to the universal service fund. The FCC's implementation of universal service requirements remains subject to judicial and additional FCC review. Additional changes to the universal service regime could increase our costs and could otherwise adversely affect our business.

State Regulation. Some of our services that are not limited to interstate access potentially may be classified as intrastate services subject to state regulation. All of the states where we operate, or intend to operate, require some degree of state regulatory commission approval to provide certain intrastate services and maintain ongoing regulatory supervision. In most states, intrastate tariffs are also required for various intrastate services, although our services are not subject to price or rate of return regulation. Actions by state public utility commissions could cause us to incur substantial legal and administrative expenses and adversely affect our business.

Local Government Regulation. In certain instances, we may be required to obtain various permits and authorizations from municipalities, such as for use of rights-of-way, in which we operate transmission facilities. Subject to litigation are whether various actions of local governments over the activities of telecommunications carriers such as ours, including requiring payment of franchise fees or other surcharges, pose barriers to entry for competitive local exchange carriers that violate the 1996 Telecommunications Act or may be preempted by the FCC. While we are not a party to this litigation, we may be affected by the outcome. If municipal governments impose conditions on granting permits or other authorizations, or if they fail to act in granting such permits or other authorizations, the cost of providing telecommunications and transmission services may increase or negatively impact our ability to expand our network on a timely basis and adversely affect our business.

Employees

As of November 28, 2000, we had 28 full-time and 3 part-time employees. None of our employees is represented by a labor union, and we believe that our employee relations are good. We believe that our future success will depend in part on our continued ability to attract, hire and retain qualified personnel. The competition for personnel is intense, and there can be no assurance that we will be able to identify, attract and retain personnel in the future.

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Properties

In January 1999, we entered into a ten-year lease for 25,000 square feet of space in a specialized building in the Tri-State Commerce Park in Iuka, Mississippi, with a current annual rent of approximately $87,500. Annual rent under the lease increases to $100,000 for the year 2001 and increases to $125,000 for years 2002 through 2008. The facility was completed for NASA in 1994 to provide computer engineering and programing for the advanced solid rocket motor project. Budget cuts for the space shuttle caused closure of this facility in 1996. We believe that this facility, with its existing infrastructure and security features, is ideally suited for our present and proposed business operations. The lease may be terminated, with or without cause, upon ninety days written notice by either the lessor or us. In the event of an early termination of the lease, we would need to relocate our core operational facility. The early termination of the lease could adversely affect our operations and result in significant relocation expenses. In such event, we may not be able to locate a similar specialized structure within the Iuka, Mississippi area in which to conduct our data storage operations. The lease also provides us with a right of first refusal to lease an additional 75,000 square feet of space in the building. We are currently negotiating with the lessor of the property for an extension of the lease, modification of the termination provisions of the lease and the option for us to purchase the property.

We also have a right of first refusal which expires in July 2001 to lease an 18,000 square foot building and a 36,000 square foot building in the Iuka, Mississippi area for our operations.

We also lease approximately 3,000 square feet of office space in Denver, Colorado at an annual rent of approximately $36,000, which is used primarily for sales and marketing purposes.

Legal Proceedings

We are not currently involved in any lawsuits.

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MANAGEMENT

Our executive officers and directors as of November 28, 2000 are listed below. Each director listed below will hold office until the next annual meeting of shareholders. Cumulative voting is not permitted in the election of directors.

Robert Crawford has been a director and the President of the Company since August 1998. From 1989 to 1998, Mr. Crawford served as the Chairman and Chief Executive Officer of New York Regional R