Townpagesnet Com PLC – IPO: ‘424B1’ on 4/30/99

As of:  Friday, 4/30/99   ·   Accession #:  1047469-99-17356   ·   File #:  333-72075

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Initial Public Offering (IPO):  Prospectus   —   Rule 424(b)(1)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Prospectus                                            98    478K 

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                                                Filed pursuant to Rule 424(b)(1)
                                                      Registration No. 333-72075

[LOGO]

TOWNPAGESNET.COM PLC

2,200,000 AMERICAN DEPOSITARY SHARES
------------------

TownPagesNet.com plc produces and delivers                              
TownPages(-Registered Trademark-), an interactive Internet information service  
in the United Kingdom.                                                          

We are offering 2,200,000 American depositary shares of TownPagesNet.com
plc, an English company. Each ADS represents one of our ordinary shares, which  
for an English company are equivalent generally to shares of common stock of a  
United States corporation. Our ADSs will be evidenced by American depositary    
receipts.                                                                       

Prior to this offering, there has been no public market for our ADSs or 
ordinary shares. Our ADSs have been approved for listing on the American Stock  
Exchange under the symbol "TPN."                                                

   Investing in our ADSs involves numerous risks. See "Risk Factors" beginning
on page 6. Also, our controlling shareholder and other existing shareholders    
will derive personal benefits from this offering. See "Risk Factors" and        
"Related Party Transactions" on page 57.                                        

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.                                                               

                                                        [Enlarge/Download Table]

                                                                                          PER ADS       TOTAL    
                                                                                                                 
Initial Public Offering Price........................................................... $   10.00  $  22,000,000
Underwriting Discount................................................................... $    0.85  $   1,870,000
Total Proceeds, before expenses,                                                                                 
  to TownPagesNet.com plc............................................................... $    9.15  $  20,130,000

The underwriters may, under certain circumstances, purchase up to an    
additional 330,000 ADSs from TownPagesNet.com plc at the initial public offering
price less the underwriting discount.                                           

  Delivery of the ADSs will be made on or about May 5, 1999 in New York, New
York, against payment in immediately available funds.                           

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

DIRKS & COMPANY, INC.                                                           

J.P. TURNER & COMPANY, L.L.C. 

                                                  SECURITY CAPITAL TRADING, INC.

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

Prospectus dated April 30, 1999 
------------------------

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ARTWORK FOR PROSPECTUS INSIDE FRONT COVER PAGE CONSISTS OF TWO PICTURES OF      
TOWNPAGES KIOSKS AND ONE COPY OF A PRINT ADVERTISEMENT OF THE TOWNPAGES SERVICE.

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                      PAGE   
                                                      -----  
                                                             
PROSPECTUS SUMMARY...............................           1
RISK FACTORS.....................................           6
EXCHANGE RATE INFORMATION........................          18
USE OF PROCEEDS..................................          19
DIVIDEND POLICY..................................          20
CAPITALIZATION...................................          21
DILUTION.........................................          22
SELECTED FINANCIAL DATA..........................          23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL            
  CONDITION AND RESULTS OF OPERATIONS............          24
BUSINESS.........................................          31
MANAGEMENT.......................................          46
PRINCIPAL STOCKHOLDERS...........................          56


                                                      PAGE   
                                                      -----  
                                                             

RELATED PARTY TRANSACTIONS.......................          57
DESCRIPTION OF SHARE CAPITAL.....................          59
DESCRIPTION OF AMERICAN DEPOSITARY RECEIPTS......          64
TAXATION.........................................          71
SHARES ELIGIBLE FOR FUTURE SALE..................          76
UNDERWRITING.....................................          77
LEGAL MATTERS....................................          79
EXPERTS..........................................          79
ADDITIONAL INFORMATION...........................          79
SERVICE OF PROCESS AND ENFORCEMENT OF                        
  LIABILITIES....................................          80
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.......         F-1

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

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH   
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY BE USED ONLY WHERE IT IS LEGAL 
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE 
ON THE DATE OF THIS DOCUMENT.                                                   

IN CONNECTION WITH AN UNDERWRITTEN OFFERING, THE SEC RULES PERMIT THE   
UNDERWRITERS TO ENGAGE IN TRANSACTIONS THAT STABILIZE THE PRICE OF OUR          
SECURITIES. THESE TRANSACTIONS MAY INCLUDE, AMONG OTHER THINGS, PURCHASES FOR   
THE PURPOSE OF FIXING OR MAINTAINING THE PRICE OF OUR SECURITIES AT A LEVEL THAT
IS HIGHER THAN THE MARKET WOULD DICTATE IN THE ABSENCE OF SUCH TRANSACTIONS. WE 
DO NOT KNOW WHETHER THE UNDERWRITERS WILL ENGAGE IN ANY TRANSACTIONS OF THAT    
SORT. IF THE UNDERWRITERS ENGAGE IN ANY TRANSACTIONS, OF THAT TYPE, THEY MAY    
DISCONTINUE THEM AT ANY TIME.                                                   

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

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PROSPECTUS SUMMARY

YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED   
INFORMATION REGARDING US AND THE SECURITIES WE ARE OFFERING FOR SALE BY MEANS OF
THIS PROSPECTUS AND OUR FINANCIAL STATEMENTS AND NOTES THERETO APPEARING        
ELSEWHERE IN THIS PROSPECTUS. THE SUMMARY HIGHLIGHTS INFORMATION CONTAINED      
ELSEWHERE IN THIS PROSPECTUS. IT IS NOT COMPLETE AND MAY NOT CONTAIN ALL OF THE 
INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN THE ADSS.              
------------------------

We publish our financial statements in pounds sterling. For your        
convenience, this prospectus contains translations of certain pound sterling    
amounts into United States dollar amounts. Unless otherwise indicated, all      
amounts expressed in United States dollars are based upon conversions of amounts
of pounds sterling into United States dollars at the rate of $1.6628 per pound  
sterling, the noon buying rate in New York City for cable transfers in pounds   
sterling certified for customs purposes by the Federal Reserve Bank of New York 
on December 31, 1998. See "Exchange Rate Information" for historical information
regarding the noon buying rate. We have not actually converted our assets in    
pounds sterling into United States dollars. If we were to convert our assets in 
pounds sterling into United States dollars the conversion would be at a         
different rate.                                                                 

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

THE COMPANY 

GENERAL BACKGROUND                                                              

We produce and deliver TownPages, an Internet-based interactive service 
designed to provide comprehensive, up-to-date locally-focused information about 
specified towns and cities in the United Kingdom in a graphically pleasing      
format. TownPages, a portal to the Internet, is accessible through standard     
connections to our Web site at www.townpages.co.uk. Our free-to-use touch-screen
public information point kiosks are a key element of our information delivery   
system. We seek to place our kiosks at high traffic, high visibility locations  
in covered communities. Our kiosks are intended to improve our brand recognition
and to generate additional traffic on TownPages. We believe that our            
touch-screen kiosks are easily operated by people with no previous Internet or  
computer experience. We currently rely on third parties to manufacture,         
assemble, install and service our kiosks.                                       

  We believe that as users spend more time on the Web, they are increasingly
seeking information about local events, places of interest, shopping and other  
information regarding the communities where they spend most of their time and   
money. Businesses, in turn, are seeking cost-effective means to target          
advertising and direct marketing efforts based on demographic characteristics,  
specific interests, and geographic locations.                                   

   TownPages users can access information about each covered community's local
government and its services, tourist attractions, hotels, restaurants, public   
transportation timetables, shopping, real estate listings, employment           
opportunities, arts and entertainment events, community activities, recreation, 
businesses, professional services, and local news, sports and weather.          
Interactive sections, including our Town Diaries and Message Boards and         
E-commerce features that we are beginning to introduce, permit users to enter   
and edit information about local events, exchange messages and make certain     
purchases.                                                                      

We believe that business, governmental agency, and not-for-profit       
subscribers can use TownPages to reach audiences targeted topically and         
geographically on a more cost-effective basis than through traditional printed  
advertising media. Our Internet-based systems and computer processing           
capabilities permit quick updating and expansion of customers' displays and Web 
sites, and rapid data collection, monitoring, and processing.                   

During the past 30 months, we tested the TownPages Web site, the        
effectiveness of our touch-screen kiosks and our business plan to sell          
advertisements and use local content to attract                                 

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users to TownPages in a small town and a small city in the United Kingdom. We   
intend to expand the TownPages database to cover, and install approximately     
3,450 touch-screen public information point kiosks in, substantially all of the 
major towns and cities in the United Kingdom during a three year national       
roll-out of TownPages.                                                          

REVENUE SOURCES.  We list certain basic contact information for local   
governments and businesses free of charge. We charge subscribing advertisers for
more extensive listings and related services, including designing, producing and
maintaining Web sites and content on TownPages. Most of our enhanced format     
services are sold under one year contracts. Banner display space is currently   
sold for three month periods. We plan to expand our revenue sources as our      
TownPages service, and use of the Internet itself, continue to expand and       
change.                                                                         

   OPERATIONS TO DATE.  As of the date of this prospectus, we have eight touch
screen kiosks in operation. From the commencement of our business in November   
1995 through June 1998, we only had aggregate revenues of L25,620 ($42,601) and 
incurred L1,110,214 ($1,846,064) in losses during that period. Our revenues have
increased since commercial operations commenced in the late spring of 1998.     
Revenues for the third and fourth quarters of 1998 were L28,548 ($47,470) and   
L1,080,519 ($1,796,687), respectively. We incurred losses of L444,184 ($738,589)
in the third quarter of 1998 and produced profits of L160,777 ($267,340) in the 
fourth quarter. Work in the fourth quarter of 1998 on Web design contracts for  
four customers accounted for approximately 96% of our 1998 net revenues.        

OUR STRATEGY                                                                    

  We aim to make TownPages the United Kingdom's premier branded free use and
paid advertising, locally-focused information provider on the Internet by:      

- LEVERAGING OUR MODEL TO ROLL OUT THE TOWNPAGES SERVICE.               

  - INSTALLING APPROXIMATELY 3,450 TOWNPAGES TOUCH-SCREEN PUBLIC INFORMATION
POINT KIOSKS DURING THE NATIONAL ROLL-OUT IN THE UNITED KINGDOM.    

- ENTERING INTO EXCLUSIVE INFORMATION SERVICE ARRANGEMENTS WITH LOCAL   
GOVERNMENTS IN THE UNITED KINGDOM TO OBTAIN LOCALLY-FOCUSED CONTENT.

- EXPANDING STRATEGIC PARTNERSHIPS WITH INFORMATION PROVIDERS.          

- CONTINUING TO BUILD STRATEGIC RELATIONSHIPS WITH OTHER BUSINESSES.    

- PURSUING ADDITIONAL REVENUE-GENERATING ACTIVITIES, INCLUDING EXPANDED 
FOCUS ON E-COMMERCE.                                                

- CONTINUALLY ENHANCING TOWNPAGES' FUNCTIONALITY AND PERFORMANCE.       

CORPORATE BACKGROUND                                                            

Our wholly-owned subsidiary, Town Pages Limited, was incorporated and   
started operations in 1995 as an English corporation. Town Pages Holdings plc   
was incorporated in July 1998 as an English corporation, and acquired all of the
shares of Town Pages Limited on December 15, 1998. We changed our name to       
TownPagesNet.com plc in April 1999 and all references to TownPagesNet.com plc   
inlcude the operations of Town Pages Holdings plc. We changed the name of Town  
Pages Limited to Town Pages UK Limited in April 1999 and all references to Town 
Pages UK Limited include the operations of Town Pages Limited. Our principal    
executive offices are at 11 Market Square, Alton, Hampshire GU34 1HD, United    
Kingdom, telephone: 011-44-1420-543-468; facsimile: 011-44-1420-541-322.        

USE OF PROCEEDS                                                                 

We intend to use the net proceeds of this offering:                     

- to roll out the TownPages service across the United Kingdom,          

- to retire indebtedness, and                                           

- for general corporate purposes.                                       

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RISK FACTORS                                                                    

 An investment in the securities we are offering involves a high degree of
risk. Prospective investors should carefully review the section entitled "Risk  
Factors" as well as other information provided in this prospectus.              

THE OFFERING

                                                        [Enlarge/Download Table]
                                                                                           
ADSs offered by us........................... 2,200,000 ADSs, representing 2,200,000       
                                              ordinary shares.                             

Ordinary shares to be outstanding after the                                                
  offering................................... 7,200,000 ordinary shares.                   

Voting Rights................................ Holders of American depositary receipts      
                                              representing the ADSs, acting through Bankers
                                              Trust Company, are entitled to the same      
                                              voting rights as holders of ordinary shares. 

Dividends.................................... The ordinary shares represented by the ADSs  
                                              will be eligible for any dividend declared in
                                              respect of any period subsequent to the      
                                              closing of this offering. No dividends will  
                                              be paid for the foreseeable future.          

American Stock Exchange Symbol............... "TPN" for the ADSs.                          

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

EXCEPT AS NOTED, ALL OF THE INFORMATION IN THIS PROSPECTUS ASSUMES THAT 
NEITHER THE WARRANTS TO BE ISSUED TO THE REPRESENTATIVE OF THE UNDERWRITERS OR  
THE UNDERWRITERS' OVER-ALLOTMENT OPTION ARE EXERCISED, AND DOES NOT REFLECT THE 
ISSUANCE OF ANY OF OUR 700,000 ORDINARY SHARES AVAILABLE FOR FUTURE GRANTS OF   
OPTIONS UNDER OUR EXECUTIVE SHARE OPTION PLAN, INCLUDING OPTIONS COVERING       
190,000 ORDINARY SHARES WHICH WE PLAN TO ISSUE TO CERTAIN DIRECTORS, OFFICERS,  
AND EMPLOYEES EFFECTIVE AS OF THE COMMENCEMENT OF THIS OFFERING.                

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

  This prospectus contains forward-looking statements. These forward-looking
statements are not historical facts, but rather are based on our current        
expectations, estimates and projections about our industry, our beliefs and     
assumptions. Words including "may," "could," "would," "will," "anticipates,"    
"expects," "intends," "plans," "projects," "believes," "seeks," "estimates" and 
similar expressions are intended to identify forward-looking statements. These  
statements are not guarantees of future performance and are subject to certain  
risks, uncertainties and other factors, some of which are beyond our control,   
are difficult to predict and could cause actual results to differ materially    
from those expressed or forecasted in the forward-looking statements. These     
risks and uncertainties are described in "Risk Factors" and elsewhere in this   
prospectus. We caution you not to place undue reliance on these forward-looking 
statements, which reflect our management's view only as of the date of this     
prospectus. We are not obligated to update these statements or publicly release 
the result of any                                                               

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revisions to them to reflect events or circumstances after the date of this     
prospectus or to reflect the occurrence of unanticipated events.                

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

ACQUISITION OF TOWN PAGES UK LIMITED

TownPagesNet.com plc was incorporated on July 31, 1998 as Town Pages    
Holdings plc. We acquired all of the share capital of Town Pages UK Limited     
(formerly known as Town Pages Limited) on December 15, 1998. In that            
transaction, we exchanged approximately 66.208 of our ordinary shares for each  
ordinary share owned by a shareholder of Town Pages UK Limited. TownPagesNet.com
plc conducted no operations prior to that acquisition transaction.              
TownPagesNet.com plc has no material assets or liabilities other than our       
ownership interest in Town Pages UK Limited. Consequently, all references in    
this prospectus to operations and financial condition for all fiscal periods    
prior to that date are to the operations and financial condition of Town Pages  
UK Limited. Town Pages UK Limited had virtually no operations, revenues, or     
expenses during the period from November 5, 1995 through December 31, 1995.     

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

REPORTS AND FILINGS TO BE MADE BY US

   We have agreed to furnish or make available to our shareholders and to file
with the Commission reports on the forms under the Exchange Act required to be  
filed by foreign issuers. In accordance with the requirements of the Exchange   
Act, we will file an annual report on Form 20-F and other information under     
cover of Form 6-K with the Commission. We have also agreed to furnish or make   
available to our shareholders and file with the Commission reports that are     
substantially similar in form, content and frequency as the reports that we     
would be required to file if we were a United States corporation filing reports 
under the Exchange Act, including reports similar to those filed on Form 10-Q   
Quarterly Reports and Form 8-K Periodic Reports. We have agreed to furnish      
copies of these reports to Bankers Trust Company promptly after they have been  
filed with the Commission. Our financial statements included in those reports   
will be prepared in accordance with United States generally accepted accounting 
principles, will express all amounts in British pounds sterling and will also   
indicate the appropriate amounts in United States dollars in accordance with the
rules of the Commission. As a foreign private issuer we are exempt from the     
rules under the Exchange Act prescribing the furnishing and content of proxy    
statements and prohibiting short-swing trading by, and requiring certain share  
ownership reporting by, directors, officers, and 10% shareholders.              

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SUMMARY FINANCIAL DATA

   The data below has been prepared in accordance with United States generally
accepted accounting principles except as noted in the next sentence, and is     
derived from the consolidated financial statements and the notes thereto        
appearing elsewhere in this prospectus, audited by Ernst & Young, independent   
auditors. For your convenience, certain pounds sterling amounts have been       
translated into U.S. dollar amounts at the December 31, 1998 noon buying rate in
New York City for cable transfers. See "Exchange Rate Information." Pro forma   
summary financial data has been adjusted to give effect to the conversion of    
L850,000 ($1,413,380) of our indebtedness to affiliates into Series A preferred 
shares. See "Related Party Transactions." Pro forma as adjusted summary balance 
sheet data has been adjusted to give effect to the sale by us of 2,200,000 ADSs 
at the initial public offering price of L6.01 ($10.00) per ADS.                 

                                                        [Enlarge/Download Table]

                                                                        YEARS ENDED DECEMBER 31,                 
                                                        -------------------------------------------------------- 
                                                             1996          1997          1998          1998      
                                                        --------------  -----------  ------------  ------------- 
                                                               AMOUNTS IN POUNDS STERLING           AMOUNTS IN   
                                                                                                   U.S. DOLLARS  
                                                                                                                 
SUMMARY OF OPERATIONS DATA                                                                                       
Revenues...............................................      L  6,225      L  8,359    L1,120,103  $   1,862,507 
Gross profit/(loss)....................................       (15,525)      (35,422)      376,473        625,999 
Operating expenses.....................................       149,809       293,655     1,176,733      1,956,671 
Net loss...............................................     L(166,909)    L(346,564)   L (872,096) $  (1,450,121)
Basic and diluted net loss per ordinary share..........     L   (0.10)    L   (0.07)    L   (0.17) $       (0.29)
                                                        --------------  -----------  ------------  ------------- 
                                                        --------------  -----------  ------------  ------------- 
Shares used in computing basic and diluted net                                                                   
  loss per ordinary share..............................     1,672,225     5,000,000     5,000,000      5,000,000 
                                                        --------------  -----------  ------------  ------------- 
                                                        --------------  -----------  ------------  ------------- 

                                                        [Enlarge/Download Table]

                                                                   DECEMBER 31, 1998                                   
                                 --------------------------------------------------------------------------------------
                                                                                                                       
                                            ACTUAL                     PRO FORMA              PRO FORMA AS ADJUSTED    
                                 ----------------------------  --------------------------  ----------------------------
                                                      $                           $                             $      
                                       L                            L                            L                     
Balance sheet data:                                                                                                    
Working capital................    L(1,345,949) $  (2,238,044)    L(495,949) $   (824,664)   L10,617,834  $  17,655,334
Total assets...................      1,631,931      2,713,575     1,631,931     2,713,575     11,807,321     19,633,213
Deferred revenue...............        228,244        379,524       228,244       379,524        228,244        379,524
Debenture loan.................      1,682,190      2,797,146       832,190     1,383,766       --             --      
Total stockholder's equity (net                                                                                        
  capital deficiency)..........    L(1,221,121) $  (2,030,480)    L(371,121) $   (617,100)   L10,742,662  $  17,862,899

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RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING A 
DECISION TO INVEST IN US. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR     
BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY      
ADVERSELY AFFECTED. IF THAT HAPPENS, THE TRADING PRICE OF OUR ADSS COULD        
DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THIS PROSPECTUS       
CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR   
ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE            
FORWARD-LOOKING STATEMENTS AS A RESULT OF MANY FACTORS, INCLUDING THE RISKS     
FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS PROSPECTUS.                   

WE HAVE A SHORT OPERATING HISTORY                                               

We commenced our business in November 1995 but conducted no meaningful  
operations until 1996 and only conducted experimental prototype operations from 
that date until the Spring of 1998. Accordingly, we have a limited operating    
history upon which you can evaluate our business and prospects. Our historical  
data is of limited value in projecting future operating results. You must       
consider our business in light of the risks, expenses and problems frequently   
encountered by companies with a limited operating history.                      

WE HAVE INCURRED NET LOSSES SINCE COMMENCING BUSINESS AND EXPECT FUTURE LOSSES  

We have had limited revenues to date. We have not shown a profit in our 
annual operations to date. We have incurred accumulated net losses since        
inception through December 31, 1998 of approximately L1.4 million ($2.3         
million). We had an accumulated stockholders' deficit of approximately L1.2     
million ($2.0 million) at December 31, 1998. Since we intend to continue to     
heavily invest in personnel, brand promotion, infrastructure and expansion into 
additional markets, we expect significant additional net losses to continue on  
an annual and quarterly basis until at least late in the year 2000. Our sales   
may not continue to grow, we may never achieve profitability and, if we do      
achieve profitability, we may not be able to maintain profitability.            

OUR FUTURE REVENUES ARE UNPREDICTABLE AND OUR FINANCIAL RESULTS MAY FLUCTUATE   

Our historical financial data is not reliable as a basis upon which to  
predict our future revenues or operating expenses for a number of reasons,      
including our limited operating history, the emerging nature of our Internet    
industry category, and our growth strategy. Our financial results may fluctuate 
significantly because of several factors, many of which are beyond our control. 
These factors include:                                                          

- specific economic conditions relating to the Internet,                

- usage of the Internet,                                                

- demand for advertising on our Web site and demand for Internet-based  
advertising in general,                                             

   - changes in advertising rates as a result of competition or other factors,

- seasonal trends in advertising,                                       

- the advertising budgets of our existing and potential customers,      

- demand for enhanced listing services on our Web site,                 

   - changes in our distribution relationships with Internet service providers
or other third parties,                                             

- demand for our services,                                              

- incurrence of costs relating to acquisitions of businesses or         
technologies,                                                       

   - incurrence of other charges in connection with the services offered by us
and our competitors,                                                

- introduction of enhanced services by us or our competitors,           

- market acceptance of new services,                                    

  - delays in the introduction of services or enhancements provided by us or
our competitors,                                                    

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- changes in our pricing policies or those of our competitors,          

    - capacity constraints, dependencies on Internet/telecommunications/computer
infra-structure, and related technical difficulties, downtimes, or  
"Internet brownouts," and                                           

- general economic conditions.                                          

    The relatively new industry in which we are engaged has not been tested in a
recessionary economic environment where budget constraints and contraction in   
income available for discretionary purchases could reduce the use of our        
services.                                                                       

WE MAY NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE                           

   We had a working capital deficit of L1,345,949 ($2,238,044) at December 31,
1998. We will depend upon the net proceeds of this offering, revenues from      
operations, and borrowings under a credit facility which we will seek to        
establish upon completion of this offering, to meet our capital expenditure     
requirements and fund continued losses during our projected three year United   
Kingdom roll out. There is no assurance that we will achieve projected revenues,
that bank borrowings will be available to us on commercially attractive terms or
at all, or that the costs actually incurred to expand TownPages over the next   
three years will not exceed our budget. Also, if we elect to expand our         
operations outside the United Kingdom or to add services or other capabilities  
not presently contemplated in our three year plan, either alone or with a       
strategic partner, the net proceeds from this offering, revenues from operations
and any available bank borrowings may be insufficient to meet our capital       
requirements for that expansion. If additional funds were to be required for any
of those reasons, we would be unable to complete our expansion as planned and   
our business and financial condition would be seriously adversely affected if we
were unable to raise additional funds on acceptable terms, in timely fashion, or
at all. There is no assurance that any additional financing will be available on
commercially attractive terms, in timely fashion, in sufficient amounts, or at  
all.                                                                            

  If we raise additional funds through the issuance of equity or convertible
debt securities, the percentage ownership of TownPagesNet.com plc held by       
existing shareholders, including holders of our ADSs, will be reduced and those 
shareholders may experience significant dilution. In addition, new securities   
may contain certain rights, preferences or privileges that are senior to those  
of our ordinary shares and ADSs. See "Use of Proceeds" and "Management's        
Discussion and Analysis of Financial Condition and Results of Operations."      

OUR BUSINESS IS INCREASINGLY COMPETITIVE                                        

    The markets for local interactive content and services are highly fragmented
and intensely competitive. There are relatively low barriers to entry so we     
expect competition to intensify. We compete on the Internet with Internet       
service providers, online service providers, search engine and other site       
aggregation companies, services that sponsor communities of personal Web sites, 
and various Web site operators and content providers. We also compete with more 
traditional advertising media, such as print, radio, and television media, for a
share of advertisers' total advertising budgets.                                

UNITED KINGDOM COMPETITORS COULD DUPLICATE OUR STRATEGY AND REDUCE ITS          
EFFECTIVENESS                                                               

  United Kingdom-based companies, such as British Telecommunications plc (BT
Touchpoint), KDM International plc (County Web), Freepages plc (Scoot), Thomson 
Directories Ltd. (ThomWeb), Yellow Pages, a division of British                 
Telecommunications plc (Yell), and Time Out Group Ltd. (TimeOut.com) all offer  
services in the United Kingdom that offer some of the features of TownPages.    
British Telecommunications completed a test program in mid-1998 of approximately
200 touch-screen kiosks offering the BT Touchpoint service. A competing kiosk   
program could dilute our sales and the marketing effectiveness of the kiosks    
which are a central part of our own strategy. Other non-United Kingdom-based    
companies                                                                       

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could enter the market and duplicate our strategy as well.                      

MANY ACTUAL AND POTENTIAL COMPETITORS HAVE STRONG BRAND NAMES OR GREATER        
RESOURCES THAN US                                                           

Many of our current and potential competitors have substantially greater
human and financial resources, experience, and brand name recognition than us.  
These companies may have significant competitive advantages through other lines 
of business and existing business relationships.                                

Some U.K.-based companies, such as British Telecommunications, have     
substantially greater resources than we do. Some U.K.-based services, such as   
ThomWeb, Yell, and TimeOut.com, have strong brand name recognition with which to
compete against us.                                                             

    World-wide, there are services presently focused on countries other than the
United Kingdom whose high brand recognition and financial and other resources   
far in excess of our own could make them serious competitive threats in the     
future. Digital City, operated by Digital City, Inc., a company wholly-owned by 
America Online, Inc. and Tribune Company, Sidewalk, operated by Microsoft       
Corporation, Zip 2, operated by Zip2 Corporation, CitySearch, operated by       
Ticketmaster Online-CitySearch, and Around Town operated by WebTV Networks,     
Inc., which is owned by Microsoft Corporation, all fall into that category.     

   Services including GeoCities, TheGlobe.com, and Xoom sponsor communities of
personal Web sites which also seek to create topically or geographically        
segregated online audiences for advertisers. GeoCities, recently opened an      
office in London, England. Search engine and other site aggregation companies   
such as Excite, Inc., which operates City.Net, Lycos, Inc., which operates Lycos
City Guide, and Yahoo! Inc., which operates Yahoo! Local, primarily aggregate   
links to sites providing local content, but are also potential competitors, as  
shown by Yahoo! Inc.'s announcement of an agreement to acquire GeoCities.       

WE MUST EXPAND QUICKLY OR COMPETITORS MAY COPY OR BLOCK OUR STRATEGY            

We believe that we must rapidly establish the TownPages service as the  
premier branded free use and paid advertising, locally-focused information      
provider on the Internet in the United Kingdom in order to attract the maximum  
amount of traffic to our Web site and increase our customer base. If we fail to 
do so, competitors may copy our business strategy or take other steps to prevent
us from obtaining a leading market share in those markets and adversely affect  
our business. Therefore, we intend to deploy significant resources and pursue an
aggressive brand marketing and growth strategy and roll out the TownPages       
service to cover every major town and city in the United Kingdom during the     
three years following completion of this offering.                              

WE HAVE NOT OPERATED TOWNPAGES ON A BROAD SCALE AND WE DO NOT HAVE EXPERIENCE IN
MANAGING RAPID GROWTH                                                       

To date, we have only introduced TownPages into Alton and Winchester, a 
small town and a small city near London, England. There is no assurance that we 
will successfully manage the planned launch of TownPages in additional markets  
in a cost-effective or timely manner while maintaining high levels of service   
and reliability necessary to establish and maintain a reputation for quality.   

THE PLANNED EXPANSION OF TOWNPAGES WILL STRAIN OUR RESOURCES                    

   The pursuit of our business strategy will place a significant strain on our
managerial, operational and financial resources. We will need to improve our    
financial and management controls, reporting systems and procedures. We will    
also have to expand, train and manage our work force for marketing, sales and   
technical support, product development, site design, and network and equipment  
repair and maintenance, and manage multiple relationships with various          
customers, strategic partners and other third parties. We will need to          
continually expand and upgrade our technology infrastructure and systems and    
ensure continued high levels of                                                 

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service, speedy operation, and reliability. In addition, we will have to improve
our methods for measuring the performance and commercial success of our         
different products to better respond to advertiser demands for information on   
product effectiveness and to better determine which products and services can be
developed most profitably.                                                      

  To achieve our objectives, we may have to acquire technologies or products
or enter into strategic alliances and acquisitions, although we have no plans or
agreements to do so at the present time. For those initiatives to succeed, we   
must make our existing technology, business, and systems work effectively with  
those of our strategic partners and any acquired properties without undue       
expense, distraction of management from other priorities or other disruptions to
our existing business.                                                          

OUR BRAND AND REPUTATION WILL BE DAMAGED IF WE FAIL TO SUCCESSFULLY MANAGE OUR  
PLANNED EXPANSION                                                           

  If our service, or any new feature, is not received favorably, whether due
to any shortcoming in our product or operations or factors beyond our control,  
our reputation and the TownPages brand will be damaged. Our business, financial 
condition, and results of operations will be materially adversely affected if we
fail to manage growth challenges successfully.                                  

WE MUST TAKE THE RISK OF INTRODUCING NEW SERVICES IN ORDER TO COMPETE           

We plan to introduce new and expanded services, including E-commerce    
services, on TownPages in order to generate additional revenues, attract more   
consumers and respond to competition. There can be no assurance that we will be 
able to offer any new services in a cost-effective or timely manner or that any 
efforts will be successful. Furthermore, any new service we launch that is not  
favorably received by consumers could damage our reputation or our brand name.  
Expansion of our services in this manner will also require significant          
additional expenses and development and may strain our management, financial and
operational resources. Our inability to generate revenues from expanded services
sufficient to offset their cost could have a material adverse effect on our     
business, financial condition and results of operations.                        

ESTABLISHING AND MAINTAINING OUR BRAND RECOGNITION AND REPUTATION ARE ESSENTIAL 
TO OUR SUCCESS                                                              

   We believe that our success will depend to a large degree on our ability to
successfully establish and maintain our brand recognition and reputation. In    
order to maintain a good reputation and strong brand name, we will need to      
invest heavily in our marketing and maintain high standards for actual and      
perceived quality, usefulness, reliability, security and ease of use of our     
services. Even if we continue to provide good service to our customers, factors 
outside of our control, including actions by organizations that are mistaken for
us, could affect our brand and the perceived quality of our services, thereby   
damaging our business.                                                          

WE RELY UPON THIRD PARTIES FOR EQUIPMENT AND FOR KIOSK MANUFACTURE, ASSEMBLY,   
INSTALLATION, MAINTENANCE AND REPAIR                                        

    Although our computer and network hardware and our kiosks are assembled from
standard components which may be outsourced from a number of manufacturers and  
distributors, we have no equipment manufacturing capacity and will be dependent 
upon the timely delivery of quality equipment by those manufacturers and        
distributors. Furthermore, our kiosk assembly and installation capacity, and our
equipment and kiosk maintenance and repair capacity, is quite limited. We will  
be dependent upon third party services for the timely, cost-effective, and      
proper installation, maintenance, and repair of our touch-screen kiosks and for 
the maintenance and repair of our equipment and network infrastructure. Failure 
by any of these third parties to perform as we require could materially         
adversely affect our business, operations, and financial condition.             

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KEVIN R. LEECH CONTROLS US                                                      

After we complete this offering, a corporation wholly-owned by Kevin R. 
Leech, one of our directors, will beneficially own 62.50% of our outstanding    
ordinary shares. Accordingly, Mr. Leech will control us and will have the       
ability to elect and/or remove all of the members of our board of directors and 
to approve significant corporate transactions, including key mergers and        
acquisitions and subsequent financing transactions. He will also have the       
ability to delay or prevent a change in our control and to discourage a         
potential acquiror of us or our shares.                                         

KEVIN R. LEECH, A DIRECTOR AND OUR PRINCIPAL STOCKHOLDER, WILL RECEIVE CERTAIN  
BENEFITS FROM THIS OFFERING AND MAY HAVE CONTINUING CONFLICTS OF INTEREST   

  Mr. Leech is a director and principal shareholder of other high-technology
companies, including topjobs.net plc. He is a 25% shareholder of Leisure        
Concepts International, which owns 50% of Travel the Net Ltd., currently one of 
our largest customers and the exclusive provider of the travel "channel" on     
TownPages. While we do not believe that those companies represent a competitive 
threat to us now or in the foreseeable future, it is possible that they may be  
competitors at some future date, or that conflicts of interest may arise from   
those relationships.                                                            

   Upon completion of this offering, a corporate affiliate wholly-owned by Mr.
Leech will convert L850,000 ($1,413,380) owed to it by Town Pages UK Limited    
into 850,000 of our Series A preferred shares, which will have priority over our
ordinary shares with respect to dividend and liquidation rights and are         
convertible into ordinary shares at 120% of the initial public offering price   
per ADS, commencing one year from the completion of this offering. Upon         
completion of this offering, the balance of the indebtedness owed to that       
corporate affiliate, presently anticipated to be approximately L1,047,000       
($1,741,000) will be repaid from the net proceeds of this offering. See "Related
Party Transactions."                                                            

CERTAIN OTHER EXECUTIVE OFFICERS WORK FOR OTHER COMPANIES AND MAY HAVE CONFLICTS
OF INTEREST                                                                 

 Mr. Andrew Neville Lyndon-Skeggs, our President and Managing Director, is
the founder, Managing Director, and the beneficial owner of all of the shares of
Westbrook Property Developments Ltd., which has assigned the lease for our      
executive offices to our operating subsidiary. See "Related Party Transactions."
Mr. Lyndon-Skeggs' responsibilities with regard to that company could           
potentially prevent him from working full-time as our President and Managing    
Director, although that has not occurred to date and we do not expect that to   
occur in the future. Westbrook Property Developments Ltd. is not one of our     
competitors nor is it expected to be a competitor at any time in the foreseeable
future.                                                                         

Mr. Richard J. Smith, our interim Chief Financial Officer, devotes the  
greater part of his time to his duties as the Finance Director for Kevin R.     
Leech's portfolio of investments, rather than to duties as our Chief Financial  
Officer. Although we believe that Mr. Smith is devoting sufficient time to the  
duties presently required of him as our Chief Financial Officer, we are         
currently engaged in a search for a full-time Chief Financial Officer, to be    
engaged as soon as possible after the completion of this offering. However,     
there is no assurance that we will be successful in replacing Mr. Smith in that 
position quickly or at all. Mr. Smith's role as Finance Director for Mr. Leech's
portfolio of investments could result in a conflict of interest at some time,   
but we do not currently anticipate that any material conflict of interest will  
occur in the foreseeable future.                                                

    Mr. Barry B. J. Charles, our Vice President, devotes the greater part of his
time to various projects as a consultant and to his personal investments, rather
than to duties as our Vice President. Mr. Charles' other interests could result 
in a conflict of interest at some time, but we are not aware of any situation in
which he is presently involved which is likely to constitute a conflict of      
interest in the foreseeable future.                                             

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WE CURRENTLY DEPEND ON A SMALL NUMBER OF CUSTOMERS FOR A LARGE PORTION OF OUR   
REVENUES                                                                    

   A total of L1,079,264 ($1,794,600), or approximately 96%, of the L1,120,103
($1,862,507) revenues we earned in our fiscal year ended December 31, 1998, was 
earned for Web site design services under a total of four contracts with four   
customers. Our work for Travel the Net Ltd., All-Cars.com Ltd., Location        
Developments Limited, and Medic Media Inc. accounted for approximately 14%, 19%,
33%, and 30%, respectively, of our revenues. Our business and financial         
condition would be materially adversely affected if we do not obtain substantial
additional business from those customers, or if we lose the business of any of  
those customers, and if we fail to obtain substantial additional business from  
other customers.                                                                

    WE CURRENTLY DEPEND ON TWO SUBCONTRACTORS TO PERFORM A SUBSTANTIAL AMOUNT OF
THE SERVICES UNDER THE FOUR WEB SITE DESIGN CONTRACTS THAT CURRENTLY ACCOUNT FOR
A LARGE PORTION OF OUR REVENUES                                                 

   If the subcontractors who are performing a substantial part of the four Web
site design contracts that currently account for a large portion of our revenues
be unable or unwilling to perform their obligations under the subcontract       
agreements, our business and financial condition could be materially adversely  
affected.                                                                       

WE MAY NOT BE ABLE TO SUCCESSFULLY PROTECT OUR PROPRIETARY RIGHTS               

    Our success and ability to compete is dependent in part on the protection of
our original content for the Internet and on the goodwill associated with our   
trademarks, trade names and trade secrets. A substantial amount of uncertainty  
exists concerning the application of copyright laws to the Internet, and there  
can be no assurance that existing laws will provide adequate protection for our 
original content. In addition, because copyright laws do not prohibit           
independent development of similar content, there can be no assurance that      
copyright laws will provide us with any competitive advantage.                  

  We will rely on trade secret and copyright laws to protect the proprietary
technologies, primarily in the form of software, that we may develop in the     
future to manage and improve our Web site and advertising services, but there   
can be no assurance that those laws will provide sufficient protection to us,   
that others will not develop technologies that are similar or superior to ours, 
or that third parties will not copy or otherwise obtain and use our technologies
without authorization.                                                          

Policing unauthorized use of our proprietary technology and other       
intellectual property rights could entail significant expense and could be      
difficult or impossible, particularly given the global nature of the Internet   
and the fact that the laws of other countries may afford us little or no        
effective protection of our intellectual property.                              

   In addition, we rely on certain technology licensed from third parties, and
may be required to license additional technology in the future. There can be no 
assurance that these third-party technology licenses will be available or will  
continue to be available to us on acceptable commercial terms or at all. If we  
are unable to enter into and maintain any of these technology licenses, it could
damage our business.                                                            

OTHER COMPANIES MAY CLAIM WE ARE INFRINGING UPON THEIR PROPRIETARY TECHNOLOGY   

Given the nature of our business, we can not give assurance that third  
parties will not bring claims of copyright or trademark infringement against us 
or claim that our use of certain technologies violates a patent. Further, there 
can be no assurance that third parties will not claim that we have              
misappropriated their creative ideas or formats or otherwise infringed on their 
proprietary rights in connection with our Internet content. We are not aware of 
any claims. Any claims of infringement, with or without merit, could be time    
consuming to defend, result in costly litigation, divert management attention,  
require us to enter into costly royalty or licensing arrangements or prevent us 
from using important technologies or methods, any of which could damage our     
business and financial condition.                                               

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WE NEED TO CONTINUALLY OBTAIN OR DEVELOP AND DISPLAY USEFUL CONTENT IN AN       
ATTRACTIVE FASHION TO ATTRACT USERS AND ADVERTISERS                         

Our success depends in part upon our ability to deliver interactive,    
locally-focused content in order to attract consumers with demographic          
characteristics valuable to our customers. Rapidly changing technology, emerging
industry standards and consumer requirements that are subject to rapid change   
and frequent new service introductions characterize the markets for our         
services. These characteristics are exacerbated by the emerging nature of the   
local interactive content and service market and the expectation that many      
companies may introduce new Internet products and services addressing this      
market in the near future. There can be no assurance that we will be successful 
in obtaining or developing and providing new content and services or enhancing  
our existing local information services on a timely basis, or that our content  
and services will effectively address requirements of consumers or our customers
or achieve market acceptance.                                                   

WE MAY BE HELD LIABLE FOR ONLINE CONTENT PROVIDED BY THIRD PARTIES              

We may face potential liability for defamation, negligence, copyright,  
patent or trademark infringement and other claims based on the nature and       
content of the materials that appear on TownPages. Claims of this type have been
brought, and sometimes successfully pressed, against online services. Although  
we carry general liability insurance, our insurance may not cover all claims or 
may not be adequate to indemnify us for any liability that may be imposed. Any  
imposition of liability, particularly liability that is not covered by insurance
or is in excess of our insurance coverage, could have a material adverse effect 
on our reputation, business, financial condition and results of operations.     

USERS MAY CONFUSE OTHER COMPANIES' DOMAIN NAMES WITH OUR OWN                    

We have registered with the InterNIC registration service, the Internet 
domain names: www.townpagesnet.com, www.townpages.co.uk, www.townpages.org,     
www.townpagesplc.com, www.townpagesus.com, www.townpagesuk.com, and             
www.townpageseu.com. However, there are other substantially similar domain names
which are registered by companies which may compete with us. In addition, new   
domains may be added in the future, allowing combinations and similar domain    
names that may be confusingly similar to our own. There can be no assurance that
potential users and advertisers will not confuse our domain name with other     
similar domain names. If that confusion occurs,                                 

- we may lose business to a competitor, and                             

- have to adjust our advertising rates and service fees accordingly, or 

- some users of our services may have negative experiences with other   
    companies on their Web sites that those users erroneously associate with
us. See "Business--Intellectual Property."                          

OUR BUSINESS DEPENDS ON ACCEPTANCE OF THE INTERNET AS AN EFFECTIVE ADVERTISING  
MEDIUM AND COMMUNICATIONS AND INFORMATION SEARCH TOOL                       

The Internet is still a relatively new medium for advertising,          
communications, and information search and retrieval. Advertisers may not agree 
with our view that Internet advertising can be an effective means for satisfying
their needs. We may be unable to persuade a large enough number of consumers and
advertisers that our service satisfies their needs and does so better than      
traditional methods for advertising, communications, or information search and  
retrieval, or other Internet providers. Use of the Internet by consumers and    
advertisers would be hindered if the reliability, speed, security, and ease in  
use of the Internet and increased access to the Internet, through personal      
computers or otherwise, does not continue to improve. Also, as consumers and    
potential customers develop an awareness of how best to use the Internet, they  
may find that our Web site and services do not satisfy their demands. If that   
happens, we may be unable to adapt our services to meet those demands.          
Furthermore, potential customers may not agree on standards for determining how 
to measure the effectiveness of                                                 

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Internet advertising, or whether it is more effective than traditional          
advertising methods.                                                            

OUR BUSINESS COULD BE HARMED BY ACTUAL OR THREATENED PENETRATION OF OUR NETWORK 
SECURITY                                                                    

Although we are not aware of any attempts by programmers or "hackers" to
penetrate our network security, there can be no assurance that those actions    
will not occur in the future. A party who is able to penetrate our network      
security could misappropriate proprietary information or cause interruptions in 
the operation of TownPages, which could have a material adverse effect on our   
business, financial condition and results of operations. We may be required to  
expend significant capital and resources to protect against the threat of       
security breaches or to alleviate problems caused by security breaches. Concerns
over the security of Internet transactions and the privacy of users may also    
inhibit the growth of the Internet, particularly as a means of conducting       
commercial transactions. Security breaches or the inadvertent transmission of   
computer viruses could expose us to a risk of loss or litigation and possible   
liability. We do not have "errors and omissions" or other insurance coverage    
specifically against losses which might be incurred due to computer viruses or  
product defects. Our business, results of operations, and financial condition   
could be materially adversely effected if contractual provisions attempting to  
limit our liability in these areas are not successful or enforceable, or if     
other parties do not accept these contractual provisions as part of our         
agreements.                                                                     

OUR BUSINESS DEPENDS SPECIFICALLY ON THE INTERNET INFRASTRUCTURE                

  Many of the Internet service providers, online service providers and other
Web site operators on whom we depend have experienced significant service       
slowdowns, malfunctions, outages and capacity limitations. We also depend upon  
the reliability, speed, data capacity, ease of use, accessibility and security  
of the Internet as well as its continued development and acceptance for         
commercial use generally. A satisfactory Internet experience may also depend on 
the proper functioning and the continued development of equipment such as high  
speed modems and personal computers. New protocols or standards have been       
developed to handle new systems and increased level of activity at higher speeds
in compliance with governmental regulations. Not all software and equipment     
protocols and standards are compatible. Users may experience difficulties due to
computer-related, telecommunications, or other equipment, software, or system   
failures or shortcomings unrelated to our services. If users experience these   
difficulties, our reputation could be harmed. Moreover, failure of Internet     
service providers or online service providers to provide access to the Internet 
to our customers and users would prevent them from accessing our Web site, which
could result in reducing the marketability of our services and an eventual loss 
of customers.                                                                   

WE MUST CONSTANTLY ADAPT TO RAPID TECHNOLOGICAL CHANGE                          

Our industry is characterized by rapidly changing technology, evolving  
industry standards, frequent new service and product introductions and          
enhancements, and changing customer demands. Our success will depend, in part,  
on our ability to adapt rapidly to these developments. We must maintain adequate
financial and technical resources to adapt to these changes or our systems and  
technologies could become incompatible or inefficient due to rapidly evolving   
software, computer hardware, and telecommunications standards.                  

OUR BUSINESS WOULD BE HARMED IF SERVICE WAS INTERRUPTED DUE TO HARDWARE,        
SOFTWARE, TELECOMMUNICATIONS OR OTHER BREAKDOWNS                            

Our operations may be interrupted if the computer, computer-related,    
telecommunications, or other equipment and software owned by us or by service   
providers upon whom we depend are damaged or prevented from operating. If we    
experience a temporary or permanent business interruption, whether due to a     
casualty or an operating malfunction, as a result of a move or otherwise, our   
business, operations, and financial condition could be adversely affected. We do
not have any business interruption insurance, and                               

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our property insurance may not cover that type of loss.                         

YEAR 2000 RISK MAY ADVERSELY AFFECT US                                          

  The Year 2000 issue refers to the potential failures that computer systems
may incur as a result of the date change from 1999 to 2000. Virtually every     
computer operation will be affected in some way by the Year 2000 issue. It is   
uncertain what impact the Year 2000 issue will have on the Internet and the Web,
but major disruption is possible. We rely on telecommunications carriers to     
transmit our Internet traffic over local and long distance networks. If their   
networks fail for an extended period of time due to the Year 2000 issue, we will
no longer be able to operate our business, and the resulting inability of users 
of our Web site to fully utilize our services would cause our business to       
suffer.                                                                         

We have assessed the extent to which the Year 2000 issue affects our    
internal systems. Based upon our experience to date, we have commenced a        
program, currently budgeted at approximately L5,000 ($8,300), which we believe  
will correct any problems. However, there can be no assurance that actual costs 
of compliance will not significantly exceed this amount. We are also currently  
assessing the extent to which the Year 2000 issue will affect the systems of    
companies upon which we rely or with which we have strategic relationships. Any 
failure by these companies to resolve any Year 2000 issues on a timely basis, or
in a manner that is compatible with our systems, could significantly damage our 
business and financial condition. Although we expect to incur costs in          
correcting any Year 2000 issues arising as a result of our suppliers' handling  
of their own Year 2000 issues, we cannot currently estimate those costs. See    
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations-- Year 2000."                                                        

WE ARE DEPENDANT ON OUR KEY MANAGEMENT                                          

We depend upon our senior management team, led by Andrew Neville        
Lyndon-Skeggs, to successfully implement our business strategy. If Mr.          
Lyndon-Skeggs or other members of the senior management team become unable or   
unwilling to continue in their present positions, our business and financial    
conditions could be damaged. We do not currently maintain key man life insurance
on any of our officers.                                                         

WE MAY NOT BE ABLE TO ATTRACT AND RETAIN NEEDED TECHNICAL PERSONNEL             

Currently, a large portion of our business involves Web site design,    
development and maintenance and network and kiosk operations, maintenance and   
repair. Our success depends in large part upon our ability to attract, train,   
motivate and retain qualified technical personnel. We may be unable to do so,   
particularly in view of the strong competition for individuals with Internet and
related technical experience.                                                   

WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION                       

  There are currently few laws and regulations directly applicable to access
to or commerce on the Internet. However, due to the increasing popularity and   
use of the Internet, it is possible that a number of laws and regulations may be
adopted, or existing laws or regulations may be applied differently, with       
respect to the Internet, covering issues such as user privacy, pricing and      
quality of services. These laws and regulations could hinder growth in use of   
the Internet generally and decrease the acceptance of the Internet as a         
communications and commercial medium, and could thereby cause our business to   
suffer. In addition, several telecommunications carriers are seeking to have    
telecommunications over the Internet regulated by agencies such as the Federal  
Communications Commission in the United States in the same manner as other      
telecommunications services. The costs of communicating on the Internet could   
increase substantially as a result of this type of regulation in the United     
States, the United Kingdom, or elsewhere, potentially slowing the growth in use 
of the Internet.                                                                

The placement and operation of our external kiosks are also subject to  
various local zoning and similar laws and regulations which                     

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could delay, preclude, or increase the cost of kiosk installation and operation.

WE MAY USE THE OFFERING PROCEEDS IN A MANNER DIFFERENT THAN THE ALLOCATIONS     
INDICATED IN THIS PROSPECTUS                                                

  The proposed allocation of the net proceeds of the offering represents our
best estimate of the expected utilization of funds to finance our activities in 
accordance with our management's current objectives and market conditions. Our  
management and board of directors may actually allocate the funds in            
significantly different proportions depending upon their assessment of our needs
at the time.                                                                    

NEW INVESTORS WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION                     

   The purchasers of our ADSs will incur immediate substantial dilution in net
tangible book value per share from the initial public offering price in the     
amount of L4.52 ($7.52). Additional dilution may occur upon the conversion of   
our Series A preferred shares, which will be issued to an affiliate of our      
controlling shareholder simultaneously with the closing of this offering in     
exchange for about L850,000 ($1,413,380) of debt. You may also be further       
diluted if future stock options to purchase our ordinary shares or ADSs or if   
the warrants to be issued to the underwriters' representative at the closing of 
this offering are exercised. We plan to issue options covering 190,000 of our   
ordinary shares, exercisable at the initial public offering price, to certain   
directors, officers, and employees upon commencement of this offering.          

EXISTING SHAREHOLDERS WILL BENEFIT DISPROPORTIONATELY FROM THIS OFFERING        

    Existing shareholders will benefit if a market for their securities develops
upon completion of this offering. Current stockholders will experience an       
immediate increase in net tangible book value per ordinary share of L1.56 or    
$2.60 per share. The average price per share paid by existing stockholders for  
their ordinary shares is L0.03 ($0.06) per share, meaning that those            
stockholders would have an average unrealized gain of L5.98 ($9.94) per ordinary
share and an aggregate unrealized gain of L29,900,000 ($49,700,000) upon the    
completion of this offering, assuming a L6.01 ($10.00) initial public offering  
price per ADS. See "Dilution."                                                  

In December 1998, certain business associates of Mr. Kevin R. Leech,    
received, indirectly through Wing Capital Limited, immediately exercisable ten  
year options from an affiliate of Mr. Leech to acquire from that affiliate      
200,000 of our ordinary shares at a per share exercise price equal to L0.03     
($0.06) per share. Those business associates would experience the same increase 
in net tangible book value per share, and will realize the same average amount  
of gain as our existing stockholders if they exercise the options immediately   
upon completion of this offering. See "Related Party Transactions."             

THE PRICE OF OUR SECURITIES MAY BE HIGHLY VOLATILE                              

The stock markets generally, and the Internet sector in particular, have
experienced and are likely to continue to experience, significant price and     
volume fluctuations. This could result in sharp decreases in the price of the   
securities we are offering hereby no matter how well or poorly we perform. The  
trading price of our securities could also fluctuate significantly in response  
to fluctuations in quarterly operating results, failures to meet analysts'      
expectations, developments in the Internet industry and our business, and other 
factors.                                                                        

WE DO NOT PLAN TO PAY CASH DIVIDENDS                                            

  We are prohibited from paying cash dividends on our ordinary shares in any
year in which we do not first declare and pay a 9% dividend on our Series A     
preferred shares. In any case, we do not currently intend to pay any cash       
dividends. In addition, if we intended to pay dividends, under English corporate
law dividends are only payable out of distributable reserves, which are         
essentially equivalent to retained earnings. We currently have no distributable 
reserves and we cannot determine at this time if or when we will generate any.  

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A SUBSTANTIAL NUMBER OF OUR ORDINARY SHARES ARE ELIGIBLE FOR FUTURE SALE        

   The market price of our ADSs could drop as a result of sales of substantial
amounts of our ordinary shares or ADSs in the public market following this      
offering or the perception that such sales may occur. These factors could also  
make it more difficult for us to raise funds through future offerings of stock. 

   The 2,200,000 ordinary shares in the form of ADSs that we are offering will
be freely tradable without restriction except for any shares purchased by our   
"affiliates" as defined in Rule 144 under the Securities Act. In addition, if   
the underwriters exercise their over-allotment option in part or in full, up to 
330,000 additional ADSs will be issued and freely tradable, except for ordinary 
shares purchased by our "affiliates."                                           

Our remaining 5,000,000 outstanding ordinary shares are "restricted     
securities" as defined in Rule 144. Those shares may only be resold if there is 
an effective registration statement under the Securities Act covering those     
shares or an exemption from registration under Rule 144 or otherwise is         
available. The holders of all currently outstanding 5,000,000 ordinary shares   
have agreed that they will not sell any ordinary shares without the prior       
consent of the representative of the underwriters for a period of 365 days from 
the effective date. We intend to register all ordinary shares reserved for      
issuance under our stock option plan. Ordinary shares covered by such           
registration will be eligible for resale in the public market, subject to Rule  
144 limitations applicable to "affiliates" and to the lock-up agreements        
described above.                                                                

  Our stock options and warrants are likely to be exercised, if at all, at a
time when we otherwise could obtain a price for the sale of our ordinary shares 
or ADSs that is higher than the exercise price per share of the options or      
warrants. Any such exercise or the possibility of such exercise may impede our  
efforts to obtain additional financing through the sale of additional securities
or make such financing more costly.                                             

PREEMPTIVE RIGHTS MAY NOT BE AVAILABLE TO OUR ADS HOLDERS                       

   Under English corporate law, whenever we issue new shares for cash, subject
to limited exceptions, we must grant to all of our shareholders, including      
holders of our ADSs, preemptive rights to purchase a sufficient number of shares
to maintain their existing ownership percentage. These statutory preemptive     
rights will not apply to our authorized but currently unissued shares for the   
period commencing December 15, 1998 and ending on December 31, 2003, but will   
apply thereafter. In any event, we may not be able to offer preemptive rights to
U.S. holders of ADSs unless an effective registration statement exists under the
Securities Act covering those rights and the underlying shares. We intend to    
evaluate at the time of any rights offering the costs and potential liabilities 
and benefits to us of enabling U.S. holders of ADSs to exercise preemptive      
rights, and then make a decision whether to file such a registration statement. 
If holders of ADSs are unable to exercise preemptive rights because no          
registration statement is filed or effective, Bankers Trust will attempt to sell
the holders' preemptive rights if a viable secondary market exists and a profit 
can be realized after expenses. Bankers Trust would then distribute the net     
proceeds of the sale, net of Bankers Trust's fees and expenses, to the holders  
of the ADSs. The equity interests of the holders of ADSs would be diluted       
proportionately if they are unable to exercise preemptive rights.               

YOU MAY BE SUBJECT TO BOTH UNITED STATES AND UNITED KINGDOM TAXES               

We strongly urge you to consult with your tax advisors concerning the   
consequences of investing in our ADSs. Our ADSs are being offered in the United 
States, but we are organized under the laws of England and Wales. A U.S. holder 
of our ADSs will be treated as the owner of the underlying ordinary shares for  
purposes of U.S. and U.K. tax laws. Therefore, U.S. federal, state and local tax
laws and U.K. tax laws will apply to ownership of our ADSs and the underlying   
ordinary shares. Tax laws of other jurisdictions may also apply.                

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MARKET PRICE OF OUR ADSS MAY BE SUBJECT TO FOREIGN EXCHANGE FLUCTUATIONS        

    Fluctuations in the exchange rate between the British pound sterling and the
U.S. dollar are likely to affect the market price of the ADSs. For example, even
though our financial statements are reported in British pounds sterling, if the 
value of the British pound sterling falls against the U.S. dollar, our earnings 
per share in U.S. dollars would be reduced. This may adversely affect the price 
at which our ADSs trade on U.S. securities markets.                             

UNITED STATES CIVIL LIABILITIES MAY NOT BE ENFORCEABLE AGAINST US               

    All of our directors and executive officers and certain of the experts named
in this prospectus are not residents of the United States and virtually all of  
the assets of these persons and virtually all of our assets are located outside 
the United States. As a result, it may not be possible for you to serve summons 
and complaints within the United States upon these persons. Similarly, it may   
not be possible to enforce in U.S. courts, against these persons or against us, 
judgments of the U.S. courts based upon civil liability provisions of the U.S.  
federal or state securities laws. In addition, it may be difficult for you in   
original suits or in suits for the enforcement of judgments of U.S. courts to   
enforce certain civil liabilities based upon U.S. federal or state securities   
laws in England against us or our directors or executive officers, or our       
experts.                                                                        

UNDER U.K. LAW A VOTE OF 75% OF THE STOCKHOLDERS IS REQUIRED TO APPROVE CERTAIN 
SIGNIFICANT CORPORATE TRANSACTIONS                                          

  Under English law we are required to obtain the vote or consent of holders
of 75% of our outstanding ordinary shares to complete certain significant       
transactions, including a merger with another corporation in some circumstances.
This may make it more difficult for us to complete a merger or sale of our      
company which is deemed beneficial by our board of directors.                   

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EXCHANGE RATE INFORMATION 

The following table sets forth, for the periods indicated, period end,  
average, high, and low exchange rate between British pounds sterling and United 
States dollars based on the noon buying rate (expressed in United States dollars
per pound sterling). These rates are provided solely for your convenience and   
are not necessarily the exchange rates (if any) used by us in the preparation of
the financial statements included elsewhere in this prospectus.                 

                                                        [Enlarge/Download Table]

                                                                       UNITED STATES DOLLARS PER BRITISH POUNDS    
                                                                                       STERLING                    
                                                                   ------------------------------------------------
                                                                                                                   
                                                                                   AVERAGE OF THE                  
                                                                                     NOON BUYING                   
                                                                                     RATE ON THE                   
                                                                                        LAST                       
                                                                      RATE AT      BUSINESS DAY OF                 
CALENDAR YEAR                                                      END OF PERIOD   EACH FULL MONTH    HIGH    LOW  
-----------------------------------------------------------------  -------------   ---------------   ------  ------

1994.............................................................     1.5665           1.5393        1.6368  1.4615

1995.............................................................     1.5535           1.5803        1.6440  1.5302

1996.............................................................     1.7123           1.5733        1.7123  1.4948

1997.............................................................     1.6427           1.6397        1.7035  1.5825

1998.............................................................     1.6628           1.6602        1.7222  1.6144

On December 31, 1998, the noon buying rate was $1.6628 = L1.00          
(consequently, $1.00 = L0.6014 at this rate).                                   

  Fluctuations in the exchange rate between British pounds sterling and U.S.
dollars will affect the U.S. dollar equivalent of the British pounds sterling   
denominated prices of our ordinary shares and, as a result, will affect the     
market prices of the ADSs in the United States.                                 

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USE OF PROCEEDS 

  We estimate that we will receive net proceeds of approximately L11,113,783
($18,480,000) from our sale of the 2,200,000 ADSs offered by this prospectus, at
the initial public offering price of L6.01 ($10.00) per ADS. If the underwriters
fully exercise their over-allotment option, we will receive net proceeds of     
approximately L12,880,081 ($21,417,000). That amount is after deducting         
estimated underwriting discounts and commissions and other fees and expenses    
payable by us.                                                                  

    We expect to use approximately L10,066,783 ($16,739,000) of the net proceeds
to facilitate the roll out of the TownPages service in the United Kingdom and   
related operations over the 12 months following completion of the offering in   
the event we do not generate revenues from operations or obtain bank financing. 
We intend to use approximately L1,047,000 ($1,741,000) of the net proceeds to   
retire indebtedness, unless we refinance our indebtedness upon the completion of
this offering. The balance of the net proceeds, if any, including any amounts   
not used to repay indebtedness, will be used for general corporate purposes.    

   To achieve our expansion and growth plans, we may also use a portion of the
net proceeds to acquire or invest in companies, technologies or expertise       
complementary to our business. From time to time we evaluate potential          
acquisitions of companies, technologies and expertise. We have no agreements for
acquisitions or investments of that nature at this time.                        

   We currently intend to use funds for the expansion of the TownPages service
primarily for the following purposes:                                           

 - hiring and training additional marketing, sales, design, technical, and
administrative personnel;                                           

- purchasing and installing approximately 3,450 touch-screen public     
     information point kiosks in the targeted towns and cities during the next
three years;                                                        

- introducing and incorporating into TownPages additional internal and  
external Web sites offering new information and services;           

- enhancing our server and networking infrastructure; and               

- sales and marketing campaigns.                                        

  The proposed allocation of the net proceeds of the offering represents our
management's best estimate of and current intention concerning the expected use 
of funds to finance our activities in accordance with our management's current  
objectives and market conditions. Our management and board of directors may     
allocate the funds in significantly different proportions depending upon their  
assessment of our needs at the time. Pending use of funds as described above, we
intend to invest the net proceeds in investment-grade, interest-bearing         
securities in the United Kingdom. See "Management's Discussion and Analysis of  
Financial Condition and Results of Operation--Liquidity and Capital Resources." 

Our working capital is currently provided pursuant to a discretionary   
secured operating line of credit for our operating subsidiary, Town Pages UK    
Limited, with Glen Investments Limited. Kevin R. Leech, a member of our board of
directors and the principal beneficial owner of our ordinary shares, is the     
beneficial owner of 100% of the outstanding share capital of Glen Investments   
Limited. Advances under the line of credit bear interest at 9% per annum, are   
payable on demand, and are secured by a first security interest in all assets   
and property of Town Pages UK Limited, our operating subsidiary. At December 31,
1998, Town Pages UK Limited owed approximately L1.8 million ($3.0 million)      
inclusive of interest, under the line of credit. Upon completion of the         
offering, L850,000 ($1,413,380), of the amount outstanding to Glen Investments  
Limited, including interest, will be converted into 850,000 shares of our 9%    
Series A preferred shares. The balance of the outstanding loans and indebtedness
will be repaid from the net proceeds of this offering or will be refinanced. We 
are seeking to establish a                                                      

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new credit facility from a commercial lender effective upon completion of this  
offering of up to L3.0 million ($5.0 million). We contemplate that any new line 
of credit shall be secured by a first security interest in all of our assets and
advances under that line of credit shall be based upon agreed upon percentages  
of our eligible accounts receivable. As of the date of this prospectus, we do   
not have a commitment from any lender for a proposed credit facility. See       
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations--Liquidity and Capital Resources" and "Related Party Transactions."  

Our management believes that the net proceeds of this offering, together
with revenues from current contracts and with borrowings under the contemplated 
credit facility, will be sufficient to meet our projected cash needs through at 
least the next 12 months. Also, our management believes that the net proceeds of
this offering, together with anticipated revenues from our operations and       
borrowings under the contemplated credit facility, will be sufficient to meet   
our projected cash needs through the next 36 months. However, there is no       
assurance that we will achieve projected revenues, that bank borrowings will be 
available to us on commercially attractive terms or at all, or that the costs   
actually incurred to expand TownPages over the next three years will not exceed 
our budget. Also, if we elect to expand our operations outside the United       
Kingdom or to add services or other capabilities not presently contemplated in  
our three year plan, either alone or with a strategic partner, the net proceeds 
from this offering and any available bank borrowings may be insufficient to meet
our capital requirements for that expansion. If additional funds are required   
for any of those reasons, we would be unable to complete our expansion as       
planned and our business and financial condition would be seriously adversely   
affected if we are unable to raise additional funds on acceptable terms, in     
timely fashion, or at all. There is no assurance that any additional financing  
will be available on commercially attractive terms, in timely fashion, in       
sufficient amounts, or at all.                                                  

DIVIDEND POLICY 

We have never declared or paid any cash dividends on our securities. We 
currently intend to retain future earnings, if any, to finance the development  
and expansion of our business and, therefore, we do not anticipate paying any   
cash dividends on our securities in the foreseeable future. Therefore, we do not
anticipate paying any cash dividends on our ordinary shares or ADSs in the      
foreseeable future. Also, the terms of our Series A preferred shares prohibit   
the payment of cash dividends on our ordinary shares in any year until we also  
declare and pay a 9% dividend on our Series A preferred shares.                 

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CAPITALIZATION

The following table shows the short-term debt and capitalization of     
TownPagesNet.com plc as of December 31, 1998, as follows: (1) our actual short  
term debt and capitalization, (2) on a pro forma basis after giving effect to   
the conversion of L850,000 ($1,413,380) of short-term debt due to Glen          
Investments Limited into 850,000 shares of our Series A preferred shares, and   
(3) pro forma as adjusted to give effect to the sale of the 2,200,000 ADSs      
offered by us at the initial public offering price of L6.01 ($10.00) per ADS    
after deducting underwriting discounts and commissions and estimated offering   
expenses and the application of the net proceeds as described in "Use of        
Proceeds." This table should be read in conjunction with our consolidated       
financial statements and the notes included elsewhere in this prospectus.       

                                                        [Enlarge/Download Table]

                                                                          DECEMBER 31, 1998                              
                                                ----------------------------------------------------------------------   
                                                                                                                         
                                                        ACTUAL                PRO FORMA         PRO FORMA AS ADJUSTED    
                                                ----------------------  ----------------------  ----------------------   
                                                    L           $           L           $           L           $        
Short-term debt to affiliate..................  L 1,682,190 $2,797,146  L  832,190  $1,383,766      L   --  $   --       
                                                ----------  ----------  ----------  ----------  ----------  ----------   
                                                ----------  ----------  ----------  ----------  ----------  ----------   
Stockholders' equity                                                                                                     
  (net capital deficiency)                                                                                               

  Redeemable convertible preferred shares, L1                                                                            
    par value; 5,000,000 shares authorized and                                                                           
    no shares issued and outstanding, actual;                                                                            
    5,000,000 shares authorized, and 850,000                                                                             
    Series A shares issued and outstanding,                                                                              
    pro forma; 5,000,000 shares authorized,                                                                              
    and 850,000 Series A preferred shares                                                                                
    issued and outstanding, pro forma as                                                                                 
    adjusted..................................      --          --         850,000   1,413,380     850,000   1,413,380   

  Common stock 1p par value; 20,000,000                                                                                  
    ordinary shares authorized, 5,000,000                                                                                
    ordinary shares issued and outstanding,                                                                              
    actual; 20,000,000 ordinary shares                                                                                   
    authorized, and 5,000,000 ordinary shares                                                                            
    issued and outstanding, pro forma;                                                                                   
    20,000,000 ordinary shares authorized,                                                                               
    7,200,000 ordinary shares issued and                                                                                 
    outstanding, pro forma as adjusted........      50,000      83,140      50,000      83,140      72,000     119,722   

  Additional paid-in capital..................     122,500     203,693     122,500     203,693  11,214,283  18,647,109   

  Accumulated deficit.........................  (1,393,621) (2,317,313) (1,393,621) (2,317,313) (1,393,621) (2,317,312)  
                                                ----------  ----------  ----------  ----------  ----------  ----------   
  Total stockholders' equity (deficit)........  (1,221,121) (2,030,480)   (371,121)   (617,100) 10,742,662  17,862,899   
                                                ----------  ----------  ----------  ----------  ----------  ----------   
    Total capitalization......................  L(1,221,121) $(2,030,480)  L(371,121) $ (617,100) L10,742,662 $17,862,899
                                                ----------  ----------  ----------  ----------  ----------  ----------   
                                                ----------  ----------  ----------  ----------  ----------  ----------   

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DILUTION

 Our pro forma net tangible book deficit, giving effect to the issuance of
850,000 Series A preferred shares to a corporate affiliate of Kevin R. Leech in 
exchange for L850,000 ($1,413,380) principal amount of our indebtedness, as of  
December 31, 1998, was L371,121 ($617,100) or (L0.07) ($0.12) per ordinary      
share. Net tangible book value per share represents the amount of net tangible  
assets, less total liabilities, divided by the number of ordinary shares        
outstanding. After giving effect to the sale by us of 2,200,000 ADSs offered by 
this prospectus at the initial public offering price of L6.01 ($10.00) per ADS, 
our pro forma net tangible book value as of December 31, 1998 would have been   
L10.8 million ($17.9 million), or L1.49 ($2.48) per ordinary share. This        
represents an immediate increase in net tangible book value of L1.56 ($2.60) per
share to existing stockholders and an immediate dilution of L4.52 ($7.52) per   
share to new investors. The following table illustrates this per share dilution:

                                                        [Enlarge/Download Table]
                                                                                                         
Initial public offering price per ADS.........................                L6.01             $   10.00
  Pro forma net tangible book deficit per share at December                                              
    31, 1998..................................................    L(0.07)            $   (0.12)          
  Increase in net tangible book value per share attributable                                             
    to new investors..........................................    L 1.56             $    2.60           
                                                               ---------  ---------  ---------  ---------
Net tangible book value per share after this offering.........                L1.49             $    2.48
                                                                          ---------             ---------
Dilution per share to new investors...........................                L4.52             $    7.52
                                                                          ---------             ---------
                                                                          ---------             ---------

 Assuming the exercise in full of the underwriters' over-allotment option,
our pro forma net tangible book value at December 31, 1998 would have been      
approximately L1.66 ($2.76) per share, representing an immediate increase in net
tangible book value of L1.73 ($2.88) per share, to our existing stockholders and
an immediate dilution in net tangible book value of L4.35 ($7.25) per share to  
new investors.                                                                  

   The following table summarizes, as of December 31, 1998, the differences in
the number of ordinary shares or ADSs purchased from us, the total consideration
paid to us, and the average price paid per ordinary share/ADS purchased by      
existing and new investors, assuming that the 2,200,000 ADSs offered by this    
prospectus are sold by us at the initial public offering price of L6.01 ($10.00)
per ADS.                                                                        

                                                        [Enlarge/Download Table]

                                        SHARES PURCHASED                TOTAL CONSIDERATION                                
                                     -----------------------  ---------------------------------------     AVERAGE PRICE    
                                       NUMBER      PERCENT       AMOUNT         AMOUNT          %           PER SHARE      
                                     ----------  -----------  -------------  -------------  ---------  --------------------
                                                                                                                           
Existing stockholders...............  5,000,000        69.4%     L  172,500  $     286,833       1.29%     L0.03  $    0.06
New investors.......................  2,200,000        30.6%    L13,230,800  $  22,000,000      98.71%     L6.01  $   10.00
                                     ----------       -----   -------------  -------------  ---------  ---------  ---------
    Total...........................  7,200,000       100.0%    L13,403,300  $  22,286,833     100.00%                     
                                     ----------       -----   -------------  -------------  ---------                      
                                     ----------       -----   -------------  -------------  ---------                      

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SELECTED FINANCIAL DATA 

The following selected consolidated financial data with respect to our  
consolidated statement of operations for each of the three years in the period  
ended December 31, 1998 and with respect to our consolidated balance sheets at  
December 31, 1996, 1997 and 1998, has been prepared in accordance with United   
States generally accepted accounting principles except as noted in the next     
sentence, and is derived from the consolidated financial statements and the     
notes thereto appearing elsewhere in this prospectus audited by Ernst & Young,  
independent auditors. The selected consolidated statement of operations data for
the period from November 5, 1995 to December 31, 1995 and the consolidated      
balance sheet data at December 31, 1995 are derived from unaudited financial    
statements. The unaudited financial statements include all adjustments,         
consisting only of normal recurring adjustments, that we consider necessary for 
a fair presentation of our financial position at December 31, 1995 and the      
results of operations for the period then ended. For your convenience, certain  
pounds sterling amounts have been translated into U.S. dollar amounts at the    
December 31, 1998 noon buying rate in New York City for cable transfers. See    
"Exchange Rate Information." The data set forth below should be read in         
conjunction with "Management's Discussion and Analysis of Financial Condition   
and Results of Operations" and those consolidated financial statements and the  
notes thereto.                                                                  

STATEMENT OF OPERATIONS                                                         

                                                        [Enlarge/Download Table]

                                      NOVEMBER 5, 1995                                                           
                                       (INCEPTION) TO                                                            
                                        DECEMBER 31,                 FOR THE YEARS ENDED DECEMBER 31             
                                      -----------------  ------------------------------------------------------- 
                                            1995             1996          1997          1998          1998      
                                      -----------------  ------------  ------------  ------------  ------------- 
                                                      AMOUNTS IN POUNDS STERLING                    AMOUNTS IN   
                                                                                                   U.S. DOLLARS  
                                                                                                                 
Net revenues.........................       L --            L   6,225     L   8,359    L1,120,103  $   1,862,507 
Cost of Revenues.....................        --                21,750        43,781       743,630      1,236,508 
Operating Expenses:                                                                                              
  Research and development...........        --                21,148        40,832        67,910        112,921 
  Sales and Marketing................        --                24,943        20,194       351,633        584,695 
  General and administrative.........          8,052           94,429       220,057       715,168      1,189,181 
  Depreciation and amortization......        --                 9,289        12,572        42,022         69,874 
                                            --------     ------------  ------------  ------------  ------------- 
Total Operating expenses.............          8,052          149,809       293,655     1,176,733      1,956,671 
Loss from operations.................         (8,052)        (165,334)     (329,077)     (800,260)    (1,330,672)
Other income (expense)...............        --                (1,575)      (17,487)      (71,836)      (119,449)
                                            --------     ------------  ------------  ------------  ------------- 
Net loss.............................       L (8,052)      L (166,909)   L (346,564)   L (872,096) $  (1,450,121)
                                            --------     ------------  ------------  ------------  ------------- 
                                            --------     ------------  ------------  ------------  ------------- 
Basic and diluted net loss per                                                                                   
  share..............................       L  (0.03)       L   (0.10)    L   (0.07)    L   (0.17) $       (0.29)
                                            --------     ------------  ------------  ------------  ------------- 
                                            --------     ------------  ------------  ------------  ------------- 
Shares used in computing basic and                                                                               
  diluted net loss per share.........        236,626        1,672,225     5,000,000     5,000,000      5,000,000 
                                            --------     ------------  ------------  ------------  ------------- 
                                            --------     ------------  ------------  ------------  ------------- 

BALANCE SHEET DATA                                                              

                                                        [Enlarge/Download Table]

                                                                          AS OF DECEMBER 31,                      
                                                     ------------------------------------------------------------ 
                                                                                                                  
                                                       1995       1996        1997         1998          1998     
                                                     ---------  ---------  ----------  ------------  ------------ 
                                                               AMOUNTS IN POUNDS STERLING             AMOUNTS IN  
                                                                                                     U.S. DOLLARS 
Cash and cash equivalents...........................    L   43    L 2,408    L 12,868     L  33,868  $     56,316 
Deferred revenue....................................    --         --          --           228,244       379,524 
Total assets........................................     1,948     20,544      36,437     1,631,931     2,713,575 
Total stockholders' equity (net capital                                                                           
  deficiency).......................................    (3,052)    (2,461)   (349,025)   (1,221,121)   (2,030,480)

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

 THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS INCLUDES FORWARD-LOOKING STATEMENTS WITH RESPECT TO   
OUR FUTURE FINANCIAL PERFORMANCE. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT  
TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THE FACTORS DESCRIBED UNDER "RISK 
FACTORS" AND ELSEWHERE IN THIS PROSPECTUS, THAT COULD CAUSE OUR ACTUAL RESULTS  
TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR THOSE CURRENTLY ANTICIPATED.    

OVERVIEW                                                                        

   We produce and deliver, through our wholly-owned operating subsidiary, Town
Pages UK Limited, an Internet-based interactive service, TownPages, designed to 
provide comprehensive, up-to-date locally-focused information about covered     
towns and cities in the United Kingdom.                                         

    From the commencement of our business in November 1995 through June of 1998,
we only had aggregate revenues of L25,620 and incurred L1,110,214 in losses     
during that period. During that time, we primarily engaged in experimental      
prototype operations in Alton, England. We began offering the TownPages service 
on a commercial basis in Winchester, England in June 1998, after installing     
seven touch-screen public information point kiosks in Winchester, England in    
late May, 1998. An eighth touch-screen kiosk was temporarily installed in       
Brighton, England in July 1998 and has recently been moved to Andover, England, 
which is closer to the Winchester area. Our revenues have increased since       
commercial operations commenced in the late spring of 1998. Revenues for the    
third and fourth quarters of 1998 were L28,548 and L1,080,519 ($1,796,687),     
respectively. We incurred losses of L444,184 for the third quarter of 1998 and  
earned profits of L160,777 ($267,340) for the fourth quarter of 1998. Revenues  
for the year ended December 31, 1998 were L1,120,103 ($1,862,507). We incurred  
an aggregate loss of L872,096 ($1,450,121) for 1998. We have incurred           
substantial losses since our inception. As of December 31, 1998, we had an      
accumulated deficit of approximately L1.4 million ($2.3 million). The profits in
the fourth quarter arose from increased complex Web site design services        
revenue, which was not completely offset by the expenses incurred in expanding  
the TownPages service. Work in December 1998 on complex Web site design services
contracts for four customers accounted for approximately 96% of our 1998        
revenues. We expect significant additional net losses to continue on an annual  
and quarterly basis until at least late in the year 2000.                       

During the three year period commencing upon the completion of this     
offering, we intend to roll out the TownPages service across the United Kingdom,
expanding the TownPages database to cover, and installing approximately 3,450   
kiosks in, substantially all of the major towns and cities in the United        
Kingdom. We may also explore opportunities in other appropriate markets in      
Europe and elsewhere in the future.                                             

RESULTS OF OPERATIONS                                                           

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997.  

ADVERTISING REVENUES                                                            

Advertising revenues increased to L40,839 ($67,907) for the year ended  
December 31, 1998, from L5,063 for the year ended December 31, 1997. The        
increase was due primarily to the commencement of commercial operations of      
TownPages in Winchester, England and an increase in the number of subscribers to
the TownPages service. We installed seven TownPages kiosks in Winchester,       
England in late May 1998 and a kiosk in Brighton, England in July 1998. We      
anticipate that revenues from those combined programs will account for a        
substantial amount of net revenues in the future.                               

CONTRACT REVENUE AND OTHER                                                      

  Contract and other revenues increased to L1,079,264 ($1,794,600), of which
L159,742 ($265,619) are with a related party, for the year ended December 31,   
1998 from L3,296 for the year ended                                             

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December 31, 1997. The increase was due to the commencement of four contracts   
for complex Web site design services during the fourth quarter of 1998. Revenues
of L1,079,264 ($1,794,600), of which L159,742 ($265,619) are with a related     
party, were recognized under these contracts in 1998. These four contracts      
accounted for 19%, 14%, 30% and 33% respectively of total net revenues for the  
year ended December 31, 1998. See "Risk Factors" and "Related Party             
Transactions--Travel the Net Ltd." We anticipate that revenues from Web site    
design services will form a lesser percentage of total revenues as advertising  
and other services develop.                                                     

Our management performs ongoing credit evaluations of our customers'    
financial condition and generally does not require collateral on accounts       
receivable. When required, we maintain allowances for credit losses and those   
losses have not been material to date. There was no allowance for doubtful      
accounts as of either December 31, 1997 or December 31, 1998.                   

MAINTENANCE AND HOSTING COSTS                                                   

Maintenance and hosting costs consist primarily of Internet connection  
charges, Web site equipment leasing costs, purchase and installation of public  
information point kiosks, repair and maintenance of equipment and systems,      
collection, development, and processing for display on TownPages of             
locally-focused content. Maintenance and hosting costs increased to L179,776    
($298,932) for the year ended December 31, 1998, from zero for the year ended   
December 31, 1997. The actual pound sterling increase in maintenance and hosting
costs was primarily due to the costs associated with the installation and       
maintenance of the eight TownPages kiosks. We anticipate that those costs will  
continue to grow in absolute amounts for the foreseeable future as we pursue our
expansion plan.                                                                 

COSTS OF CONTRACT AND OTHER REVENUES                                            

  Cost of contract and other revenues consists primarily of certain Web site
design costs and related operating costs. Cost of contract and other revenues   
increased to L563,854 ($937,576) for the year ended December 31, 1998 from      
L43,781 for the year ended December 31, 1997. The increase was due to the       
commencement of four contracts for Web site design services during the fourth   
quarter of 1998. Costs of L526,044 ($874,706), directly related to these        
contracts, were incurred in the quarter. We anticipate that those costs will    
continue to grow in absolute amounts for the foreseeable future as we pursue our
expansion plan.                                                                 

OPERATING EXPENSES                                                              

RESEARCH AND DEVELOPMENT EXPENSES                                       

Research and development expenses include expenses associated with the  
development of services, products and our Web site and consist principally of   
personnel costs, overhead costs, editorial costs, equipment depreciation and    
supplies. These costs have been charged to research and development expenses as 
incurred. Research and development expenses increased to L67,910 ($112,921) for 
the year ended December 31, 1998, from L40,832 for the year ended December 31,  
1997. The pounds sterling increase in research and development expenses was     
primarily due to the roll-out of TownPages into the Winchester, England market  
and attendant increases in the number of personnel involved in the development  
of our Web site. We expect that research and development expenses will grow     
significantly in pounds sterling for the foreseeable future as we pursue our    
expansion strategy and devote substantial resources to the development of       
services, products and our Web site.                                            

SALES AND MARKETING EXPENSES                                            

Sales and marketing expenses consist primarily of salaries of sales and 
marketing personnel, commissions, advertising and other marketing related       
expenses. Sales and marketing expenses also include personnel costs and costs   
associated with our radio, bus, direct mailings, printed ads, film trailer      
advertising and telesales campaigns in the United Kingdom. Sales and marketing  
expenses increased to L351,633 ($584,695) for the year ended December 31, 1998, 
from L20,194 for the year ended                                                 

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December 31, 1997. The pounds sterling increase in sales and marketing expenses 
was primarily due to the roll-out of TownPages into the Winchester, England     
market and attendant increases in the number of sales personnel, increased sales
commissions and increased expenses associated with promotion and marketing      
efforts. We expect that sales and marketing expenses will grow significantly in 
pounds sterling for the foreseeable future as we pursue our expansion and       
branding strategy and hire additional sales and marketing personnel.            

GENERAL AND ADMINISTRATIVE                                              

General and administrative expenses consist primarily of salaries and   
related costs for general corporate functions, including finance, accounting,   
facilities and legal and other fees for professional services. General and      
administrative expenses increased to L715,168 ($1,189,181) in the year ended    
December 31, 1998, from L220,057 for the year ended December 31, 1997. The      
pounds sterling increase in general and administrative expenses was primarily   
due to increases in the number of personnel to support the growth of our        
business, increases in recruiting costs related to filling key senior executive 
positions and costs associated with the preparation and updating of our business
plan. General and administrative expenses decreased as a percentage of net      
revenues because of the growth in net revenues. We expect that we will incur    
additional general and administrative expenses in pounds sterling for the       
foreseeable future as we hire additional personnel and incur additional expenses
related to the growth of the business and our operations as a public company.   

INTEREST EXPENSE, NET                                                   

Interest expense, net includes income from our cash and investments and 
expenses related to our financing obligations. Interest expense, net increased  
to L71,836 ($119,449) for the year ended December 31, 1998, from L17,487 for the
year ended December 31, 1997. The increase in pounds sterling was primarily due 
to an increase in borrowings from an affiliate of Kevin R. Leech, a director    
and, through a corporate affiliate, the owner of 90% of our share capital. We   
anticipate that this interest expense will decrease significantly after the     
affiliate converts the indebtedness into our Series A preferred shares. We      
anticipate that the balance of this interest expense will be eliminated when the
balance of the indebtedness to the affiliate is repaid or refinanced at the     
closing. However, the reductions will be offset to the extent the indebtedness  
to the affiliate is refinanced at the closing or we have borrowings under the   
contemplated credit facility to finance our expansion or for other corporate    
purposes.                                                                       

NET LOSS                                                                        

    Although our net revenues increased for the year ended December 31, 1998, as
compared to the year ended December 31, 1997, a substantial increase in         
operating expenses to finance the continued development of TownPages, increased 
penetration of existing markets and expansion into additional markets caused us 
to incur a net loss of L872,096 ($1,450,121) for the year ended December 31,    
1998, as compared to a net loss of L346,564 for the year ended December 31,     
1997. We anticipate that losses will continue on an annual and quarterly basis  
until at least late in the year 2000.                                           

YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED DECEMBER 31, 1996       

NET REVENUES                                                                    

   Net revenues increased to L8,359 for the year ended December 31, 1997, from
L6,225 for the year ended December 31, 1996. The increase in net revenues was   
due primarily to an increase in the number of advertisers subscribing to our    
products and services. During these periods all of our net revenues were derived
from sales made to customers based in the United Kingdom.                       

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COST OF REVENUES                                                                

    Cost of revenues consists primarily of Internet connection charges, Web site
equipment leasing costs, purchase and installation of public information point  
kiosks, depreciation, repair and maintenance of equipment and systems,          
collection, development, and processing for display on TownPages of             
locally-focused content, certain Web site design costs, and related operations  
costs. Costs of revenues increased to L43,781 for the year ended December 31,   
1997, from L21,750 for the year ended December 31, 1996. This increase in costs 
of revenues in pounds sterling was due primarily to the continued growth in     
expenditures to develop and test market TownPages in Alton, England, which was  
only nominally offset by an insignificant increase in revenues during this      
testing and development phase as compared with the prior period. We anticipate  
that these costs will continue to grow in absolute amounts for the foreseeable  
future as we expand our operations in existing markets and enter new markets.   

OPERATING EXPENSES                                                              

RESEARCH AND DEVELOPMENT                                                

Research and development expenses include expenses associated with the  
development of services, products and our Web site and consist principally of   
personnel costs, overhead costs, editorial costs, equipment depreciation and    
supplies. These costs have been charged to research and development expenses as 
incurred. Research and development expenses increased to L40,832 for the year   
ended December 31, 1997, from L21,148 for the year ended December 31, 1996. We  
expect that research and development expenses will grow significantly in pounds 
sterling for the foreseeable future as we pursue our expansion strategy and     
devote substantial resources to the development of services, products and our   
Web site.                                                                       

SALES AND MARKETING EXPENSES                                            

Sales and marketing expenses consist primarily of salaries of sales and 
marketing personnel, commissions, advertising and other marketing related       
expenses. Sales and marketing expenses also include personnel costs and costs   
associated with our radio, bus, direct mailings, print advertising, film trailer
advertising and telesales campaigns in the United Kingdom. Sales and marketing  
expenses decreased to L20,194 for the year ended December 31, 1997, from L24,943
for the year ended December 31, 1996. The decrease in sales and marketing       
expenses was due to TownPages incurring start-up costs in respect of promotional
items in the year ended December 31, 1996. We expect that sales and marketing   
expenses will grow significantly in pounds sterling for the foreseeable future  
as we pursue our expansion and branding strategy and hires additional sales and 
marketing personnel.                                                            

GENERAL AND ADMINISTRATIVE                                              

General and administrative expenses consist primarily of salaries and   
related costs for general corporate functions, including finance, accounting,   
facilities and legal and other fees for professional services. General and      
administrative expenses increased to L220,057 for the year ended December 31,   
1997, from L94,429 for the year ended December 31, 1996. General and            
administrative expenses increased both in pounds sterling and as a percentage of
net revenues primarily due to increases in the number of personnel to support   
the growth of our business, and increases in recruiting costs related to filling
key senior executive positions, which were only nominally offset by an          
insignificant increase in net revenues during this testing and development phase
as compared with the prior period. We expect that we will incur additional      
general and administrative expenses in pounds sterling as we hire additional    
personnel and incur additional expenses related to the growth of the business   
and our operations as a public company.                                         

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INTEREST EXPENSE, NET                                                   

Interest expense, net includes income from our cash and investments and 
expenses related to our financing obligations. Interest expense, net increased  
to L17,487 for the year ended December 31, 1997, from L1,575 for the year ended 
December 31, 1996. The increase in pounds sterling was primarily due to an      
increase in borrowings from an affiliate of Kevin R. Leech, one of our directors
and our principal stockholder.                                                  

NET LOSS                                                                        

   We incurred a net loss of L346,564 for the year ended December 31, 1997, as
compared to a net loss of L166,909 for the year ended December 31, 1996. The    
increase in pounds sterling was primarily due to a substantial increase in      
operating expenses to finance the continued testing, development and enhancement
of TownPages, which was only nominally offset by an insignificant increase in   
revenues as compared with the prior period.                                     

LIQUIDITY AND CAPITAL RESOURCES                                                 

Since February 1996, we have financed our operations primarily through a
discretionary secured operating line of credit for our Town Pages UK Limited    
subsidiary with Glen Investments Limited. Kevin R. Leech, a member of our board 
of directors and the principal beneficial owner of our ordinary shares, is the  
beneficial owner of 100% of the outstanding share capital of Glen Investments   
Limited. Advances under the line of credit bear interest at 9% per annum, are   
payable on demand, and are secured by a first security interest in all of the   
assets and property of Town Pages UK Limited, our operating subsidiary. At      
December 31, 1998, we owed approximately L1.8 million ($3.0 million) inclusive  
of interest, under the line of credit. Upon completion of this offering,        
L850,000 ($1,413,380) of the amount anticipated to be outstanding to Glen       
Investments Limited, including interest, will be converted into 850,000 shares  
of our 9% Series A preferred shares. The balance of the outstanding loans and   
indebtedness owed to Glen Investments Limited will be repaid from the net       
proceeds of this offering or will be refinanced. We are seeking to establish a  
new credit facility from a commercial lender effective upon completion of this  
offering of up to L3.0 million ($5.0 million). We contemplate that any new line 
of credit shall be secured by a first security interest in all of our assets and
advances under that line of credit shall be based upon agreed upon percentages  
of our eligible accounts receivable. As of the date of this prospectus, we do   
not have a commitment from any lender for any proposed credit facility. See     
"Related Party Transactions."                                                   

Net cash used in operating activities increased to L271,718 for the year
ended December 31, 1997 from L142,718 in the year ended December 31, 1996, and  
increased to L1,214,000 ($2,018,639) for the year ended December 31, 1998, as   
compared to L271,718 for the year ended December 31, 1997. The increase in net  
cash used resulted primarily from increasing net losses and accounts receivable,
partially offset by increases in accrued expenses.                              

Net cash used in investing activities decreased to L16,746 for the year 
ended December 31, 1997 from L22,417 in the year ended December 31, 1996, and   
increased to L148,266 ($246,537) for the year ended December 31, 1998, as       
compared to L16,746 for the year ended December 31, 1997. The increase in net   
cash used in investing activities resulted primarily from purchases of equipment
and eight touch-screen public information point kiosks.                         

    Net cash provided by financing activities increased to L298,924 for the year
ended December 31, 1997 from L167,500 in the year ended December 31, 1996, and  
increased to L1,383,266 ($2,300,095) for the year ended December 31, 1998, as   
compared to L298,924 for the year ended December 31, 1997. The increase in net  
cash provided by financing activities resulted primarily from advances from Glen
Investments Limited under the line of credit facility.                          

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YEAR 2000                                                                       

  The Year 2000 issue refers to the potential failures that computer systems
may incur as a result of the date change from 1999 to 2000. Many existing       
computer programs use only two digits to identify a year in the date field.     
These programs were designed without considering the impact of the upcoming     
change of the century. As a result, computer systems using these programs may be
unable to properly recognize date-sensitive data resulting in the creation of   
erroneous information or system failure.                                        

    We rely on telecommunications carriers to transmit our Internet traffic over
local and long distance networks. It is uncertain what impact the Year 2000     
issue will have on the Internet and the Web, or on the ability of users to use  
their computers to access our services, but major disruption is possible. A     
possible worst case Year 2000 scenario for us would be if the telecommunications
carriers' systems failed. If their networks fail for an extended period of time 
due to the Year 2000 issue, we will no longer be able to operate our business.  
In the event our telecommunications carriers' systems are not Year 2000         
compliant on a timely basis, we will seek services through carriers who are Year
2000 compliant. However, there is no assurance that this can be accomplished in 
a cost-effective manner.                                                        

We have taken a number of steps to address the Year 2000 issue. We have 
completed testing of our hardware, software and data sets according to Year 2000
compliance standards we established internally as the first phase of our Year   
2000 compliance certification process. As the next phase of our Year 2000       
compliance certification process, we are rechecking these systems in accordance 
with Year 2000 compliance standards officially established by the British       
Standards Institute. As a parallel phase of our Year 2000 compliance            
certification process, we are requesting and receiving certifications from the  
various vendors of our hardware, software and microprocessor-embedded equipment 
that the products they have provided to us are fully Year 2000 compliant. Where 
it is necessary to achieve Year 2000 compliance, we are obtaining upgrades from 
these vendors. Any failure by our vendors to resolve any Year 2000 issues on a  
timely basis, or in a manner that is compatible with our systems, could         
significantly damage our business and financial condition. In the event our     
vendors do not become Year 2000 compliant on a timely basis, we will seek       
products and services from vendors who are Year 2000 compliant. However, there  
can be no assurance that this can be accomplished in a cost-effective manner.   

  Although our management expects to incur costs in correcting any Year 2000
issues arising as a result of our suppliers handling of their own Year 2000     
issues, our management cannot currently estimate those costs. In the process of 
testing our hardware, software, data sets and microprocessor embedded equipment,
we have not encountered any significant problems to date and expect to be fully 
Year 2000 compliant by mid-1999. Based on our experience to date, we have only  
budgeted approximately L5,000 ($8,300) for completion of our Year 2000          
remediation efforts. However, there can be no assurance that actual costs of    
compliance will not significantly exceed this amount.                           

EFFECTS OF THE EURO                                                             

    Under the terms of the Treaty on European Economic and Monetary Union, as of
January 1, 1999, the euro was introduced as a common currency among the eleven  
members of the European Union that are participating in this phase of European  
Economic and Monetary Union, commonly referred to as EMU. Although the          
individual currencies of these countries will continue to be used until the end 
of 2001, their exchange rates with the euro are fixed. The Euro is now being    
used for transactions that do not involve payment using physical notes and coins
of the participating countries. The individual currencies will be replaced with 
euro notes and coins at the start of 2002 when all countries participating in   
the EMU are expected to operate with the euro as their exclusive common         
currency.                                                                       

The current government of the United Kingdom has stated that the United 
Kingdom will not participate in EMU and adopt the euro until after the next     
general election, at the earliest. We are currently working on the assumption   
that the next general election will be in 2001 or 2002 and that the United      
Kingdom will enter the EMU shortly thereafter following confirmation of the     
government's decision through a referendum.                                     

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   We do not currently operate in any countries that have adopted the euro and
we therefore do not face a significant currency or competitive exposure to the  
euro. However, in the future we may expand into a number of these countries.    

    In the event that the United Kingdom adopts the euro, we would face a number
of costs in altering our accounting-related systems for the new currency,       
although at present it is too early to estimate what these costs might be.      
Adoption of the euro in the United Kingdom would also create greater            
transparency between prices offered to our customers in different countries that
participate in EMU.                                                             

 A significant amount of uncertainty exists as to the effect that the euro
will have on the marketplace. We are assessing the effect that the euro         
introduction will have on our internal systems and the sale of our products and 
services. We expect to take appropriate actions based on the results of this    
assessment. Currently, we do not believe that the adoption of the euro by eleven
countries of the European Union will have an adverse impact on our liquidity or 
financial condition.                                                            

RECENT ACCOUNTING PRONOUNCEMENTS                                                

In June 1997, the FASB issued SFAS No. 130, "REPORTING COMPREHENSIVE    
INCOME." This statement requires that changes in comprehensive income be shown  
in a financial statement that is displayed with the same prominence as other    
financial statements. The statement is effective for annual periods beginning   
after December 15, 1997 and we adopted its provisions in fiscal 1998.           
Reclassification for earlier periods is required for comparative purposes. To   
date, the statement has not had a material impact on our financial position or  
results of operations.                                                          

    In June 1997, the FASB issued SFAS No. 131, "DISCLOSURE ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION," which changes the way public companies     
report information about operating segments. SFAS No. 131, which is based on the
management approach to segment reporting, establishes requirements to report    
selected segment information quarterly and to report entity-wide disclosures    
about products and services, major customers, and the material countries in     
which the entity holds assets and reports revenue. To date, the statement has   
not had a material impact on our financial position or results of operations.   

 In February 1998, FASB issued SFAS No. 132, "EMPLOYERS' DISCLOSURES ABOUT
PENSION AND OTHER POSTRETIREMENT BENEFITS," which revises employers' disclosures
about pension and other postretirement benefit plans. SFAS No. 132 does not     
change the measurement or recognition of those plans. SFAS No. 132 is effective 
for fiscal years beginning after December 15, 1997. The adoption of SFAS No. 132
did not have an impact on our results of operations, financial position, or cash
flows.                                                                          

 In March 1998, the American Institute of Certified Public Accounts issued
Statement of Position 98-1, "Accounting for the Cost of Computer Software       
Developed or Obtained for Internal Use." SOP 98-1 is effective for financial    
statements for years beginning after December 15, 1998. SOP 98-1 provides       
guidance over accounting for computer software development or obtained for      
internal use including the requirement to capitalize specified costs and        
amortization of these costs. We do not expect the adoption of this standard to  
have a material effect on our capitalization policy.                            

 In April 1998, AICPA issued SOP 98-5, "REPORTING ON THE COSTS OF START-UP
ACTIVITIES." SOP 98-5, which is effective for fiscal years beginning after      
December 15, 1998, provides guidance on the financial reporting of start-up     
costs and organization costs. It requires costs of start up activities and      
organization costs to be expensed as incurred. As we have expensed these costs  
historically, the adoption of this standard is not expected to have a           
significant impact on our results of operations, financial position or cash     
flows.                                                                          

In June 1998, FASB issued SFAS No. 133, "ACCOUNTING FOR DERIVATIVES AND 
HEDGING ACTIVITIES," which establishes accounting and reporting standards for   
derivative instruments, including certain derivative instruments embedded in    
other contracts (collectively referred to as derivatives) and for hedging       
activities. SFAS No. 133 is effective for all fiscal quarters of fiscal years   
beginning after June 15, 1999. The adoption of SFAS No. 133 is not expected to  
have an impact on our results of operations, financial position, or cash flows. 

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BUSINESS

OVERVIEW                                                                        

We produce and deliver TownPages, an Internet-based interactive service 
designed to provide comprehensive, up-to-date locally-focused information about 
specified towns and cities in the United Kingdom. In addition to being a local  
information content provider, TownPages is a portal to the Internet for         
consumers. The service is accessible through standard Internet connections to   
the TownPages Web site at www.townpagesnet.com or www.townpages.co.uk. Our      
free-to-use touch-screen public information point kiosks are a key element of   
the TownPages information delivery system.                                      

TownPages has been successfully tested in Winchester and Alton,         
respectively, a small city (population approximately 100,000 in 1995) and a     
small town (population approximately 16,000 in 1995) near London, England. As of
December 31, 1998, seven TownPages touch-screen kiosks were installed and       
operating in and near Winchester and Alton and one was operating in nearby      
Andover, England (population approximately 12,000 in 1995). During experimental 
prototype operations in Alton, when we were primarily testing and developing the
systems and format of TownPages, we only had revenues of approximately L25,620  
($42,601) from inception in late 1995 through June 1998. We incurred losses of  
L1,110,214 ($1,846,064) during that period. We began offering the TownPages     
service on a commercial basis in June 1998, after installing seven touch-screen 
kiosks in Winchester, England in late May 1998. Our initial advertising campaign
to announce TownPages service in the Winchester area was launched at the end of 
May 1998. Our revenues have increased since commercial operations commenced in  
the late Spring of 1998. Revenues for the third and fourth quarters of 1998 were
L28,548 ($47,470) and L1,080,519 ($1,796,687), respectively. We incurred losses 
of L444,184 ($738,589) for the third quarter of 1998 and earned profits of      
L160,777 ($267,340) for the fourth quarter of 1998. The profits in the fourth   
quarter arose from increased complex Web site design services revenue, which was
not completely offset by the expenses incurred in expanding the TownPages       
service. Work in December 1998 on Web site design services contracts for four   
customers accounted for approximately 96% of our 1998 revenues. These customers 
are four United Kingdom companies known as Travel the Net Limited               
(travelthenet.com), All-Cars.com Limited (all-cars.com), Medic Media Inc.       
(pharmachannel.com) and Location Developments Limited (eshoppingcentre.com). Mr.
Kevin Leech, our principal shareholder and one of our directors, owns 25% of a  
company that owns 50% of Travel the Net Limited. See "Related Party             
Transactions--Travel the Net Ltd."                                              

INDUSTRY BACKGROUND AND TRENDS                                                  

THE INTERNET                                                            

The Internet is an increasingly significant global medium for           
communications. The increasing functionality, accessibility and overall usage of
the Internet and online service providers, such as America Online and The       
Microsoft Network, have made the Internet an attractive commercial medium. The  
portion of the Internet known as the Web, which has become almost synonymous    
with the Internet as a whole, has experienced the fastest growth and the most   
acceptance among ordinary users. Matrix Information and Director Services       
currently estimates that total worldwide Internet usage is expected to grow from
57 million in 1997 to more than 700 million in 2001. According to NOP Research, 
over 6 million adults in the United Kingdom used the Internet during the 12     
months ended June 1997, and approximately 9 million adults in the United Kingdom
were expected to have used the Internet by June 1998. Growth in Internet usage  
has been fueled by a number of factors, including the availability of a growing 
number of useful products and services via the Internet, the large and growing  
installed base of personal computers in the workplace and home, advances in the 
performance and speed of personal computers and modems, improvements in network 
infrastructure, easier and cheaper access to the Internet and increased         
awareness of the Internet among businesses and consumers. As Internet           
accessibility, usage and functionality continue to grow, the Internet is        
increasingly being used as a medium for direct communication among users, such  
as E-Mail and bulletin boards, as well as a rapidly growing sales and marketing 
channel.                                                                        

  A growing number of users have transacted business over the Web, including
trading securities, buying goods, purchasing airline tickets and paying bills.  
For example, according to Nielsen Media Research, as of October 1998, more than 
20% of United States Internet users have made a purchase over the Web. As       
E-commerce increases, advertisers and direct marketers are increasingly seeking 
to use the Web to locate customers, advertise and facilitate transactions.      

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   According to The Georgia Institute of Technology's Graphic, Visualization &
Usability Center's Ninth World Wide Web User Survey, approximately 81% of all   
Web users in 1998 will be in either relatively high income management,          
professional or technical job categories or in education categories, including  
students. These are consumer categories that many advertisers desire to reach.  

EXISTING INTERNET SERVICES AND THE TOWNPAGES SOLUTION                           

As users spend more time on the Web, our management believes, they are  
increasingly seeking information about local events, places of interest,        
shopping, and other information regarding the communities where they spend most 
of their time and money. Our management believes that many businesses, in turn, 
are seeking cost-effective means to target advertising and direct marketing     
efforts based on demographic characteristics, specific interests, and geographic
locations.                                                                      

 Our management believes that consumers who attempt to use general purpose
search engines and navigational guides to access locally-focused content from   
third-party Web sites may find it difficult to locate the information they seek 
because it may be scattered at many unrelated Web sites, not locally focused, or
out or date or not comprehensive. From an advertiser's perspective, in many     
instances, traditional print, television, and radio advertising media is not    
well designed to cost-effectively target audiences segmented topically or       
geographically. Traditional media is not designed to allow quick revision of the
message or delivery of detailed information on a cost-effective basis, if at    
all. Also, we believe traditional media does not provide advertisers a means for
monitoring and evaluating advertisement effectiveness, receiving and processing 
consumer response effectively or quickly, or interacting with consumers on a    
real-time basis. As a result, our management believes, a significant opportunity
exists for a local town or city guide that meets consumers' demands for         
easily-accessible, comprehensive local information, and businesses' objectives  
for targeting, interacting with, and selling to these consumers.                

   In contrast, TownPages provides comprehensive, up-to-date information about
covered localities in a graphically pleasing format. Consumers can readily      
access TownPages to make targeted searches of all of the content on the         
TownPages site. TownPages users can obtain comprehensive, locally-focused       
information about governmental departments and services, tourist attractions,   
hotels, restaurants, public transportation timetables, shopping, real estate    
listings, employment opportunities, arts and entertainment events, community    
activities, recreation, businesses, professional services, and local news,      
sports and weather. Interactive sections, such as Town Diaries and Message      
Boards, and new E-commerce features that we are beginning to introduce, permit  
users to enter and edit information about local events, exchange messages, and  
make certain purchases on TownPages.                                            

   Our management believes that our business, governmental, and not-for-profit
subscribers can use TownPages to reach targeted audiences both topically and    
geographically on a more cost-effective basis, than through traditional printed 
advertising media. Installation of our free-to-use touch-screen public          
information point kiosks at strategic locations in covered communities both     
improves TownPages' brand recognition and helps to generate additional traffic. 
In addition, TownPages uses Internet-based systems and computer processing      
capabilities to permit quick updating and expansion of customers' displays and  
Web sites, and rapid collection, monitoring, and processing of consumer data.   

GROWTH STRATEGY AND BUSINESS MODEL                                              

  We aim to make TownPages the United Kingdom's premier branded free-use and
paid-advertising, locally-focused information provider on the Internet. We      
intend to pursue the following strategies to achieve that goal:                 

    - LEVERAGE OUR MODEL TO RAPIDLY ROLL OUT THE TOWNPAGES SERVICE. We intend to
   roll out the TownPages service across the United Kingdom over the three
      years following the completion of this offering. During that time, we plan
to expand our database to cover, and install touch-screen public    
     information point kiosks in, substantially all the major towns and cities
in the United Kingdom. We plan to cover the four major metropolitan 
     centers in the United Kingdom within the next 18 - 24 months. We may also
      explore opportunities in other appropriate markets in Europe and elsewhere
in the future.                                                      

   - INSTALL ADDITIONAL TOWNPAGES TOUCH-SCREEN PUBLIC INFORMATION POINT KIOSKS
 DURING THE NATIONAL ROLL-OUT. During the three year period commencing
immediately upon completion of this offering, we plan to install    
   approximately 3,450 touch-screen information point kiosks in the United
      Kingdom including the 8 kiosks currently in-place. Our management believes
that if we rapidly place a                                          

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     substantial number of our touch-screen public information point kiosks in
 strategically selected cities and towns, we will obtain a competitive
    advantage. Our management believes that businesses and local governments
  like the TownPages kiosk concept because, based upon our experience to
    date, the touch-screen kiosks are easy to use by individuals who are not
     necessarily regular Internet users or have no other regular access to the
 Internet. In addition, the kiosks promote and reinforce the TownPages
brand and generate additional traffic on TownPages.                 

- ENTER INTO EXCLUSIVE INFORMATION SERVICE ARRANGEMENTS WITH LOCAL      
GOVERNMENTS IN THE UNITED KINGDOM. We intend to enter into as many  
contracts with local governments as possible to obtain the right to 
 incorporate locally-focused information available through those local
governments into TownPages. Based on our contacts to date with      
approximately 60 of the approximately 470 larger local and regional 
   councils in the United Kingdom, many of those local governmental bodies
      appear to desire to obtain a service of the type offered by TownPages. The
     councils appear to want to communicate more effectively with constituents
     and promote the use of information technology by a broader segment of the
     population. Our management believes that exclusive relationships with the
councils will provide us with a competitive advantage in those      
   communities, and possibly permit us to achieve our goal of becoming the
   leading branded Internet-based, locally-focused information provider in
the United Kingdom.                                                 

- EXPAND STRATEGIC PARTNERSHIPS WITH INFORMATION PROVIDERS. We intend to
     continue to seek additional content, further establish and strengthen the
      TownPages brand, and achieve improved access to, and increased traffic on,
      the TownPages service, through alliances with other information providers.

  - CONTINUE TO BUILD STRATEGIC RELATIONSHIPS WITH OTHER BUSINESSES. We will
   continue to build and seek additional strategic and other relationships
 with local and national businesses to increase revenues, add content,
  generate additional traffic, and validate and strengthen the TownPages
brand.                                                              

   - PURSUE ADDITIONAL REVENUE-GENERATING ACTIVITIES, INCLUDING EXPANDED FOCUS
 ON E-COMMERCE. We plan to expand our revenue sources as opportunities
    present themselves to use the TownPages service as a platform for taking
advantage of commercial opportunities on the Internet.              

    - CONTINUALLY ENHANCE TOWNPAGES' FUNCTIONALITY AND PERFORMANCE. We intend to
    continually upgrade our software and systems and user interfaces to take
advantage of developing Internet and emerging information technology
      delivery capabilities. Our objective is to anticipate customers' needs and
     develop and maintain a leadership position in the growth of this industry
sector by providing effective services in an attractive, easy-to-use
format.                                                             

PRODUCTS AND SERVICES                                                           

THE TOWNPAGES HOME PAGE                                                 

 The TownPages home page is the initial stop for all users of TownPages at
our Web site at www.townpagesnet.com or www.townpages.co.uk. Users may access   
information either on a national (currently United Kingdom) or local basis. The 
"national" section of the home page leads to various Web sites, advertisers, and
information services displayed on TownPages. In keeping with the "touch-screen" 
feel of the service, users can "press" buttons to arrive at various             
topically-differentiated destinations. As of January 31, 1999, these destination
settings include "Community," "News," "Weather," Timetables," "Property,"       
"Jobs," "Shopping," "Cars," "Leisure," and "Free E-Mail."                       

  If the user selects a particular town or city destination from the "local"
section of the TownPages home page, the user arrives at the local TownPages home
page for that town or city or the nearest covered community. This is the primary
entry to all of the TownPages information and services pertaining to the chosen 
town or city. The look and feel is designed to be easy to use, both for users   
who access TownPages via standard connections to the Internet and for users at  
TownPages touch-screen public information point kiosks. There are "buttons" to  
"press" to access various topically differentiated destinations. Currently,     
these are "Local Directory," "Leisure," "News & Events," "Property,"            
"Community," "Tourism," "Jobs," and "Special Offers." There are also separate   
"buttons" which allow the user to choose the "Local Directory," "Kiosk          
Information," "Kid's Pages," "Search," "Local Area Index," enter                
TownPages-sponsored promotional competitions, and obtain various local news     
stories. The local home page also announces various community events, such as   
art exhibitions,                                                                

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special events and performances. Users on any TownPages local home page may     
return to the primary TownPages home page at any time.                          

The various "buttons" link the user to sites which provide comprehensive
information and services using an interactive, graphical user interface:        

   - LOCAL DIRECTORY--Local businesses and services, organized from "A" to "Z"
by category.                                                        

- LEISURE--Local leisure options, organized alphabetically within the   
following categories linked to this page: "Food & Drink," "Sports," 
"Arts," and "Entertainment."                                        

  - NEWS & EVENTS--Local news content can be accessed by choosing "Stories."
Interactive services allow users to send and receive E-Mail and post
      announcements of special events and other items of interest on a community
bulletin board by selecting "Message" or "Diary."                   

- PROPERTY--Local real estate listings.                                 

- COMMUNITY--Information concerning various local services and community
    organizations. Information concerning local medical services and related
topics of interest can be found under "Health." Local educational   
    institutions, from pre-school through post-graduate, are described under
"Education." "Societies" is the place where various community       
organizations, club, hobby, and special interest groups are listed. 
    Information concerning governmental officials, departments, and services
can be found by choosing "Councils."                                

  - TOURISM--Local "History," "Maps," "Hotels," and "Places of Interest" can
be obtained here.                                                   

- JOBS--Local employment listings.                                      

- SPECIAL OFFERS--Various promotions.                                   

- KIOSK INFORMATION--The touch-screen public information point kiosks   
located nearest to the user can be located through this page.       

- KID'S PAGES--Games, fun activities and child-oriented competitions.   

  - SEARCH--A means for locating a particular area of interest on TownPages.

- LOCAL AREA INDEX--A navigational guide to relevant sections of the    
TownPages Web site.                                                 

DIFFERENTIATED PRESENCE ON THE WEB FOR LOCAL AND REGIONAL BUSINESSES AND
ORGANIZATIONS                                                         

    We create and maintain Web sites and on line displays on TownPages sites for
business, governmental agency, and not-for-profit advertisers. TownPages        
aggregates the Web sites and displays in our locally-focused, comprehensive town
and city guide environment. By aggregating a customer's Web site or display with
those of numerous other businesses in a comprehensive branded local town and    
city guide, TownPages provides topical and geographic context to a customer's   
Web presence in an effort to help generate significant Internet traffic. Our    
Internet-based system permits quick updating and expansion of sites and         
displays, and rapid collection, monitoring and processing of consumer data. Our 
management believes that TownPages offers advertisers the opportunity to reach  
and interact with targeted audiences in a cost-effective manner.                

We list certain basic contact information for local governments, and a  
simple line entry for businesses and organizations, on TownPages free of charge.
However, we also offer subscribers integrated solutions, for a fee, to establish
attractive, customized, multi-page Web sites including design, layout,          
photography, posting of updated information, hosting and maintenance. Businesses
and organizations purchasing our enhanced services are able to provide a        
targeted audience up-to-date information about their products and services,     
including photographs, prices, store location, schedules of live entertainment, 
specials or sales and other relevant information. Most of our enhanced format   
services are sold under one year contracts, and banner display space is         
currently sold for three month periods. Enhanced displays range from a          
relatively simple templated display to a complex multi-level customer Web site  
with multi-media and interactive features, and includes formats with multiple   
photos or graphics and banner advertisement on high traffic locations.          

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    The following table summarizes our display products and services, and prices
as of December 31, 1998 (excluding VAT; all prices are approximate and subject  
to change, and design charges may vary):                                        

                                                        [Enlarge/Download Table]

PRODUCTS AND SERVICE                                      PRICES                                                  
--------------------------------------------------------  --------------------------------------------------------
                                                                                                                  
LINE ENTRY--a line entry similar to a "yellow-            Free-of-charge.                                         
  pages"-type classified listing                                                                                  
TEMPLATED DISPLAY--a relatively simple display of text    Approximately L50 ($83) per annum with a charge of      
  and one picture or logo.                                approximately L10 ($17) per change.                     
ENHANCED TEMPLATED DISPLAY--larger display of text with   Approximately L150 ($249) per annum with a charge of    
  additional graphic content including additional         approximately L10 ($17) per change.                     
  pictures and an E-mail link to a pre-existing existing                                                          
  E-mail address.                                                                                                 
WEB SITE--a custom-designed Web site, usually consisting  First year charges are approximately L250 ($415) for the
  of multiple pages or linked sites, frequently           first page and approximately L100 ($166) for each page  
  incorporating multi-media features.                     thereafter. Additional charges apply for special effects
                                                          and E-commerce features. Annual renewal charges vary    
                                                          depending on the size of the Web site, but are generally
                                                          at least 20% of the original cost plus L250 ($415)      
                                                          (including maintenance).                                
COMPLEX WEB SITE--a complex custom-designed Web site.     Priced per individual negotiated contract.              
BANNERS--graphical advertising banners or news stories,   Approximately L50--L450 ($83--$748) for each 3 month    
  with links to advertiser's content on other TownPages   period, depending upon the location and prominence of   
  sites.                                                  the banner on the TownPages site and other factors.     

EXPANSION INTO E-COMMERCE AND OTHER SERVICES FROM THE TOWNPAGES PLATFORM

We plan to offer electronic commerce functionality and other innovative 
features to allow businesses to better serve consumers through the Internet and 
our touch-screen public information point kiosks. Services that we intend to    
seek to offer in the future include online purchase and payment for goods and   
services, online ticketing, reservations, sales events notifications, electronic
coupons, newsletters and other transactions. These types of services will offer 
us the opportunity to further attract both consumers and businesses to our sites
and to derive revenues through increased fees from businesses for additional    
services and potentially from online product sales.                             

    We are beginning to offer electronic commerce services to businesses seeking
to complete sales online. We recently completed a test program with TicketLink  
to provide online theater information services and facilitating theater ticket  
purchasing through an E-mail and telephone call-back link at a TownPages kiosk  
which was temporarily located in Brighton, England. We plan to offer that type  
of service at more TownPages kiosks in 1999. We also plan to introduce online   
ticket purchasing capabilities in 1999, first, for theater tickets and          
ultimately for tickets for other types of entertainment, such as sports, movies,
concerts, theme parks, and special events, and also for tickets for various     
forms of transportation.                                                        

MULTI-PLATFORM ACCESS TO TOWNPAGES                                      

TownPages is accessible through standard Internet connections to our Web
site. However, TownPages information and services can also be obtained through  
our free-to use touch-screen public information point kiosks. Our management    
believes that the kiosks are a key element of the TownPages service that sets us
apart from many other current United Kingdom providers of Internet-based        
community information services. Our management believes that the touch-screen   
kiosk delivery system is particularly important in a market like the United     
Kingdom in which, when compared to the United States market, for example,       
familiarity with and use of the Internet by the general population is in a      
relatively early stage.                                                         

  To enhance the TownPages brand and establish a leading market position, we
have installed and plan to install our touch-screen public information point    
kiosks at strategic locations in designated communities throughout the United   
Kingdom where visitors are likely to desire information about local             

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services or events, such as supermarkets, shopping centers, hotel lobbies, bus  
and railroad stations, colleges, libraries, and tourist information centers. As 
of December 31, 1998, we had installed seven kiosks in the Winchester, England  
area and one kiosk in nearby Andover, England.                                  

The TownPages kiosks currently are manufactured by original equipment   
manufacturers in the United Kingdom to our specifications from standard         
components which our management believes are readily obtainable from a number of
different manufacturers. The kiosks are designed to be user-friendly for        
individuals who have little or no familiarity with, or access to, computers or  
the Internet. Currently, all of our eight operating kiosks are indoors, but we  
envision a number of different kiosk types, each one appropriate for a different
location, such as standing, desk, desktop, wall-mounted, through-glass, and     
outdoor kiosks. We anticipate that in the future, depending upon location, some 
TownPages kiosks may have attached peripherals, such as printers, credit card   
readers, and telephone handsets.                                                

Each kiosk offers users the same access to TownPages information and    
services as is available through standard Internet connections. However, a kiosk
user will be restricted to the TownPages information service and associated     
permitted Web sites of our business and government customers and, therefore,    
will not be able to freely "surf" the Web in public places.                     

STRATEGIC RELATIONSHIPS                                                         

We have developed, and intend to continue to seek to develop, strategic 
relationships with information providers, service organizations and businesses  
to generate additional traffic on TownPages, obtain additional local content,   
and establish a strong branded local presence in each covered community         
thoughout the United Kingdom.                                                   

TELEVISION AND RADIO                                                    

   As we commence our planned national roll-out in the United Kingdom, we will
increasingly seek to enter into co-promotion agreements with local television   
and radio stations. These arrangements generally will offer content sharing and 
co-promotion. We expect that we will either (a) assist any television or radio  
station with which it enters such an agreement to develop a multimedia Web site 
within TownPages, or (b) will incorporate that station's Web site into          
TownPages, while our strategic partner will offer promotion and a recognized    
brand within the market. We hope to receive significant on-air promotion from   
these television and radio stations that will increase brand awareness and drive
traffic to TownPages. In connection with the Winchester launch, we purchased a  
small number of radio spots, which ran for approximately two weeks, to advertise
TownPages on two FM channels which cover Hampshire county, and particularly     
Winchester. We will continue to purchase paid advertising in connection with    
product launches.                                                               

NEWSPAPERS                                                              

For similar reasons, we seek to enter into arrangements with regional   
newspapers in the communities which we service to engage in joint promotion of  
classified advertising in exchange for benefits such as reciprocal advertising, 
use of archived materials, and a daily news service. For example, we currently  
obtain daily and weekly news in exchange for online promotion of the HAMPSHIRE  
CHRONICLE, the local newspaper covering the Winchester, England area. Our       
management hopes to expand the number and nature of those arrangements to       
provide additional revenues and brand development opportunities for TownPages.  

LOCAL BUSINESS ORGANIZATIONS                                            

   We seek to enter into relationships with local and regional business groups
in order to obtain additional local content, facilitate introductions to local  
businesses, and associate the TownPages brand with organizations having a       
well-known, respected presence in the local communities. For example, we work   
with Business Link, a quasi-governmental organization in the United Kingdom     
established primarily to promote small businesses on a county by county basis,  
and with local Chambers of Commerce for these purposes. We are a member of the  
Winchester and the Southampton and Fareham Chambers of Commerce, and various    
industry and other smaller local chambers of commerce and other organizations   
such as Hampshire Ambassadors, a local organization for the promotion of        
Hampshire business, and Hampshire Business Link. We intend to expand our        
relationships with local organizations across England as we roll out the        
TownPages service.                                                              

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LOCAL AND REGIONAL GOVERNMENTS                                          

   Before entering any community, we seek the right, typically on an exclusive
basis and for an initial term of up to three years, to incorporate              
locally-focused information available through that local government into a      
commercial, locally-focused Internet information service. In return, we agree to
display that information on TownPages and to install a specified number of      
TownPages public information point kiosks in the community. For a fee, which    
will vary depending upon the size and complexity of the Web site, we will design
Web sites for local governments which either have no Web sites or want to       
upgrade their Web sites, or modify their Web sites to make them more easily     
useable through touch-screen kiosks. We also offer, for a fee, enhanced         
displays, placement of additional kiosks, and maintenance of the local          
government Web site. We will make alternative arrangements to obtain local      
content concerning a particular community if we are unable to reach agreement   
with a local government.                                                        

The local governments in the United Kingdom are called "councils." The  
smallest councils cover parishes. Larger councils cover towns or cities, and the
largest ones cover regions. There are approximately 470 local and regional      
councils in the United Kingdom, excluding smaller town councils and parish      
councils. The councils are quite powerful, and have a significant and pervasive 
influence in local business communities. In part, this is due to the fact that  
the councils covering towns, cities, and regions exercise at the local level    
many powers and perform many functions which are assigned separately to state   
and city governments in the United States.                                      

   As we prepare for the national roll-out of TownPages in the United Kingdom,
we have begun the process of negotiating arrangements with councils throughout  
the United Kingdom. As of January 31, 1999, we have entered into agreements with
Bracknell Forest Borough Council and St. Edmonsbury Borough Council, for initial
terms of three years and one year, respectively, to incorporate locally-focused 
information available through them into TownPages, to the exclusion of any other
commercial, locally-focused Internet information service. Under the terms of    
these contracts, we will install four and six kiosks in these communities,      
respectively. As of January 31, 1999, we are negotiating letters of intent,     
which we generally will not consummate until we receive funding for the         
installation of kiosks, with 14 other councils. Our experience to date is that  
many councils appear to desire to bring a service like TownPages into their     
communities.                                                                    

    We believe that exclusive relationships with councils will provide us with a
competitive advantage, not only in each community, but nationally if we achieve 
our goal to be the first to establish those relationships with a majority of the
councils. In turn, our management believes that each council benefits by making 
its information and other community information more readily accessible to the  
community. The TownPages relationship provides an additional local benefit      
because TownPages' easy-to-use touch-screen kiosks, which are conveniently      
located in publicly accessible locations, make the service widely available to  
everyone in the community, not only to those with access to, or knowledge of,   
computers or the Internet.                                                      

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RELATIONSHIPS WITH BUSINESSES WITH STRONG REGIONAL AND NATIONAL BRANDS  

Despite limited operations to date, while we were primarily engaged in  
prototype testing and development, approximately 400 businesses placed paid     
advertisements on TownPages as of December 31, 1998. We are seeking to expand   
the use of TownPages for advertising and other services, not only by small and  
mid-sized local businesses in the communities for which we have developed "local
pages," but also by large national and international concerns. Our management   
believes that support of the TownPages service by those companies will provide  
access to many additional users and also further strengthen and validate the    
TownPages brand, both in local communities and nationally in the United Kingdom.

    As of December 31, 1998, a total of eight TownPages kiosks were installed in
facilities operated by Sainsbury's and Tesco, the largest and second largest    
food retailers in the United Kingdom, South West Trains, the operator of rail   
services throughout southwest England, The Wessex Hotel, a Forte Hotel, King    
Alfred's College, Royal Hampshire County Hospital, and The Brooks Shopping      
Centre.                                                                         

  We recently conducted a successful test program with TicketLink, described
above, for delivery of online theatre information and facilitating ticket       
purchasing. We are currently conducting a test program with Property Sight, a   
United Kingdom Internet-based real estate listing service, for listing          
approximately 7,000 real estate properties for sale on the Internet. We intend  
to continue to develop strategic and other relationships with local and national
businesses to increase revenues, add content, generate additional traffic, and  
validate and strengthen the TownPages brand.                                    

PLANNED UNITED KINGDOM ROLL-OUT OF TOWNPAGES                                    

The linchpin of our strategy is to be the first service of our kind with
public information point kiosks to establish a national branded presence in the 
United Kingdom. Starting immediately upon the consummation of this offering and 
during the ensuing three years, we intend to roll out our service across the    
United Kingdom, expanding the TownPages database to cover, and installing       
approximately 3,450 kiosks in, substantially all of the major towns and cities  
in the United Kingdom.                                                          

For purposes of the rollout, we have divided the United Kingdom into 23 
regions. The regions (listed geographically rather than in roll-out order) are: 

1. SOUTH WEST                                                                   
2. MID SOUTH WEST                                                               
3. MID SOUTH EAST                                                               
4. SOUTH EAST                                                                   
5. BRISTOL                                                                      
6. HOME COUNTIES                                                                
7. EAST ANGLIA                                                                  
8. WALES                                                                        

9. LONDON                                                                       
10. BIRMINGHAM                                                                  
11. LEICESTER                                                                   
12. LIVERPOOL                                                                   
13. MIDLAND                                                                     
14. MANCHESTER                                                                  
15. NORTH MIDLANDS                                                              
16. SHEFFIELD                                                                   

17. LINCS/YORKSHIRE                                                             
18. CUMBRIA                                                                     
19. NEWCASTLE                                                                   
20. GLASGOW                                                                     
21. EDINBURGH                                                                   
22. NORTHERN SCOTLAND                                                           
23. NORTHERN IRELAND                                                            

The roll-out plan is designed to:                                       

( Introduce TownPages into the major population centers in the United   
Kingdom--London, Manchester, Birmingham and Glasgow--first, and then
    spread across the United Kingdom. We plan for TownPages to penetrate the
  four major metropolitan markets in the United Kingdom within the 18-24
month period after the completion of this offering, except that the 
  rollout in the London market, which is very large, is expected to take
approximately 30 months.                                            

( Achieve penetration of broadly separated geographic markets from the  
outset to support the "national" marketing strategy.                

( Benefit from developing brand awareness as TownPages coverage expands 
incrementally in and around each of the initially targeted markets. 

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We have initially focused on the United Kingdom because our management  
believes that the locally-focused information service we offer has particular   
value for the relatively concentrated population in the United Kingdom.         

SALES AND MARKETING                                                             

   Our marketing goal is to position TownPages as the United Kingdom's premier
branded free-use and paid-advertising, locally-focused information provider on  
the Internet. Our approach is to establish and strengthen both national and     
local branding with local service delivery which fulfills user and customer     
needs for locally-focused content and presence.                                 

Our management believes that the techniques used to educate users and   
customers in Winchester and Alton and establish the TownPages brand in those    
communities can be adapted to allow the development of an effective strategy in 
other markets of varying maturity. During our prototype testing and development 
operations to date, and our commercial roll-out of TownPages in Winchester in   
the third and fourth quarters of 1998, we advertised primarily in local and     
regional newspapers, publications, sales promotions and forums. We have also    
advertised with radio, bus, direct mailings, film trailer advertising, and      
telesales campaigns.                                                            

Our management generally intends for the service launch in a particular 
community to be a high-profile community event designed to arouse user interest 
in, and awareness of, the TownPages service. For example, in Winchester, the    
kick-off advertising campaign in late May 1998 commenced with a parade through  
the streets of Winchester and associated handing out of promotional items and   
leafleting. Leaflet drops in local newspapers and at kiosks sites,              
demonstrations at kiosk locations, press releases and film trailer advertising  
in local movie theaters followed.                                               

   The related business customer-oriented launch in Winchester was an event at
a local hotel presided over by the local Member of Parliament and attended by   
local businessmen and community figures. A direct mail campaign aimed at        
business customers, with follow-up telesales calls, followed. Press releases and
local advertisements in the local press and local government publications were  
also designed to encourage businessmen to advertise on the TownPages service.   

    A second advertising campaign in Winchester commenced in mid-September 1998.
Users were targeted by press releases, posters near kiosk sites, and            
competitions. To reach business customers, we did several direct mailings,      
engaged in a two-week radio campaign, and placed advertising on local buses and 
in certain business areas of the town. The third advertising campaign, commenced
in mid-November 1998 and was mainly designed to sell banner advertising to      
businesses, centered around telesales calls followed up by salesman visits to   
targeted businesses.                                                            

    We expect that the expansion of our locally-focused service will continue to
require extensive local advertisement to develop brand familiarity and encourage
initial sales of advertising to local businessmen. However, we plan to expand   
our regional and national advertising with the planned national roll-out of the 
TownPages service in the United Kingdom, and to increasingly emphasize radio and
television advertising.                                                         

OPERATIONS AND INFRASTRUCTURE                                                   

We have no manufacturing capacity and only limited equipment maintenance
capabilities. Consequently, we rely upon third parties for our equipment,       
including our kiosks, and for installation, repair, and maintenance. The kiosks 
are assembled from standard components available from a variety of suppliers. We
intend to enter more formal arrangements with third party providers of equipment
and installation, maintenance, and repair services in order to support the      
planned expansion of TownPages to cities and towns across the United Kingdom.   

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   We use licensed software site design tools to enable us to build customized
displays and Web sites for customers. The production process is currently       
managed at our headquarters location. Display and Web site creation follows a   
standard procedure.                                                             

In connection with constructing a TownPages "Local" home page to cover a
particular town or city, we must acquire basic data concerning businesses in the
community. The process starts with the purchase of a business listing for the   
locality, supplemented by business data obtained from the local government and  
various other groups. The list is converted into TownPages business categories  
during the process of loading the data into our contact management database. We 
use Goldmine software for our contact management database. Once loaded, the     
business data is available for our telemarketing organization to verify the     
existence and data concerning each business and validate the business category  
placement.                                                                      

We have nearly completed the process of synchronizing the TownPages     
database, with Goldmine as our user interface, across all the TownPages business
units, and ensuring easy access to the database by all of our customer contact  
personnel. The objective is to provide reliable management and updating of the  
database as automatically as possible. For example, if a business informs us    
that its telephone number has changed, the sales representative receiving the   
call is able to immediately make the change on Goldmine, resulting in the       
correction appearing on the live Web site automatically with no further human   
intervention the next day. Similarly, if the telesales division sells a         
mini-display ad for placement on TownPages, the mini-display appears            
automatically on the live Web site with no further human intervention within two
working days after the mini-display data has been inputted into Goldmine. The   
Goldmine system is also used to track sales of mini-displays, displays, links,  
higher value Web sites, advertising, and other products and services. To achieve
this, the underlying TownPages site database is synchronized on a daily schedule
with the Webserver database, so that the up-to-date business listings are       
available for display on the live Web site.                                     

Representatives in the field work with customers who wish to place      
advertisements or otherwise establish sites on TownPages to design their        
displays and sites and gather images and text. We are seeking to encourage      
customers to use templated displays and enhanced templated displays in order to 
facilitate more automatic entry of data into the TownPages database, as well as 
more rapid updating of displays and more sophisticated monitoring of consumer   
responses. Once content is collected, data entry personnel input the text, and  
graphic designers combine the text and scanned images to create custom displays 
and sites designed to reflect the nature and style of each customer. Once the   
display and Web site designers have completed their work, the display or Web    
site is checked for accuracy and published online after customer proofing. The  
entire process, from our receipt of content to putting a site online, takes     
approximately 2 days to complete in the case of a templated display, and        
approximately 1 week or more to complete in the case of a more elaborate Web    
site, depending on the size and complexity of the Web site. Management believes 
that the systems and processes we have developed to produce displays and Web    
sites allow us to create high quality, informative, interactive, multi-media    
displays and sites in a cost-effective and timely manner.                       

The core of the TownPages Web site is database driven, to facilitate the
planned national roll-out in the United Kingdom. When additional sections of    
TownPages are converted to service from the database, rather than a large       
collection of HTML pages, the TownPages service will operate more quickly and   
reliably. Also, the changeover to a data-driven structure will make it easier   
for us to expand the TownPages database as TownPages service is extended to     
cover each additional town or city. Third party sites are indexed within the    
TownPages search index by means of Verity Spider software we license, thereby   
further expediting the task of increasing the data accessible on the TownPages  
system.                                                                         

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COMPETITION                                                                     

    The markets for locally-focused, Internet-based, interactive information and
advertising content and related services are highly competitive, particularly in
markets in which Internet use is more established and commercialization is more 
advanced. Barriers to entry are relatively insubstantial. Our competitors       
include Internet-based services and traditional media.                          

Potential Internet-based competitors include companies and services     
organized specifically to provide locally-focused interactive content and       
services, such as CitySearch, a service of TicketMaster Online-CitySearch, Inc.,
Digital City, a service of Digital City, Inc., a company wholly owned by America
Online Inc. and Tribune Company, Sidewalk, a service of Microsoft Corporation,  
Zip2, a service operated by Zip2 Corporation, and Around Town, a service        
operated by WebTV Networks, Inc., which is owned by Microsoft Corporation. Other
services, such as GeoCities, TheGlobe.com, and Xoom, sponsor communities of     
personal Web sites, thereby creating audiences for advertisers which may be     
topically or geographically segregated. We also compete against search engine   
and other site aggregation services, such as City.Net, which is offered by      
Excite, Inc., Lycos City Guide, offered by Lycos, Inc., and Yahoo! Local,       
offered by Yahoo! Inc., which primarily serve to aggregate links to sites       
providing local content. Currently, none of these companies is conducting       
significant operations providing locally-focused information and advertisements 
generally aimed at towns and cities in the United Kingdom, but GeoCities        
recently opened an office in London, England. In addition, CitySearch is now    
offered in some locations, such as in New York City, through touch-screen       
kiosks.                                                                         

 In addition, services offered by media companies may compete with us. For
example, Cox Interactive Media and Knight-Ridder, Inc., as well as a number of  
telecommunications and cable companies and Internet service providers, such as  
SBC Communications Inc. (At Hand) and US West, Inc. (Dive-In), provide local    
interactive programming.                                                        

  United Kingdom-based companies, such as British Telecommunications plc (BT
Touchpoint), KDM International plc (County Web), Freepages plc (Scoot), Thomson 
Directories Ltd. (ThomWeb), and Yellow Pages, a division of British             
Telecommunications plc (Yell), and Time Out Group Ltd. (TimeOut.com) are        
competitors. British Telecommunications has tested its BT Touchpoint service    
which, like TownPages, was offered on touch-screen kiosks, and included         
community information.                                                          

ThomWeb, owned by Thomson Directories Ltd., is an Internet site enabling
users to access and search the Thomson Directories database by name,            
classification or heading. ThomWeb benefits from the well-established brand name
of Thomson Directories, which is reinforced by regular household door drops of  
free printed Thomson directories. ThomWeb carries extensive "Yellow Pages"--type
business listings. The service includes a "Local Information" section with      
certain basic information on approximately 120 towns and cities in the United   
Kingdom.                                                                        

   Another United Kingdom service, Yell, was launched in January 1996 as a Web
site produced by Yellow Pages, a division of British Telecommunications plc,    
featuring a United Kingdom online classified directory. Users are able to search
through a business listing of approximately 1.6 million businesses by business  
type, business name, or location. Yell is primarily a "Yellow Pages"--type      
business listings service, with some maps and links to Web sites of listed      
businesses.                                                                     

County Web is a service that offers certain business listings and       
advertisements, local and national news, weather information, and a "life-style"
section which includes items on property, cars, jobs, leisure, world links,     
sports, travel, television, radio and video. Information is organized on a      
county-by-county basis in England, Scotland and Wales and by town in certain    
areas.                                                                          

 Scoot is a service which provides classified and corporate information by
telephone and via the Internet. Scoot permits searches to locate businesses by  
business type, company name, and area/town. Scoot also offers a movie guide and 
a product guide which permits searches in the following categories: books,      
business to business, charity, computers & games, electrical goods, fashion,    
food & drink,                                                                   

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health & beauty, home & garden, kids stuff, law & finance, motoring, music &    
events, sport & fitness, travel, and video.                                     

   TimeOut.com is an online city guide which aims to cover the world's largest
cities. Each city guide includes ten sections: Living Guide, Accommodation,     
Sightseeing, Essential Information, Entertainment, Eating and Drinking,         
Shopping, Kids, Gay and Lesbian, and Web links.                                 

To management's knowledge, none of the foregoing United Kingdom-based   
services, other than BT Touchpoint, is delivered through touch-screen kiosks,   
and none of them appear to host or link to local governments.                   

There are also numerous niche competitors that may focus on a specific  
category or a geographic region and compete with specific content offerings     
provided by TownPages. For example, online services such as Top Jobs on the Net,
specializing in job management, professional, and technical job listings, and   
Property Sight, specializing in real estate listings, are active in the United  
Kingdom.                                                                        

 We may also compete with online services and other Web site operators, as
well as traditional media such as television, radio and print, for a share of   
advertisers' total advertising budgets. Some of these companies have introduced,
or may introduce in the future, online services which mainly act as an adjunct  
to the primary traditional media information delivery system.                   

We believe that the principal competitive factors in out markets include
depth, quality and comprehensiveness of content, ease of use, distribution,     
search capability, service reliability and accessibility, and brand recognition.
Many of our current and potential competitors have substantially greater human  
and financial resources, experience, and brand name recognition than us, and may
have significant competitive advantages through other lines of business and     
existing relationships. Furthermore, these competitors may introduce new        
Internet products and services addressing these markets in the future. There can
be no assurance that our competitors will not develop services that are superior
to our services or that achieve greater market acceptance than our offerings.   

There can be no assurance that we will be able to successfully compete  
against our current or future competitors. Competition could have a material    
adverse effect on our ability to consummate exclusive arrangements with councils
or enter into strategic business alliances, or on its business, financial       
condition and results of operations. Furthermore, as a strategic response to    
changes in the competitive environment, we may make certain pricing, service or 
marketing decisions or enter into acquisitions or new ventures that could have a
material adverse effect on our business, financial condition and results of     
operations.                                                                     

INTELLECTUAL PROPERTY                                                           

   Our success and ability to compete depends in part on the protection of our
original content for the Internet and on the goodwill associated with our       
trademarks, trade names, service marks and other proprietary rights. We rely on 
copyright laws to protect the original content that we develop for the Internet.
In addition, we rely on trademark laws to provide additional protection for the 
appearance of our Web site. A substantial amount of uncertainty exists          
concerning the application of copyright laws to the Internet, and there can be  
no assurance that existing laws will provide adequate protection for our        
original content. In addition, because copyright laws do not prohibit           
independent development of similar content, there can be no assurance that      
copyright laws will provide any competitive advantage to us.                    

    We have registered "TownPages," "Town Pages," and "Town-Pages" as trademarks
in the United Kingdom. We also assert common law protection on certain names and
marks that we have used in connection with our business activities.             

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Our management may explore opportunities in other markets in Europe and 
elsewhere from time to time. If we pursue any opportunities in those markets, we
may incur additional risks because some foreign jurisdictions offer less        
protection for intellectual property than jurisdictions like the United Kingdom,
where we currently do business, or the United States.                           

We have registered the following Internet domain names with the InterNIC
registration service:                                                           

                                                                [Download Table]
                                                     
townpagesnet.com   townpagesplc.com   townpagesuk.com
townpages.co.uk    townpagesus.com    townpageseu.com
townpages.org                                        

However, other companies have registered domain names that may be       
confusingly similar to our domain name with the result that our business,       
operations, and financial condition could be materially adversely affected by   
the operations of those other companies. For example, Omnisys Corporation owns  
and operates a Web site at www.townpages.com through which it hosts and provides
links to Web sites for various Internet Service Providers and content providers,
as well as related services. Cape Coral, Florida, Fort Myers, Florida, Amarillo,
Texas, and San Antonio, Texas, are the four communities currently served by Web 
sites through this service, which is called Community Web Pages. To our         
management's knowledge, this service is not currently being utilized to compete 
with us in the United Kingdom or Europe. Alton.Org, the registered owner of     
www.townpages.net, owns a Web site which is intended to provide various         
information concerning Alton, England and surrounding villages. Alton was the   
site for our initial prototype testing. Locally-focused information concerning  
Epsom and Ewell, small communities in England, is provided at a Web site at     
www.epsom.townpage.co.uk. That Web site was created by Internetworks Ltd., which
states on the site that it is an Internet service company that can provide a    
"TownPage" for any other town which engages its services. This site is now      
linked to TownPages.                                                            

  We will rely on trade secret and copyright laws to protect the proprietary
technologies that we may develop to manage and improve our Web site and         
advertising services, but there can be no assurance that those laws will provide
us with sufficient protection, that others will not develop technologies that   
are similar or superior to ours, or that third parties will not copy or         
otherwise obtain and use our technologies without authorization. We have no     
patents or patent applications filed or pending.                                

   In addition, we rely on certain technology licensed from third parties, and
may be required to license additional technology in the future, for use in      
managing our Web site and providing related services to users and advertising   
customers. There can be no assurance that these third party technology licenses 
will be available or will continue to be available to us on acceptable          
commercial terms or at all. The inability to enter into and maintain any of     
these technology licenses could have a material adverse effect on our business, 
financial condition and operating results.                                      

Policing unauthorized use of our proprietary technology and other       
intellectual property rights could entail significant expense and could be      
difficult or impossible, particularly given the global nature of the Internet   
and the fact that the laws of other countries may afford us little or no        
effective protection of our intellectual property. In addition, there can be no 
assurance that third parties will not bring claims of copyright or trademark    
infringement against us or claim that our use of certain technologies violates a
patent. We anticipate an increase in patent infringement claims involving       
Internet-related technologies as the number of products and competitors in this 
market grows and as related patents are issued. Further, there can be no        
assurance that third parties will not claim that we have misappropriated their  
creative ideas or formats or otherwise infringed upon their proprietary rights  
in connection with our Internet content. Any claims of infringement, with or    
without merit, could be time consuming to defend, result in costly litigation,  
divert management attention, require us to enter into costly royalty or         
licensing arrangements or prevent us from using important technologies or       
methods, any of which could have a material adverse effect on our business,     
financial condition or operating results.                                       

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GOVERNMENT REGULATION                                                           

   We are and will be subject to laws and regulations applicable to businesses
generally in the countries in which we operate. Currently, there are relatively 
few laws and regulations directly applicable to access to and commerce on the   
Internet. However, due to the increasing popularity and use of the Internet, it 
is possible that a number of laws and regulations may be adopted, or that       
existing laws or regulations may be applied differently, with respect to the    
Internet, covering issues such as user privacy, pricing, and characteristics and
quality of products and services. For example, the European Union has adopted a 
Directive on Privacy, effective on October 24, 1998. The Directive establishes  
minimum standards for the collection and use of personal identifying information
in the European Union, and prohibits the transfer of this information to        
countries whose privacy standards are deemed inadequate. Any such laws and      
regulations could hinder growth in use of the Internet generally, and decrease  
the acceptance of the Internet as a communications and commercial medium, and   
could thereby have a material adverse effect on our business, results of        
operations, and financial condition.                                            

In addition, several telecommunications carriers are seeking to have    
telecommunications over the Internet regulated by agencies such as the Federal  
Communications Commission in the United States in the same manner as other      
telecommunications services. Local telephone carriers, such as Pacific Bell in  
the United States, have petitioned the FCC to regulate Internet service         
providers and online service providers in a manner similar to long distance     
telephone carriers and to impose higher access fees on the Internet service     
providers and online service providers. The costs of communicating on the       
Internet could increase substantially as a result of any such regulation in the 
United States, the United Kingdom, or elsewhere, potentially slowing the growth 
in use of the Internet.                                                         

   We may be subject to various government laws and regulations, in the United
Kingdom and elsewhere, that regulate advertising in media, which may include the
Internet. Those laws and regulations typically require advertisers and          
advertising agencies to have substantiation for advertising claims before       
disseminating advertisements. Such laws and regulations can prohibit the        
dissemination of false, deceptive, misleading, and unfair advertising, and may  
grant certain governmental agencies enforcement powers to impose and seek civil 
penalties, consumer redress, injunctive relief and/or other remedies.           

   The placement and operation of our kiosks are also subject to various local
zoning and similar laws and regulations which could delay, preclude, or increase
the cost of kiosk installation and operation.                                   

INSURANCE                                                                       

We believe that our insurance coverage for our business is generally in 
accordance with industry standards and is adequate in light of our business and 
the risks to which we are subject, except that we do not presently maintain     
"errors and omissions" insurance. We also currently do not maintain key man life
insurance, although we plan to obtain such insurance upon completion of this    
offering. Any failure to maintain adequate insurance could have a material      
adverse effect on our business and financial condition.                         

EMPLOYEES                                                                       

We have 21 full-time employees as of December 31, 1998, of whom 9 are   
design, production and technical personnel, 9 are sales and marketing personnel 
and 3 are general, administrative and executive management personnel. Two of our
executives, Mr. Richard Smith, our interim Chief Financial Officer, and Mr.     
Barry Charles, our Vice President, are employed by us on a part-time basis. None
of our employees is covered by a collective bargaining agreement and our        
management considers relations with employees and consultants to be good. We are
presently employing two subcontractors to                                       

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perform a substantial part of the four Web site design contracts that currently 
account for a large portion of our revenues. We expect that we may subcontract  
work from time to time in the future when the need arises, but we intend to     
increase our own staff to handle projects as circumstances permit.              

FACILITIES                                                                      

Our executive office are located at 11 Market Square, Alton, Hampshire, 
England GU34 1HD, United Kingdom, where we occupy approximately 242 square      
meters (approximately 2,540 square feet) of office space under a lease assigned 
to it by Westbrook Property Developments Ltd. for L1. We pay approximately      
L36,000 ($59,860) per year in rent under the lease. Westbrook Property          
Developments Ltd. leased the premises from Lloyds Bank plc. in 1989 for a 25    
year term. Prior to the assignment, Westbrook licensed the space to us. The     
lease terminates on September 28, 2014. Andrew Neville Lyndon-Skeggs, our       
President, is the founder, Managing Director, and the beneficial owner of all of
the shares of Westbrook Property Developments Ltd. See "Related Party           
Transactions."                                                                  

While we presently have no other facilities, we anticipate that in      
connection with the planned expansion of our operations we will add facilities  
as appropriate.                                                                 

LEGAL PROCEEDINGS                                                               

 We are not involved in any pending or, to our knowledge, threatened legal
proceedings. We may from time to time become a party to various legal           
proceedings arising in the ordinary course of business.                         

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS                                                

  Our executive officers and directors, and their ages at December 31, 1998,
are as follows:                                                                 

                                                        [Enlarge/Download Table]

NAME                                  AGE                                   POSITIONS                              
------------------------------------  ---     ---------------------------------------------------------------------
                                                                                                                   
Viscount Edward James Wingfield                                                                                    
  Lifford...........................      49  Chairman of the Board and Director                                   
Andrew Neville Lyndon-Skeggs........      49  President, Managing Director and Chief Executive Officer             
Richard J. Smith....................      51  Chief Financial Officer and Director                                 
Barry B. J. Charles.................      60  Vice President and Director                                          
Kevin R. Leech......................      55  Director                                                             
Nigel E. C. Talbot-Ponsonby.........      52  Director                                                             
Howard E. Flight, M.P...............      50  Director                                                             
Simon J. Ward.......................      54  Director                                                             

    Our amended Articles of Association provide that at the first annual general
meeting of our shareholders, all of our directors shall retire from office. In  
English companies, when a director ceases to be a director, whether voluntarily 
or otherwise, we say that the director has "retired." Our directors are subject 
to retirement by rotation. At every one of our subsequent annual general        
meetings, one-third of our directors who are subject to retirement by rotation  
or, if their number is not three or a multiple of three, the number nearest to  
one-third of our directors, shall retire from office. If there is only one      
director who is subject to retirement by rotation, that director shall retire.  
Subject to the provisions of the U.K. Companies Act 1985, the directors to      
retire by rotation shall be those who have been longest in office since their   
last appointment or retirement. As between persons who became or were last      
reappointed directors on the same day, those to retire shall be determined by   
lot unless they otherwise agree among themselves. If a director retires by      
rotation and the vacancy is not filled by the shareholders, the retiring        
director shall be deemed to have been reappointed if he is willing to be        
reappointed. However, the director in that situation shall not be deemed to be  
reappointed, if the shareholders determine not to fill the vacancy or a         
resolution to reappoint the director is voted upon and defeated. Our            
shareholders holding a majority of our ordinary shares may remove any director  
from office at any time, with or without cause.                                 

  We have granted to the representative of the underwriters the right, for a
period of 5 years from the closing of the offering, to nominate a designee of   
the representative for election to our board of directors. The representative   
has not yet exercised its right to designate such a person. If the              
representative elects not to exercise this right, then the representative may   
designate one person to attend meetings of our board of directors.              

BACKGROUND INFORMATION CONCERNING EXECUTIVE OFFICERS AND DIRECTORS              

VISCOUNT EDWARD JAMES WINGFIELD LIFFORD. Lord Lifford is an investment  
manager and has worked on behalf of a wide range of clients over the past       
twenty-five years. In 1990 Lord Lifford was affiliated with the firm Neilson    
Cobbold, where he managed funds for clients. That company was acquired by       
Rathbone Bros. in 1996. He is now a director of Rathbone Bros. and is           
responsible for managing several billion pounds of discretionary money both in  
the United Kingdom and internationally. He is also a director of City of        
Winchester Investments plc and Winchester Cottage Improvement Society plc. Lord 
Lifford joined us in December 1998 as chairman of our board of directors.       

   ANDREW NEVILLE LYNDON-SKEGGS. Mr. Lyndon-Skeggs was a founder of Town Pages
UK Limited in 1995 and has served as President and Managing Director of that    
company since September 1995 and of TownPagesNet.com plc since our formation in 
1998. He graduated from Cambridge University with a degree in Land Economy in   
1970, and has also received a Master of Arts degree, with highest honors, from  
Cambridge. From 1970 to 1972, Mr. Lyndon-Skeggs worked as a commercial property 
negotiator                                                                      

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for Savills. He then obtained a position with Trafalgar House plc where he      
undertook commercial and residential property developments. In 1978 Mr.         
Lyndon-Skeggs took a position with Wates Developments, working on residential   
developments in central London. In 1981, Mr. Lyndon-Skeggs founded Westbrook    
Property Developments Ltd., a company engaged in commercial, healthcare and     
residential developments. He remains the Managing Director of that company,     
although daily management is now handled by a Project Manager. Mr. Lyndon-Skeggs
is responsible for our overall leadership and management.                       

RICHARD J. SMITH. Mr. Smith has served as our interim Chief Financial   
Officer and as a director since December 1998. Mr. Smith is a Fellow of the     
Association of Chartered Certified Accountants, qualifying in 1970. In 1972, he 
moved to Jersey (Channel Islands) and after working as an audit manager for     
three years moved to Hambros Channel Islands Trust Corporation as their         
accountant. In 1978, he took a position as Finance Controller with Avis Channel 
Islands car rental and motor dealership operations. After the disposal of those 
businesses by Avis, he became Chief Executive for the new private owner. In 1986
he moved back into the finance industry as Deputy Finance Manager for Save &    
Prosper in Jersey, Channel Islands, a Robert Fleming fund management subsidiary.
Since 1988, Mr. Smith has acted as a Finance Director for Kevin R. Leech's      
portfolio of investments.                                                       

BARRY B. J. CHARLES. Mr. Charles is trained as an electronics engineer. 
After working as a design engineer, he joined the Radio Corporation of America  
in 1965, where he held a number of positions in sales, marketing and executive  
management, including a European assignment at RCA's operations in Belgium. In  
1983, Mr. Charles became President of Pacesetter Electronics International,     
Inc., an international distributor of electronic components and systems with    
operations in North America, the United Kingdom, Australia and New Zealand. In  
1986, this group was sold to Eurodis Electron plc (formerly Electron House plc),
a United Kingdom company listed on the London Stock Exchange and Mr. Charles    
joined their Board of Directors. Eurodis is a large, pan-European distributor of
electronic components and systems. Mr. Charles was named Group Managing Director
of Eurodis in 1990, Group Chief Executive of Eurodis in 1993 and Vice Chairman  
(semi-retired) of Eurodis in 1998. Mr. Charles joined us in December 1998 as a  
Vice President and director.                                                    

    HOWARD E. FLIGHT, M.P. In 1971, Mr. Flight joined the firm N.M. Rothschild &
Co. Ltd as an investment advisor. In 1977, he joined Wardley Ltd. (the Hong Kong
Bank's Merchant Bank). In 1979, he joined Guiness Mahon, becoming a director in 
1983. In 1987, he became Joint Managing Director of Guiness Flight on its       
formation where he is responsible for the company's currency and fixed interest 
operations, for business development in India, the United States institutional  
markets and for the private client business. Mr. Flight entered Parliament as   
the Conservative M.P. for Arundel & South Downs in May 1997. In 1998, Guiness   
Flight merged with Investec Asset Management and Mr. Flight became the Joint    
Chairman of Investec Guiness Flight. Mr. Flight received his MBA degree from the
University of Michigan. Mr. Flight joined us in December 1998 as a director.    

   KEVIN R. LEECH. Mr. Leech is the Executive Chairman of ML Laboratories plc,
a United Kingdom company listed on the London Stock Exchange which is engaged in
the research and development of ethical pharmaceuticals and related products. He
is the co-founder of ML and controls 53% of its equity. He is also Executive    
Chairman of Queensborough Holdings plc, a United Kingdom company listed on the  
London Stock Exchange whose principal activities are in the leisure sector, and 
of which he owns 29.7%. In addition, Mr. Leech is a director and principal      
shareholder of numerous privately-owned companies resulting from his role as a  
provider of private venture capital. The activities of the companies are varied 
and include other leisure and technology-related companies, including           
topjobs.net plc. See "Related Party Transactions." Mr. Leech is also the        
beneficial owner, directly or indirectly, of Glen Investments Limited and of    
Raven Ventures Limited, both of which are private investment companies. See     
"Related Party Transactions." In October 1998, Mr. Leech was awarded an honorary

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Doctorate of Laws degree from the University of Manchester. Mr. Leech joined us 
in December 1998 as a director.                                                 

NIGEL E.C. TALBOT-PONSONBY. Mr. Talbot-Ponsonby is a Fellow of the Royal
Institution of Chartered Surveyors having qualified in the United Kingdom in    
1974. He then joined the firm of Strutt and Parker, Consultant Surveyors, where 
he specialized in Estate Business Management and the leisure industry sector. He
subsequently joined Humberts, Chartered Surveyors, in Lincolns' Inn Fields,     
London to establish their new joint venture vehicle, Humberts Landplan, with    
Williams & Glyns Bank Ltd., specializing in tax planning and the leisure sector.
He was a partner in Humberts for 16 years, subsequently becoming an equity      
partner and co-founded Humberts Leisure. In 1991, he led a management buy-out of
the leisure division's consultancy business using city funding to create        
Humberts Leisure Limited, International Leisure Business Specialists, which now 
operates throughout the United Kingdom and Europe and of which he is Executive  
Chairman. Mr. Talbot-Ponsonby joined us in December 1998 as a director.         

 SIMON J. WARD. Mr. Ward became qualified as a chartered accountant in the
United Kingdom in 1968. He joined the Middle East branch of Ernst & Young and   
became a partner in 1974 where he worked in East Africa, Kuwait, Saudi Arabia   
and the United Arab Emirates. He returned to the United Kingdom in 1988 and     
established the firm Cuthbert Ward in 1991, which firm was later merged with    
Fellowes and Co. to form CW Fellowes Limited. CW Fellowes Limited served as the 
independent business advisor of Town Pages UK Limited from 1995 to 1997. Mr.    
Ward specializes in advising growing businesses particularly in an international
environment. Mr. Ward joined us in December 1998 as a director.                 

BACKGROUND INFORMATION CONCERNING CERTAIN KEY EMPLOYEES                         

   JAMES WILKINSON. Mr. Wilkinson has served as our Vice President-Information
Technology since December 1997. He received a 1(st) class honors degree in      
Applied Mathematics from Dublin University in 1974. He is a professional        
analyst/programmer with almost 25 years of high and low level software design   
experience. From September 1974 through December 1997, he was employed by       
International Business Machines, Inc. in various programming, software design,  
IBM PC system architecture and product development team leader capacities,      
including work on various IBM PC display adapters and video device drivers.     
Consequently, he has a great deal of experience with and knowledge of PC display
adapters, PC hardware, PC architecture, small systems architecture, operating   
systems, programming techniques and programming languages.                      

ALAN SMITH. Mr. Smith has served as our Commercial and Councils Manager 
since November 1997. He received a Retail degree from Millbank College,         
Liverpool, England, in 1971, and a Retail degree in Business Management from    
Halton, Cheshire, England in 1976. Mr. Smith was employed by the Journal of     
Commerce in Liverpool, England from 1975 to 1980, and by Link House Magazines,  
publishers of various weekly and monthly periodicals in the United Kingdom, from
1980 to 1985. In each case, he progressed from an account manager position to a 
position as sales manager responsible for several publications. Mr. Smith       
operated his own advertising and public relations agency from 1988 to 1994, and 
a business and marketing consultant business from 1994 to 1996. Mr. Smith was a 
consultant to The Corporate Net Ltd., presently known as topjobs.net plc, a     
company which owns and operates a Web site offering recruitment advertising in  
the United Kingdom, Ireland, and Switzerland, from July 1996 to October 1996. In
November 1996, Mr. Smith became General Manager of The Corporate Net Ltd., and  
in February 1997 he became Commercial Manager, in which capacity he was         
responsible for setting up exclusive marketing programs with America OnLine,    
Riley Advertising, and others.                                                  

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COMMITTEES OF THE BOARD OF DIRECTORS                                            

   On December 15, 1998, our board of directors established an audit committee
and a compensation committee. The audit committee, initially comprised of       
Messrs. Flight, Leech, Lifford, Talbot-Ponsonby, and Ward, has responsibility   
for, among other things, the planning and review of our annual and periodic     
reports and accounts and the involvement of our auditors in that process,       
focusing particularly on compliance with legal requirements and accounting      
standards and the rules of the Amex, the Commission, and the United Kingdom, and
the establishment of an effective system of internal financial controls. The    
audit committee makes recommendations to our board of directors regarding the   
independent auditors to be nominated for ratification by our shareholders and   
those other matters, but the ultimate responsibility for those matters remains  
with our board of directors. The compensation committee, which is initially     
comprised of Messrs. Flight, Leech, Lifford, Talbot-Ponsonby, and Ward, will    
recommend to our board of directors compensation plans and arrangements,        
including awards of any stock options, with respect to our executive officers,  
directors, and key personnel. Our board of directors does not currently have and
does not currently intend to establish an executive committee or a nominating   
committee, as those functions are to be performed by our entire board of        
directors.                                                                      

COMPENSATION OF DIRECTORS FOR ATTENDANCE AT MEETINGS                            

  We expect to enter into agreements with our independent directors prior to
the consummation of this offering. The agreements will provide that each        
independent director other than Viscount James Lifford will be paid L6,000      
($9,977) per year for attending all of the meetings of our board of directors.  
Viscount James Lifford is paid L12,000 ($19,954) per year to serve as our       
chairman. Our executive directors, who are also our employees, will receive no  
cash compensation for serving on the board of directors. All directors are      
reimbursed for their reasonable expenses incurred to attend meetings of our     
board. We anticipate that our board of directors will hold regularly scheduled  
meetings quarterly.                                                             

DIRECTORS' INTERESTS                                                            

Other than as disclosed under "Principal Stockholders" and under        
"Management--Option Grants," none of our directors has any interest in our      
issued share capital which is required to be notified to us under Section 324 or
Section 328 of the U.K. Companies Act 1985, or is required under Section 325 of 
the U.K. Companies Act 1985 to be entered into the register referred to in that 
Section; nor are there any of those interests of any person connected with any  
director within the meaning of Section 346 of the U.K. Companies Act 1985 the   
existence of which is known to, or could with reasonable diligence be           
ascertained by, that director. Mr. Andrew Neville Lyndon-Skeggs and Mr. Kevin R.
Leech each have material transactions with us in addition to their status as    
directors or officers. See "Related Party Transactions" for a discussion of     
those transactions. Our officers and directors are paid certain amounts for the 
performance of their duties. See "Management-- Compensation of Directors for    
Attendance at Meetings; Employment Agreements."                                 

EXECUTIVE COMPENSATION                                                          

 The following table presents information relating to compensation awarded
to, earned by or paid to our Chief Executive Officer. He was our only executive 
officer whose compensation exceeded L60,000 ($99,768) during our fiscal year    
ended December 31, 1998.                                                        

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SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                 ANNUAL COMPENSATION                                
                                  ----------------------------------------------------------------------------------
                                                                                                                    
                                    YEAR ENDED                                                      OTHER ANNUAL    
NAME AND PRINCIPAL POSITION        DECEMBER 31,           SALARY               BONUS ($)            COMPENSATION    
--------------------------------  ---------------  ---------------------  --------------------  --------------------
Andrew Neville Lyndon-Skeggs,...          1998       L65,000  $  108,082     L--     $  --         L7,000  $  11,640
President and Chief Executive                                                                                       
  Officer                                                                                                           

The aggregate value of benefits to be reported under the "Other Annual  
Compensation" column did not exceed the lesser of L30,070 ($50,000) or 10% of   
the total of annual salary and bonus reported for Mr. Lyndon-Skeggs. These      
amounts do not include amounts expended by us for automobiles made available to 
our officers, expenses reimbursed to officers (including business travel,       
professional and business association dues and expenses) and other benefits     
commonly reimbursed or paid by companies in the United Kingdom.                 

    The aggregate compensation paid to all persons who served in the capacity of
director or executive officer during our fiscal year ended December 31, 1998 (8 
persons) was approximately L65,000 ($108,082).                                  

EMPLOYMENT AGREEMENTS                                                           

 We intend to enter into new employment agreements with certain of our key
employees prior to the effective date of the registration statement of which    
this prospectus is a part. Our management anticipates that each of these        
employment agreements will be for a one year term or less, renewable by mutual  
agreement of the parties thereto, and that the employment agreements will       
provide, among other things, that each of the employees party thereto shall     
provide services to us on a full-time basis. The agreements shall contain       
post-termination restrictive covenants relating to non-competition with us,     
non-solicitation of our customers, non-dealing with our customers and           
non-solicitation of our suppliers and employees. In addition, each employment   
agreement shall contain an express obligation of confidentiality in respect of  
our trade secrets and confidential information and provide for us to own any    
intellectual property rights created by the executives in the course of their   
employment.                                                                     

 Pending negotiation, execution, and delivery of those agreements, each of
our officers and key employees has entered into an agreement, cancelable by     
either party on short notice (generally 30-90 days' notice), to provide services
to us. Under the terms of his employment agreement, Mr. Andrew Neville          
Lyndon-Skeggs, our President and Managing Director, is paid L80,000 ($133,024)  
base salary per year plus a bonus of L20,000 ($33,256) per year.                

Mr. Richard J. Smith and Mr. Barry B. J. Charles, our interim Chief     
Financial Officer and our Vice President, respectively, only devote a small     
portion of their working hours each week to our business. Their salaries are    
L20,000 ($33,256) per year and L30,000 ($49,884) per year, respectively. Town   
Pages is currently searching for a new, full-time Chief Financial Officer. There
can be no assurance that a full-time Chief Financial Officer will be hired prior
to the closing of this offering. Mr. Andrew Neville Lyndon-Skeggs holds the top 
managerial position of another company which he owns, but he devotes            
substantially all of his working hours to our business. Because of their        
involvement in other businesses, situations could arise in the future which     
could result in conflicts of interest for certain of our executive officers and 
directors, but we do not presently anticipate that any such events to occur in  
the foreseeable future. Certain of our officers and directors will benefit from 
the completion of this offering, either because they are existing shareholders  
or because of other transactions with us. See "Risk Factors" and "Related Party 
Transactions."                                                                  

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  Each of our executive officers has the right to participate in the various
share option schemes and plans described below. If any of our directors is      
removed from office without cause on less than six months notice, the director  
will continue to receive fees for attending directors' meetings for the balance 
of the six months.                                                              

EXECUTIVE SHARE OPTION PLAN                                                     

   We operate a share option plan, The Town Pages Executive Share Option Plan,
under which our directors and employees may acquire ordinary shares. Awards     
under the plan are not pensionable and the plan is not designed to be a plan    
approved by the U.K. Inland Revenue. A summary of the plan follows.             

    NUMBER OF ORDINARY SHARES. An aggregate of 10% of the ordinary shares issued
and outstanding from time to time may be issued or issuable under the plan and  
all other employee share schemes or plans which may be established by us in the 
future. For the purposes of this limit, options which lapse or ordinary shares  
held in treasury are not taken into account. Upon completion of this offering,  
an aggregate of 700,000 ordinary shares shall be issuable under the plan.       

   ELIGIBILITY. Full-time executive directors and all of our employees and any
of our subsidiaries (designated by the directors) who are not within two years  
of their normal retirement date are eligible to participate in the plan.        

  GRANT OF OPTIONS. Options will be granted by our compensation committee, a
majority of which consists of independent directors. Options will normally only 
be granted concurrently with or within 42 days of this offering or the          
announcement of our annual or interim results.                                  

    PERFORMANCE CONDITIONS. The compensation committee may grant options subject
to performance conditions which are intended to link the exercise of options to 
sustained improvements in our underlying financial performance. It is not       
intended that options granted concurrently with this offering will be granted   
subject to performance conditions.                                              

  OPTION PRICE. Options will be granted at option prices to be determined by
the compensation committee, which, excluding options granted concurrently with  
this offering, shall not be a less than 100% of the fair market value of the    
ordinary shares on the date of grant. Fair market value is defined as a value   
for the ordinary shares based on the closing price of the ADSs offered hereby,  
as traded on the Amex or the other principal U.S. market for our securities, on 
the business day immediately preceding the date of grant. Where ordinary shares 
are to be subscribed on the exercise of an option, the option price cannot be   
less than the nominal value of an ordinary share.                               

    LIMITATION ON EMPLOYEE PARTICIPATION. An employee's participation is limited
so that, excluding any options granted concurrently with this offering, the     
aggregate price payable for ordinary shares under option in any ten-year period 
does not exceed a multiple of ten times the employee's remuneration. This limit 
applies to options granted under the plan and any other executive share plan    
established by us or associated companies.                                      

 EXERCISE OF OPTIONS. Options will normally be exercisable, subject to any
performance condition being satisfied and the optionholder remaining a director 
or employee of ours or of any of our subsidiaries, on the third anniversary of  
grant. Options may also be exercised early in certain circumstances, for        
example, upon an optionholder ceasing to be an employee due to death, injury,   
ill health, disability, redundancy, retirement, or following our sale of a      
subsidiary or division in which the optionholder works, or in certain           
circumstances where the optionholder is transferred to work overseas, or in the 
event of a takeover or winding up of our company. Options are not transferable  
and may only be exercised by the persons to whom they are granted, except that  
in the case of the death of the optionholder, options may be transferred to his 
or her heirs or estate.                                                         

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EXCHANGE OF OPTIONS. In the event we are taken over, optionholders may, 
subject to the consent of the acquiring company, exchange their options for     
options for ordinary shares or shares in the acquiring company, or other        
associated compensation in the acquiring company.                               

ISSUES OF ORDINARY SHARES. Ordinary shares issued upon the exercise of  
options will rank equally with ordinary shares of the same class in issue on the
date of allotment except in respect of rights arising by reference to a prior   
record date.                                                                    

VARIATION IN SHARE CAPITAL. Options may be adjusted following certain   
variations in our share capital, including a capitalization or rights issue.    

   TERMINATION OF THE PLAN. No options may be granted under the plan after the
tenth anniversary of the adoption of the plan.                                  

AMENDMENTS. The directors may amend the plan, except that amendments    
relating to eligibility to participate in the plan, the limitations on the      
benefits of optionholders under the plan, the number of ordinary shares which   
may be issued under the plan, and the basis for determining the exercise price  
of options may not be made to the advantage of optionholders without prior      
approval of our shareholders in a general meeting, except for minor amendments  
relating to tax and administrative matters. Additionally no amendments which    
would adversely effect the rights of existing optionholders may be made without 
their consent.                                                                  

OPTION GRANTS.                                                                  

  Upon the commencement of this offering, we plan to issue to certain of our
officers, directors and employees options to purchase an aggregate of 190,000 of
our ordinary shares, exercisable at the initial public offering price of the    
ADSs. The following table lists the names, executive offices, and number of     
options to be granted upon the commencement of this offering to our executive   
officers and directors:                                                         

                                                        [Enlarge/Download Table]

                                                                                                     NUMBER OF   
NAME OF OPTION HOLDER                                           OFFICE                            ORDINARY SHARES
------------------------------------  ----------------------------------------------------------  ---------------
                                                                                                                 
Viscount Edward James Wingfield                                                                                  
  Lifford...........................  Chairman of the Board and Director                                 7,500   
Andrew Neville Lyndon-Skeggs........  President, Managing Director and Chief Executive Officer          70,000   
Richard J. Smith....................  Interim Chief Financial Officer and Director                      20,000   
Barry B.J. Charles..................  Vice President and Director                                        5,000   
Kevin R. Leech......................  Director                                                           5,000   
Nigel E. C. Talbot-Ponsonby.........  Director                                                           5,000   
Howard E. Flight, M.P...............  Director                                                           5,000   
Simon J. Ward.......................  Director                                                           5,000   

 All of the options granted are for a period of ten years and are normally
exercisable only after three years from the date of grant provided that the     
holder's continuous full-time employment with us does not terminate during that 
three year period. Earlier exercise of these options is permitted in limited    
circumstances (See "Executive Share Option Plan" above).                        

PENSION PLAN.                                                                   

  We sponsor a defined contribution pension plan for our directors, officers
and employees. All employees are eligible to join the plan and can make         
contributions into the plan. At the discretion of our board of directors, we    
contribute amounts up to 10% of participating employees' annual compensation    
into the plan. Total contributions for all employees for the period ended       
December 31, 1996, and the years ended December 31, 1997 and December 31, 1998  
were zero, L9,429 ($15,679), and L19,327 ($32,137), respectively. The plan is   
administered by Pembroke Asset Management Ltd., Southampton, United Kingdom.    

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BOARD ACTION AND POWERS                                                         

Our amended Articles of Association in effect upon completion of this   
offering provide that, unless otherwise determined by ordinary resolution, our  
board of directors shall consist of not less than two nor more than ten members.

 Except as noted below, the board of directors may at any time appoint any
person to be a director either to fill a vacancy or as an additional director,  
provided that the number of directors does not exceed ten. Any person so        
appointed by the board of directors shall hold office only until the next annual
general meeting of shareholders and shall then be eligible for election by the  
shareholders but shall not be taken into account in determining the number of   
directors who are to retire by rotation at such meeting as set out below. At    
each annual general meeting of shareholders, one-third of the directors (or, if 
their number is not a multiple of three, the number nearest to but not greater  
than one-third) shall retire from office by rotation. The directors to retire by
rotation shall include (as far as may be necessary to obtain the number         
required) any director who wishes to retire and not to offer himself for        
reelection, and shall then include those members who have served the longest on 
the board of directors. A retiring director shall be eligible for immediate     
re-election.                                                                    

Any provisions of the U.K. Companies Act 1985 or other United Kingdom   
statutes applicable to us which would have the effect of rendering any person   
ineligible for appointment as a director or liable to vacate office as a        
director on account of his having reached any specified age or of requiring     
special notice or any other special formality in connection with the appointment
or election of any director over a specified age, shall not apply to us.        

    Directors shall not be required to hold any of our ordinary shares by way of
qualification. A director who is not a shareholder shall nevertheless be        
entitled to attend and speak at shareholders' meetings.                         

    BORROWING POWERS.  Subject to the limitations noted below, the directors may
exercise all our powers to borrow money, and to mortgage or charge our          
undertaking, property and uncalled capital or any part or parts thereof, and to 
issue debentures and other securities, whether outright or as collateral        
security for any debt, liability or obligation of us or of any third party. The 
directors shall restrict our borrowings and exercise all voting and other       
rights, powers or control or rights of influence exercisable by us and any of   
our subsidiaries or in relation to our subsidiaries so that the aggregate amount
for the time being outstanding of all money borrowed by us and for the time     
being remaining outstanding of all money borrowed by us (exclusive of borrowings
owed by us to any subsidiary or by any subsidiary to us or another subsidiary)  
shall not at any time without the previous sanction of an ordinary resolution of
our shareholders exceed the sum of two times shareholders equity as set forth in
our consolidated balance sheet for our most recent fiscal year, from time to    
time, as audited by our independent public accountants.                         

REMUNERATION AND EXPENSES.  The remuneration of the directors will be   
determined by the directors but shall not in the aggregate exceed L250,000      
($415,700) per year (disregarding any compensation payable to directors in their
capacity as executives) or such higher amount as may from time to time be       
determined by an ordinary resolution of our board. Such remuneration shall      
(unless such resolution otherwise provides) be divisible among the directors as 
they may agree or, failing agreement, equally, except that any director who     
shall hold office for only part of the period with respect to which such        
remuneration is payable shall be entitled only to rank in such division for a   
proportion of remuneration related to the period during which he has held       
office. Any director who holds any executive office (including for this purpose 
the office of chief executive officer or vice-chairman of the board of          
directors, whether or not such office is held in an executive capacity) or who  
serves on any committee of the directors, or who otherwise performs services    
which in the opinion of the directors are outside the scope of the ordinary     
duties of a director, may be paid such extra remuneration by way of salary,     
commission or otherwise or may receive such other benefits as the               

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directors may determine. The directors may repay to any director all reasonable 
expenses as he may incur in attending and returning from meetings of the        
directors or of any committee of the directors or shareholders' meetings or     
otherwise in connection with our business.                                      

   PENSIONS AND OTHER BENEFITS.  The directors shall have the power to pay and
agree to pay gratuities, pensions or other retirement superannuation, death or  
disability benefits to (or to any person in respect of) any director or         
ex-director and, for the purpose of providing any such gratuities, pensions, or 
other benefits, to contribute to such scheme or to pay premiums.                

INDEMNIFICATION AND INSURANCE.  Our directors and officers (excluding   
auditors) shall be indemnified by us out of our own funds against and/or        
exempted by us from all costs, charges, losses, expenses and liabilities        
incurred by him in the actual or purported execution and/or discharge of his    
duties and/or the exercise or purported exercise of his powers and/or otherwise 
in relation to or in connection with his duties, powers or office. This         
indemnification includes (without prejudice to the generality of the foregoing) 
any liability incurred by him in investigating, preparing for and defending any 
inquiries or investigation, claim or proceedings, civil or criminal, which      
relate to anything done or omitted or alleged to have been done or omitted by   
him as an officer, director, or employee of our company and in which judgment is
given in his favor (or the proceedings are otherwise disposed of without any    
finding or admission of any material breach of duty on his part) or in which he 
is acquitted or in connection with any application under any statute for relief 
from liability with respect to any such act or omission in which relief is      
granted to him by a court. In that regard, we shall have the power to advance   
funds to any such officer, director or employee in payment of all costs,        
charges, losses, expenses, and liabilities incurred by him in investigating,    
preparing for or defending any such inquiries, investigations, claims or        
proceedings whatsoever. Our ability to indemnify or exempt our officers and     
directors from liability is limited by the provisions of the U.K. Companies Act 
1985. In addition, the board of directors shall have power to purchase and      
maintain insurance for or for the benefit of any person who is or was at any    
time a director or officer of any "relevant company" (as defined below) or who  
is or was at any time a trustee of any pension fund or employees' share scheme  
in which employees of any relevant company are interested including (without    
prejudice to the generality of the foregoing) insurance against any liability   
incurred by such person in respect of any act or omission in the actual or      
purported execution and/or discharge of his or her duties and/or in the exercise
or purported exercise of his or her powers and/or otherwise in relation to his  
or her duties, power, or offices in relation to any relevant company, or any    
such pension fund or employees' share scheme. For purposes of this paragraph,   
"relevant company" shall mean us, any holding company of ours or any other body,
whether or not incorporated, in which we or such holding company or any of the  
predecessors of us or of such holding company has or had any interest whether   
direct or indirect or which is in any way allied to or associated with us, or   
any subsidiary of us, or of such other body.                                    

At present, there is no pending litigation or proceeding involving a    
director or executive officer of ours where indemnification will be required or 
permitted. We are not aware of any threatened litigation or proceeding which may
result in a claim for such indemnification.                                     

   Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of our company  
under the provisions, described above, or otherwise, we have been advised that  
in the opinion of the Commission, this type of indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.     

    INTERESTED DIRECTOR TRANSACTIONS.  Subject to certain provisions of the U.K.
Companies Act 1985 designed to enforce fair dealing by directors and prevent    
their taking financial advantage, and provided that a director has disclosed to 
the directors the nature and extent of any interest, a director                 

    (1) may be party to or otherwise interested in any contract, transaction, or
arrangement with us or in which we are otherwise interested,      

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(2) may be a director or other officer of or employed by a party to any 
      contract, transaction or arrangement with or otherwise interested in any
    body corporate promoted by us or in which we are in any way interested
and                                                               

    (3) he (or any firm of which he is a partner, employee or member) may act in
       a professional capacity for us (other than as auditor) and be remunerated
      therefore and shall not (save as otherwise agreed by him) be accountable
to us for any benefit which he derives from any such contract,    
      transaction or arrangement or from any such office or employment or from
any interest in any such body corporate or for such remuneration. 

  No such contract, transaction or arrangement shall be liable to be avoided
on the grounds of any such interest or benefit.                                 

   Except as otherwise provided below, a director shall not vote in respect of
any contract or arrangement or any other proposal whatsoever in which he has any
material interest otherwise than by virtue of interests in shares or debentures 
or other securities of, or otherwise in or through, us. A director shall not be 
counted in the quorum of a meeting in relation to any resolution on which he is 
not entitled to vote. Provided that a director has disclosed the nature and     
extent of his interests, a director shall (in the absence of some other material
interest than is indicated below) be entitled to vote (and be counted in the    
quorum) in respect of any resolution concerning any of the following matters:   

  (1) the giving of any security, guarantee or indemnity with respect to (a)
money lent or obligations incurred by him or by any other person at the request 
of or for the benefit of we or any of our subsidiaries, or (b) a debt or other  
obligation of ours or any of our subsidiaries for which he himself has assumed  
responsibility in whole or in part under a guarantee or indemnity or by the     
giving of security;                                                             

(2) any proposal concerning an offer of shares or debentures or other   
securities of or by us or any of our subsidiaries in which offer he is or may be
entitled to participate as a holder of securities or in the underwriting or     
subunderwriting of which he is to participate;                                  

(3) any proposal concerning any other body corporate in which he is     
interested, directly or indirectly, and whether as an officer or shareholder or 
otherwise, provided that he (together with persons connected with him within the
meaning of Section 346 of the U.K. Companies Act 1985) does not have any        
interest (as that term is used in Sections 198 to 211 of the U.K. Companies Act 
1985) in 1% or more of the issued equity share capital of any class of such body
corporate (or of any third company through which his interest is derived) or of 
the voting rights available to members of the relevant body corporate (any such 
interest being deemed for the purpose of the Articles to be a material interest 
in all circumstances);                                                          

    (4) any proposal relating to an arrangement for the benefit of our employees
or any of our subsidiaries which does not award him any privilege or benefit not
generally awarded to the employees to whom such arrangement relates; and        

(5) any proposal concerning insurance which we propose to maintain or   
purchase for the benefit of directors or for the benefit of persons who include 
directors.                                                                      

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PRINCIPAL STOCKHOLDERS

  The following table contains information concerning (1) those persons whom
we know beneficially own more than 5% of our outstanding ordinary shares, (2)   
our directors, (3) our chief executive officer, and (4) all of our directors and
officers as a group. Unless otherwise indicated in the footnotes below, this    
information is based on share ownership as of December 31, 1998. Except as      
otherwise noted, the persons named in this table, based upon information        
provided by those persons to us, have sole voting and investment power with     
respect to all ordinary shares beneficially owned by them. Unless otherwise     
indicated, the address of each beneficial owner is c/o TownPagesNet.com plc, 11 
Market Square, Alton, Hampshire, England GU34 1HD, United Kingdom. Ordinary     
shares beneficially owned and percentage of ownership are based on 5,000,000    
ordinary shares outstanding before this offering and 7,200,000 ordinary shares  
to be outstanding after the completion of this offering, assuming no exercise of
the underwriters' over-allotment option. Beneficial ownership is determined in  
accordance with the rules of the Securities and Exchange Commission and         
generally includes voting or dispositive power with respect to our ordinary     
shares. An asterisk (*) indicates beneficial ownership of less than 1% of       
outstanding ordinary shares or voting power.                                    

                                                        [Enlarge/Download Table]

                                                                                         PERCENTAGE OF OUTSTANDING    
                                                                                              ORDINARY SHARES         
                                                                 NUMBER OF ORDINARY          BENEFICIALLY OWNED       
                                                                       SHARES         --------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER                             BENEFICIALLY OWNED   BEFORE OFFERING  AFTER OFFERING 
---------------------------------------------------------------  -------------------  ---------------  ---------------
                                                                                                                      
Raven Ventures Limited.........................................        4,500,000             90.00%           62.50%  
  La Motte Chambers                                                                                                   
  St. Helier, Jersey,                                                                                                 
  Channel Islands JE11BJ                                                                                              
Kevin R. Leech.................................................        4,500,000             90.00%           62.50%  
  La Motte Chambers                                                                                                   
  St. Helier, Jersey,                                                                                                 
  Channel Islands JE11BJ                                                                                              
Andrew Neville Lyndon-Skeggs...................................          279,000              5.58%            3.88%  
Wing Capital Limited...........................................          200,000              4.00%            2.78%  
  25 Turnbulls Lane, Gibraltar                                                                                        
J.W. Cole......................................................          200,000              4.00%            2.78%  
  25 Turnbulls Lane, Gibraltar                                                                                        
Barry B. J. Charles............................................           27,500                 *                *   
Howard E. Flight, M.P..........................................            7,000                 *                *   
Viscount E. J. Wingfield Lifford...............................           14,000                 *                *   
Nigel E. C. Talbot-Ponsonby....................................           14,000                 *                *   
All directors and executive officers as a group                                                                       
  (8 persons)..................................................        4,841,500             96.83%           67.24%  

    Raven Ventures Limited is a Guernsey (Channel Islands) corporation. Kevin R.
Leech, one of our directors, beneficially owns 100% of the outstanding shares of
Raven Ventures Limited.                                                         

The securities owned by Wing Capital Limited, a Gibraltar corporation,  
consist of immediately exercisable ten year options to acquire 200,000 of our   
ordinary shares owned by Raven Ventures Limited, exercisable at L0.03 ($0.06)   
per share, the average price per share paid for those ordinary shares. See      
"Related Party Transactions." J.W. Cole, a private investor, is the indirect    
beneficial owner of 100% of the outstanding shares of Wing Capital Limited.     

Mr. Charles' holdings listed in the table above include 7,000 ordinary  
shares owned beneficially and of record by Mrs. Barry Charles, as to which Mr.  
Barry Charles disclaims beneficial ownership.                                   

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RELATED PARTY TRANSACTIONS

LOANS AND ADVANCES FROM AFFILIATES                                              

Since February 1996, we have financed our operations primarily through a
discretionary operating line of credit with Glen Investments Limited, a         
corporate affiliate of Kevin R. Leech. Mr. Leech is a member of our board of    
directors. As of the date of this prospectus, he is the beneficial owner of     
approximately 90% of our ordinary shares, and on the closing of this offering he
will be the beneficial owner of approximately 62.50% of our ordinary shares.    
Advances under the line of credit bear interest at 9% per annum, are payable on 
demand, and are secured by a first security interest in all of the assets and   
property of Town Pages UK Limited, our operating subsidiary. As of December 31, 
1998, an aggregate of approximately L1.8 million ($3.0 million) was outstanding 
under this credit facility, inclusive of accrued and unpaid interest. We believe
that the terms of the discretionary line of credit are comparable to those      
available to us on an arm's length basis with unaffiliated lenders in the area. 

Simultaneous with consummation of the offering, Glen Investments Limited
shall convert L850,000 ($1,413,380), of the indebtedness anticipated to be then 
outstanding to Glen Investments Limited, including interest, into 850,000 shares
of our 9% Series A preferred shares. See "Description of Share                  
Capital--Preferred Shares" for a description of the terms of the 9% Series A    
preferred shares.                                                               

  The balance of our outstanding indebtedness to Glen Investments Limited in
respect to the line of credit will be repaid from the net proceeds of this      
offering or will be refinanced. We will seek to establish a new credit facility 
from a commercial lender effective upon completion of this offering of up to    
L3.0 million ($5.0 million). We contemplate that any new line of credit shall be
secured by a first security interest in all of our assets and advances under    
such line of credit shall be based upon agreed upon percentages of our eligible 
accounts receivable. As of the date of this prospectus, we do not have a        
commitment from any lender for a proposed credit facility.                      

CERTAIN INVESTMENT TRANSACTIONS                                                 

In February 1996, Glen Investments Limited, a Channel Islands (Jersey)  
corporation wholly-owned by Kevin R. Leech, agreed to provide the discretionary 
operating line of credit to Town Pages UK Limited, now our operating subsidiary.
In three separate transactions between June 14, 1996 and November 12, 1996, Glen
Investments Limited purchased a total of 57,395 ordinary shares of Town Pages UK
Limited (approximately 76% of its share capital) for an aggregate sum of        
L100,000 ($166,280). In December 1998, the percentage of Town Pages UK Limited's
share capital owned by Glen Investments Limited was increased to 90% through the
pro rata transfer of ordinary shares owned by the minority shareholders of Town 
Pages UK Limited, and Glen Investments Limited transferred its ordinary shares  
of Town Pages UK Limited to Raven Ventures Limited, another corporate affiliate 
of Kevin R. Leech.                                                              

On December 15, 1998, TownPagesNet.com plc, which was incorporated in   
England and Wales on July 31, 1998 as Town Pages Holdings plc, acquired all of  
the outstanding shares of Town Pages UK Limited. In that transaction, each      
shareholder of Town Pages UK Limited received approximately 66.208 of our       
ordinary shares in exchange for each ordinary share of Town Pages UK Limited    
owned by those shareholders. TownPagesNet.com plc did not conduct any business  
prior to the exchange transaction. As a result, Mr. Kevin R. Leech, a member of 
our board of directors is, as of the date of this prospectus, the beneficial    
owner, indirectly through Raven Ventures Limited, of approximately 90% of our   
ordinary shares. See "Principal Stockholders."                                  

TOPJOBS.NET PLC                                                                 

    Mr. Kevin R. Leech is the beneficial owner, through a wholly-owned corporate
affiliate, of approximately 80% of the currently outstanding share capital of   
topjobs.net plc. topjobs.net plc owns                                           

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and operates a Web site in the United Kingdom, Ireland, and Switzerland for     
recruitment advertising, known as Top Jobs on the Net. Whereas the job listings 
on TownPages are primarily targeted to the local community and presented in a   
bulletin board or banner format, topjobs.net plc is focused on offering a       
variety of recruitment services for corporations and recruiting firms           
advertising for a national or international pool of management, technical, and  
professional positions in an expanded display format. Although it is possible   
that topjobs.net plc may ultimately represent a competitor in the United Kingdom
and elsewhere, we do not believe that this will happen in the foreseeable       
future. In April 1999 a registration statement covering the initial public      
offering of topjobs.net plc was declared effective by the SEC.                  

TRAVEL THE NET LTD.                                                             

    Mr. Leech is a 25% shareholder of Leisure Concepts International, which owns
50% of Travel the Net Ltd. Travel the Net Ltd. is a development stage company   
which provides travel information and reservation services over the Internet.   
Travel the Net Ltd. is the exclusive provider of the travel "channel" on        
TownPages. Travel the Net Ltd. is currently one of our largest customers,       
accounting for approximately 14% of our revenues for our fiscal year ended      
December 31, 1998. Although it is possible that Travel the Net Ltd. may         
ultimately represent a competitor in the United Kingdom and elsewhere, we do not
believe that this will happen in the foreseeable future.                        

OFFICE SPACE LEASE ASSIGNMENT FROM WESTBROOK PROPERTY DEVELOPMENTS LTD.         

Our executive office is located at 11 Market Square, Alton, Hampshire,  
England GU34 1HD, United Kingdom, where we occupy approximately 242 square      
meters (approximately 2,540 square feet) of office space under a lease assigned 
to us by Westbrook Property Developments Ltd. for L1. We pay approximately      
L36,000 ($59,860) per year in rent under the lease. Westbrook Property          
Developments Ltd. leased the premises from Lloyds Bank plc. in 1989 for a 25    
year term. Prior to the assignment, Westbrook licensed use of the space to us.  
The lease terminates on September 28, 2014. Andrew Neville Lyndon-Skeggs, our   
President and Managing Director, is the founder, Managing Director, and the     
beneficial owner of all of the shares of Westbrook Property Developments Ltd. We
believe that the terms of the lease are comparable to those available to us on  
an arm's length basis with unaffiliated lessors in the area.                    

OTHER MATTERS                                                                   

In December 1998, and in connection with its agreement to continue its  
funding commitment to Town Pages UK Limited, Glen Investments Limited, an       
affiliate of Kevin R. Leech, agreed to grant to Wing Capital Limited immediately
exercisable options to acquire 200,000 of our ordinary shares owned by Glen     
Investments Limited. Glen Investments Limited then transferred all of our       
ordinary shares it then owned to Raven Ventures Limited, another corporate      
affiliate of Kevin R. Leech, subject to the options. The options are exercisable
at any time over a period of ten years at a per share exercise price equal to   
L0.03 ($0.06) per ordinary share, the average price per ordinary share paid by  
Glen Investments Limited for those ordinary shares. In consideration for those  
options, Wing Capital Limited, a Gibraltar corporation owned by certain business
associates of Kevin R. Leech, and its shareholders severally agreed to indemnify
Glen Investments Limited for up to 4.0% of any losses incurred under the line of
credit extended to us by Glen Investments Limited.                              

Simon J. Ward, one of the members of our board of directors, is also a  
director of CW Fellowes Limited, our operating subsidiary's independent business
advisor from 1995 to 1997. In 1998 we paid a total of L62,573 ($104,047) in     
professional fees to CW Fellowes.                                               

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DESCRIPTION OF SHARE CAPITAL

    The following summarizes information about our capital structure and related
summary information about provisions of our Memorandum of Association and       
Articles of Association and applicable English law, and the rights of holders of
our preferred shares and ordinary shares. This summary information is not       
complete. You should refer to our Memorandum of Association and Articles of     
Association, copies of which have been filed as exhibits to the registration    
statement of which this prospectus is part and which are available for          
inspection as part of our registration statement, if you would like further     
information.                                                                    

GENERAL                                                                         

Our authorized share capital is 20,000,000 ordinary shares of 1p nominal
value per ordinary share, and 5,000,000 Series A preferred shares of L1.00      
nominal value per preferred share.                                              

PREFERRED SHARES                                                                

    Our Articles of Association authorize our board of directors, by resolution,
to issue the preferred shares in such number as the board of directors may, from
time to time, determine without any further vote or action by the shareholders. 
Any preferred shares so issued would have priority over the ordinary shares with
respect to dividend or liquidation rights, or both.                             

    Upon consummation of this offering, a corporate affiliate of Kevin R. Leech,
a member of our board of directors and our principal stockholder, will exchange 
L850,000 ($1,413,380) principal amount of 9% demand notes payable by us for an  
aggregate of 850,000 9% Series A preferred shares of TownPagesNet.com plc. The  
holders of the 9% Series A preferred shares will be entitled to receive annual  
non-cumulative dividends out of funds legally available therefor, and each of   
those shares will have a preference in the amount of L1 ($1.6628) over the      
ordinary shares in the event of our liquidation or dissolution. The terms of our
9% Series A preferred shares prohibit the payment of cash dividends on our      
ordinary shares in any year until we also declare and pay a 9% dividend on our  
Series A preferred shares. The 9% Series A preferred shares will not be entitled
to vote and will not be redeemable, except by mutual agreement of               
TownPagesNet.com plc and the holder commencing no earlier than 12 months after  
the completion of this offering. Those Series A preferred shares will be        
convertible into ordinary shares, at the option of the holder, at any time      
commencing 12 months after the completion of this offering, at a conversion     
price equal to L7.22 ($12.00), which sum is 120% of the initial public offering 
price of the ADSs offered hereby. See "Related Party Transactions."             

ORDINARY SHARES                                                                 

As of the date of this prospectus, 5,000,000 of our ordinary shares are 
issued and outstanding and are fully paid or credited as fully paid, each of    
which are in registered form. Upon completion of this offering, 7,200,000       
ordinary shares will be issued and fully paid (7,530,000 ordinary shares if the 
underwriters' overallotment option is exercised in full), each of which will be 
in registered form. No holder of ordinary shares will be required to make       
additional contributions of capital in respect of those shares in the future.   

ISSUE OF SHARES                                                                 

Subject to any special rights previously conferred on the holders of any
issued shares or class of shares, any share of ours may be issued with any      
preferred, deferred, or other special rights. They may also be issued subject to
any restrictions, whether as regards dividends, return of capital, voting, or   
otherwise, as an ordinary resolution of a general meeting of our shareholders   
may from time to time determine, and subject to any determination by them, as   
our board of directors may determine. We may issue redeemable shares provided   
that there are shares in issue at the time which are not redeemable.            

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    Subject to the provisions of the U.K. Companies Act 1985, the authorized but
unissued shares are at the disposal of the directors who may issue, grant       
options over or otherwise dispose of them to those persons and on whatever terms
they deem appropriate.                                                          

 By virtue of Section 80 of the U.K. Companies Act 1985, our directors may
not, subject to limited exceptions in respect of employee share schemes,        
exercise any power to issue shares (or grant any right to subscribe for or      
convert other securities into shares) unless they have been authorized to do so 
by an ordinary resolution. Any authorization must state the maximum amount of   
shares which may be issued under it and the date of which it will expire, which 
must not be more than five years from the date the resolution is passed. On     
December 15, 1998, an ordinary resolution was passed authorizing the Directors  
pursuant to Section 80 of the U.K. Companies Act 1985 to exercise all their     
powers to issue shares up to an aggregate of the whole of our authorized but    
unissued share capital, until December 31, 2003.                                

If ordinary shares are to be issued for cash, Section 89 of the U.K.    
Companies Act 1985, requires, subject to limited exceptions in respect of       
employee share schemes, that those shares first be offered to existing holders  
of shares in proportion to their holdings. However, Section 95 of the U.K.      
Companies Act 1985 provides that in certain circumstances the directors of a    
company may by special resolution be given power to issue shares as if Section  
89 did not apply. On December 15, 1998, a special resolution was passed         
disapplying the provisions of Section 89 in respect of the issue of shares in   
connection with a rights issue and otherwise in respect of the issue of shares  
up to an aggregate of the whole of our authorized but unisssued share capital,  
that authority to expire at the close of business on December 31, 2003.         

See "Risk Factors" for limitations on exercise of preemptive rights.    

ALTERATION OF SHARE CAPITAL                                                     

We may from time to time by ordinary resolution of our shareholders in a
general meeting:                                                                

(1) increase our share capital by the sum, to be divided into shares of 
those amounts, as the resolution shall prescribe;                 

 (2) consolidate and divide all or any of our share capital into shares of
larger amount than our existing shares;                           

  (3) cancel any shares which, at the date of the passing of the resolution,
    have not been taken, or agreed to be taken, by any person and diminish
    the amount of our capital by the amount of the shares so canceled; and

    (4) subdivide our shares, or any of them, into shares of smaller amount than
     is fixed by our Memorandum of Association (provided that the proportion
    between the amount paid and the amount, if any, unpaid on each reduced
    share must be the same as on the share from which the reduced share is
      derived), and so that the resolution whereby any share is subdivided may
      determine that, as between the holders of the shares resulting from that
      subdivision, one or more of the shares may, as compared with the others,
    have any preferred, deferred, or other special rights or be subject to
     any restrictions, as we have power to attach to unissued or new shares.

    We may purchase or enter into a contract under which we will or may purchase
any of our own shares of any class (including any redeemable shares, if any then
exist) provided that the required shareholder approval is obtained. However,    
shares may only be repurchased out of distributable profits or the proceeds of a
fresh issue of shares made for the purpose, and any premium (if any is          
applicable) must, subject to certain exceptions, be paid out of distributable   
profits. If there shall be in issue any shares convertible into equity share    
capital of the class proposed to be purchased, then we shall not purchase or    
enter into a contract under which we will or may purchase those equity shares   
unless either the terms of issue of those convertible shares include provisions 
permitting us to purchase our own                                               

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equity shares or the purchase, or contract, has first been approved by an       
extraordinary resolution passed at a separate meeting of the holders of those   
convertible shares.                                                             

    We may by special resolution of our shareholders in a general meeting reduce
our share capital or any capital redemption reserve, share premium account, or  
other undistributable reserve in any way, subject in each case to confirmation  
by the English courts.                                                          

DIVIDEND RIGHTS                                                                 

    Holders of ordinary shares are entitled to receive those dividends as may be
recommended by our board of directors and declared by us in a general meeting,  
but no larger dividend may be declared than is recommended by our board of      
directors, and we, in a general meeting may declare a smaller dividend, and     
those interim dividends as our board of directors may decide. However, the terms
of our Series A preferred shares prohibit the payment of cash dividends on our  
ordinary shares in any year until we also declare and pay a 9% non-cumulative   
dividend on our Series A preferred shares during that year.                     

Our board of directors may fix a date as the record date by reference to
which a dividend on the ordinary shares or the preferred shares will be declared
or paid, whether or not it is before the date on which the declaration is made. 
Any dividend on the ordinary shares or the preferred shares unclaimed for a     
period of 12 years from our date of payment shall be forfeited and shall revert 
to us. No dividend on an ordinary share or a preferred share will bear interest.

RIGHTS IN LIQUIDATION                                                           

 Subject to the rights attached to the Series A preferred shares described
above and any other shares issued on special terms and conditions, upon our     
liquidation or winding up, after all our debts and liabilities and the expenses 
of the liquidation have been discharged, any surplus assets will be divided     
among the holders of ordinary shares in proportion to their holdings after      
deducting any amounts remaining unpaid in respect of those shares.              

NOTIFICATION OF INTEREST IN ORDINARY SHARES                                     

 Section 198 of the U.K. Companies Act 1985 obliges any person (subject to
exception) who acquires an interest of 3% or more in the ordinary shares to     
notify us of his interest within two business days following the day on which   
the obligation to notify arises. After the 3% level is exceeded, similar        
notification must be made in respect of whole percentage figure increases or    
decreases, rounded down to the next whole number. For the purposes of the       
notification obligation, the interest of a person in the shares means any kind  
of interest in shares (subject to certain exceptions) including any shares (1)  
in which his spouse or his child or stepchild, is interested, (2) in which a    
corporate body is interested where either (a) that corporate body or its        
directors are accustomed to act in accordance with that person's directions or  
instructions, or (b) that person controls one third or more of the voting power 
of that corporation body, or (3) in which another party is interested where the 
person and that other party are parties to a "concert party" agreement under    
Section 204 of the U.K. Companies Act 1985 and any interest in shares is in fact
acquired by any one of the parties pursuant to the agreement. A "concert party" 
agreement is an agreement which provides for one or more parties to it to       
acquire interests in shares of a particular company and imposes obligations or  
restrictions on any one or more of the parties as to the use, retention or      
disposal of the interests.                                                      

In addition, Section 212 of the U.K. Companies Act 1985 enables us, by  
notice in writing, to require a person whom we know or have reasonable cause to 
believe to be, or to have been at any time during the three years immediately   
preceding the date on which the notice is issued, interested in shares to       
confirm that fact or (as the case may be) to indicate whether or not that is the
case, and where he holds or has during this relevant time held an interest in   
the shares, to give further information as may be required relating to his      
interest and any other interest in the shares of which he is aware.             

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    In addition to the restrictions on the rights attaching to shares imposed by
the U.K. Companies Act 1985 for noncompliance with Section 212 of that Act, our 
Memorandum and Articles of Association apply additional restrictions. The       
restrictions imposed or applied can potentially include disenfranchisement, loss
of entitlement to dividends and other payments and restrictions on alienability.

VOTING RIGHTS OF ORDINARY SHARES AND SHAREHOLDER MEETINGS                       

  Under English law, there are two types of general meeting of shareholders,
annual general meetings and extraordinary general meetings. An annual general   
meeting must be held at least once in each calendar year and not later than 15  
months from the previous annual general meeting. At the annual general meeting  
matters such as the election of directors, appointment of auditors and the      
fixing of their remuneration, approval of the annual accounts and the directors'
report and declaration of dividends are dealt with. Any other general meeting is
known as an extraordinary general meeting.                                      

   The directors may convene an extraordinary general meeting and must convene
one if demanded by holders of not less than 10% of the paid-up shares. An annual
general meeting and an extraordinary general meeting called to pass a special   
resolution must be called by at least 21 clear days' notice specifying the      
place, day and time of the meeting and the general nature of the business to be 
transacted. No business may be transacted at any general meeting unless a quorum
of two persons entitled to vote on the business to be transacted is present in  
person or by proxy.                                                             

  At a general meeting, a simple majority of the votes cast is sufficient to
pass an ordinary resolution. A special resolution requires a majority of not    
less than 75% of the votes of those shareholders as (being entitled to do so)   
vote in person or by proxy on the resolution in question. A small number of     
matters relating to variation of the rights attaching to different classes of   
shares and proceedings in a winding-up require the authority of an extraordinary
resolution, which requires the same majority as a special resolution (including 
matters such as amending our Articles of Association or approving a sale of our 
company through merger in some circumstances).                                  

Subject to the restrictions referred to in the following paragraph, at a
meeting of shareholders every holder of shares who (being an individual) is     
present in person or (being a corporation) is present by a representative or    
proxy not being himself a member shall have one vote on a show of hands, and on 
a poll, every holder of shares present in person or by proxy shall have one vote
for every share held. Shareholders are not entitled to cumulative voting rights.
A poll can be demanded by:                                                      

(1) the chairman of the meeting,                                        

 (2) not less than three shareholders present in person or by proxy having
the right to vote at the meeting,                                               

(3) a holder or holders of shares or his or their proxy representing not
less than 10% of the total voting rights of all shareholders having the right to
attend and vote at the meeting or by                                            

  (4) a holder or holders of shares or his or their proxy conferring a right
to attend and vote at the meeting on which an aggregate sum has been paid up    
equal to not less than one tenth of the total sum paid up on all shares         
conferring that right.                                                          

A holder of shares shall not be entitled (save as a proxy for another   
member) to be present or vote at any general meeting:                           

 - (a) in respect of any shares held by him in relation to which he or any
   other person appearing to be interested in those shares has been served
     with a notice under Section 212 of the U.K. Companies Act 1985, requiring
     him to provide information in accordance with that section and containing
a statement that upon failure to supply such information before the 
    expiration period specified in the notice (which may not be less than 28
days) the registered holder of the share is not entitled to vote in 
  respect of those shares, and the person on whom such notice was served
fails to supply the information within the specified period; or     

   - (b) unless all amounts presently payable by him in respect of such shares
have been paid.                                                     

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All or any of the rights or privileges attached to the shares may, subject to   
certain provisions of the U.K. Companies Act 1985, be varied either with the    
consent in writing of the holders of 75% in nominal value of the issued shares  
or with the sanction of an extraordinary resolution passed at a separate meeting
of the holders of shares, but not otherwise.                                    

TRANSFER OF SHARES                                                              

The instrument of transfer of a share may be in any usual form or in any
other form of which the directors approve and shall be executed by or on behalf 
of the transferor and, unless the share is fully paid, by or on behalf of the   
transferee. The directors may, in their absolute discretion without giving any  
reason therefor, refuse to register the transfer of a share which is not fully  
paid provided that any such refusal will not prevent dealings in the shares from
taking place on an open and proper basis. The directors may decline to register 
a transfer to person known to be a minor, bankrupt or person who is mentally    
disordered at a patient for the purpose of any statute relating to mental       
health. Subject thereto, the Articles of Association contain no restrictions on 
the registration of transfers of fully paid shares provided that all stamp duty 
payable on the shares has been paid and the transfers are accompanied by any    
certificate for the shares and such other evidence, if any, as the directors may
require to prove the title of the intending transferor or his right to transfer 
the shares and is the case of a transfer to joint holders, and to no more than  
four such joint holders. The register of members, i.e. shareholders, may be     
closed at such times and for such periods as the directors may determine not    
exceeding thirty days in each year. We have resolved that title to any shares   
may be transferred by means of CREST being a relevant system for the purposes of
the Uncertified Securities Regulations 1995.                                    

ISSUANCE OF AMERICAN DEPOSITARY SHARES                                          

    The terms of the Deposit Agreement entered into by TownPagesNet.com plc with
the depositary permit the issuance of ADRs evidencing ADSs for ordinary shares  
accepted for deposit by the depositary. Ordinary shares may be deposited with   
the depositary upon the receipt by the depositary of evidence that any necessary
approvals have been waived or granted by any governmental or quasi-governmental 
body in England and Wales and also an opinion that the ordinary shares are not  
deemed Restricted Securities as defined in the Deposit Agreement.               

ISSUANCE OF RESTRICTED AMERICAN DEPOSITARY SHARES                               

    The terms of the Deposit Agreement entered into by TownPagesNet.com plc with
the depositary permit the issuance of Restricted ADRs evidencing Restricted ADSs
for ordinary shares that are deemed restricted securities under Rule 144(a)(3)  
of the Securities Act, are held by affiliates of Town Pages as defined in the   
Securities Act, or are subject to a lock-up agreement between the shareholder   
and the underwriter, once those ordinary shares are accepted for deposit by the 
depositary. Ordinary shares may be deposited with the depositary upon the       
receipt by the depositary of an opinion of U.S. counsel that the issuance of the
Restricted ADRs and Restricted ADSs does not violate the Securities Act or the  
terms of the lock-up agreement. The Restricted ADRs will be legended and will be
transferable only upon delivery to the depositary of an opinion of U.S. counsel 
setting forth the conditions upon which the Restricted ADRs are transferable    
under the applicable securities laws and that the transfer restrictions set     
forth in the legend on the Restricted ADRs are no longer applicable.            

REGISTRAR AND TRANSFER AGENT                                                    

The registrar and transfer agent for the ordinary shares is Lloyds Bank 
Registrars, The Causeway, Worthing, West Sussex BN99 6DA England, United        
Kingdom.                                                                        

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DESCRIPTION OF AMERICAN DEPOSITARY RECEIPTS 

The following is a summary of the deposit agreement. Because it is a    
summary, it does not contain all the information that may be important to you.  
For more complete information, you should read the entire deposit agreement and 
the ADR. You can read a copy of the deposit agreement which is filed as an      
exhibit to the registration statement of which this prospectus forms part. You  
may also copy the deposit agreement, which is located at the Commission's Public
Reference Room at 450 Fifth Street, N.W. Washington, D.C. 20549. You may obtain 
information on the operation of the Public Reference Room by calling the        
Commission at 1-800-732-0330 or through the Commission's Internet site (http:// 
www.sec.gov).                                                                   

Bankers Trust Company, as our depositary, will issue ADRs. Each ADR will
represent an ownership interest in one ordinary share (or the right to receive  
one ordinary share) which we will deposit with the custodian in England under   
the deposit agreement among ourselves, the depositary and yourself as a holder  
or beneficial owner of an ADR. Each ADR will also represent securities, cash or 
other property deposited with the depositary but not distributed to ADR holders.

    The depositary's office is located at Four Albany Street, New York, New York
10006.                                                                          

    You may hold ADRs either directly or indirectly through your broker or other
financial institution. If you hold ADRs directly, you are an ADR holder. This   
description assumes you hold your ADRs directly. If you hold ADRs indirectly,   
you must rely on the procedures of your broker or other financial institution to
assert the rights of ADR holders described in this section. You should consult  
with your broker or financial institution to find out what those procedures are.

   Because the depositary will actually own the shares, you must rely on it to
exercise the rights of a shareholder. The obligations of the depositary are set 
out in the deposit agreement. The deposit agreement and ADRs are governed by New
York law.                                                                       

ORDINARY SHARE DIVIDENDS AND OTHER DISTRIBUTIONS                                

HOW WILL YOU RECEIVE DIVIDENDS AND OTHER DISTRIBUTIONS ON THE ORDINARY SHARES?  

The depositary has agreed to pay to you the cash dividends or other     
distributions it or the custodian receives on shares or other deposited         
securities. You will receive these distributions in proportion to the number of 
shares underlying your ADR.                                                     

- CASH. The depositary will convert cash distributions we pay on the    
    ordinary shares into U.S. dollars, if it can do so on a reasonable basis
  and can transfer the U.S. dollars to the United States on a reasonable
   basis. Before making a distribution, the depositary will deduct (1) its
 expenses in converting and transferring cash, including obtaining the
    approval of a government authority therefor, and (2) any taxes withheld.
    IF THE EXCHANGE RATES FLUCTUATE DURING A TIME WHEN THE DEPOSITARY CANNOT
CONVERT THE CURRENCY, YOU MAY LOSE SOME OR ALL OF THE VALUE OF THE  
DISTRIBUTION.                                                       

   - ORDINARY SHARES. The depositary will distribute new ADRs representing any
  ordinary shares we distribute as a dividend or free distribution if we
 furnish the depositary promptly with satisfactory evidence that it is
    legal to do so. If the depositary does not distribute new ADRs, each ADR
 will represent its proportionate interest in any additional shares we
    distribute. The depositary will only distribute whole ADRs. It will sell
      shares which would require it to issue a fractional ADR and distribute the
net proceeds in the same way as it does with cash.                  

  - RIGHTS. If we offer holders of our securities any rights, preferences or
privileges to subscribe for additional shares or any other rights,  
preferences or privileges, the depositary will make these rights,   
      preferences or privileges available to you in the manner it deems best, in
    its own discretion, but after consulting us, to the extent that we first
    furnish the depositary with satisfactory evidence that it is legal to do
so. If we don't furnish this evidence and it is practical           

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      to sell the rights, the depositary will sell the rights and distribute the
U.S. dollar proceeds in the same way as it does with cash. If the   
    depositary determines that it is lawful to make such rights, preferences
      or privileges available to only certain ADR holders but not to others, the
   depositary may distribute the rights, preferences and privileges to any
     holders to whom it determines the distribution is lawful in proportion to
the number of shares underlying such holder's ADRs. In the event the
    depositary would otherwise not distribute the rights, if you request the
  distribution of warrants or other instruments in order to exercise the
  rights to which you are entitled, the depositary will make such rights
available to you upon written notice from us that we have elected to
 permit such rights to be executed. The depositary will not distribute
    rights, preferences or privileges to ADR holders unless both the rights,
preferences or privileges and the securities to which such rights,  
      preferences or privileges relate are either exempt from registration under
   the Securities Act with respect to a distribution to ADR holders or are
 registered under the provisions of such Act. The depositary may allow
   rights that are not distributed or not sold to lapse. IN THAT CASE, YOU
WILL RECEIVE NO VALUE FOR THEM.                                     

- IF THE DEPOSITARY MAKES RIGHTS AVAILABLE TO YOU, IT WILL EXERCISE THE 
  RIGHTS AND PURCHASE THE ORDINARY SHARES ON YOUR BEHALF. The depositary
     will then deposit the ordinary shares and issue ADRs to you. It will only
   exercise rights if you pay the exercise price and any other charges the
  rights require you to pay. U.S. securities laws may restrict the sale,
      deposit, cancellation, and transfer of the ADRs issued after exercise. For
example, you may not be able to trade the ADRs freely in the United 
States. In this case, you would not be permitted to purchase such   
    securities or otherwise exercise such rights, preferences or privileges,
     and the depositary would, to the extent possible, dispose of such rights,
 preferences or privileges for your account as provided in the deposit
      agreement. YOU HAVE NO ASSURANCE THAT YOU WILL BE ABLE TO EXERCISE RIGHTS,
      PREFERENCES AND PRIVILEGES ON THE SAME TERMS AND CONDITIONS AS THE HOLDERS
OF THE ORDINARY SHARES.                                             

- OTHER DISTRIBUTIONS. The depositary will send to you anything else we 
    distribute on deposited securities by any means it thinks is legal, fair
and practical. If it cannot make the distribution in that way, the  
    depositary will adopt a method it thinks equitable and practical for the
   purpose of effecting such distribution, including distributing from the
   sale of what we distributed any net proceeds to you in U.S. dollars, in
the same way as it does with cash.                                  

To the extent the depositary decides any distribution to you is not     
practical, it may make any other distribution it believes is practical,         
including distributions of foreign currency, securities or property. It may     
retain any of the same as deposited securities without paying interest on or    
investing it. Each ADR will represent the additional distribution received by   
the depositary.                                                                 

  YOU HAVE NO ASSURANCE FROM THE DEPOSITARY THAT THEY WILL BE ABLE TO EFFECT
ANY CURRENCY CONVERSION OR TO SELL ANY DISTRIBUTED PROPERTY, RIGHTS OR OTHER    
SECURITIES TIMELY OR AT A SPECIFIED RATE OR PRICE.                              

RECORD DATE                                                                     

Whenever:                                                               

- any cash dividend or cash distribution is to become payable or any    
distribution other than cash is to be made,                         

- rights, preferences and privileges are to be issued,                  

- the depositary finds it necessary or convenient in connection with the
  giving of any notice, solicitation of any consent or any other matter,

- the depositary receives notice of any meeting of holders of shares or 
other deposited securities, or                                      

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    - for any reason the depositary causes a change in the number of shares that
are represented by each ADR,                                        

the depositary, after consulting us, will fix a record date, as close as        
practicable to the record date fixed by us with respect to the shares, for      
determining which holders of ADRs are:                                          

- entitled to receive such dividend, distribution, rights, preferences, 
privileges or the net proceeds of the sale thereof,                 

- entitled to give instructions for the exercise of voting rights to any
meeting,                                                            

- entitled to receive such notice or solicitation, or                   

- entitled to act in respect of any other matter.                       

    For determining the date on or after which each ADR will represent a changed
number of our shares, as the case may be.                                       

DEPOSIT, WITHDRAWAL AND CANCELLATION                                            

HOW DOES THE DEPOSITARY ISSUE ADRS?                                             

    The depositary will issue ADRs if you or your broker deposit ordinary shares
or evidence of rights to receive ordinary shares with the custodian. Upon       
payment of its fees and expenses and of any taxes or charges, such as stamp     
taxes or stock transfer taxes or fees, the depositary will register the         
appropriate number of ADRs in the names you request and will deliver ADRs at its
office to the persons you request.                                              

HOW DO ADR HOLDERS WITHDRAW AN ADR AND OBTAIN ORDINARY SHARES?                  

  You may turn in your ADRs at the depositary's office. Upon payment of fees
and expenses and of any taxes or charges, the depositary will deliver (1) the   
underlying ordinary shares to an account designated by you with Electronic      
Book-Entry Settlement System and any other securities, property and cash to you 
or as ordered by you or (2) at your risk, expense and request, the depositary   
will deliver the deposited securities at its office or at any other place that  
you specify.                                                                    

  The depositary will not accept for surrender an ADR representing less than
one ordinary share. If you surrender an ADR representing other than a whole     
number of ordinary shares, it will deliver to you (1) the appropriate whole     
number of ordinary shares and (2) the cash proceeds from the sale of such       
fractional entitlements represented by such surrendered ADR.                    

VOTING RIGHTS                                                                   

HOW DO YOU VOTE?                                                                

   You may instruct the depositary to vote the ordinary shares underlying your
ADRs.                                                                           

  The depositary will notify you of the upcoming vote and arrange to deliver
our voting materials to you. The materials will (1) describe the matters to be  
voted on and (2) explain how you, on a certain date, may instruct the depositary
to vote the ordinary shares or other deposited securities underlying your ADRs  
as you direct. For instructions to be valid, the depositary must receive them on
or before the date specified. The depositary will try, as practical, subject to 
the provisions of and governing the underlying shares or other deposited        
securities, to vote or have its agents vote the ordinary shares or other        
deposited securities as you instruct. The depositary will only vote or attempt  
to vote as you instruct.                                                        

  We can not assure you that you will receive from the depositary the voting
materials in time to ensure that you can instruct the depositary to vote your   
ordinary shares. In addition, the depositary and                                

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its agents are not responsible for failing to carry out voting instructions or  
for the manner of carrying out voting instructions. THIS MEANS THAT YOU MAY NOT 
BE ABLE TO EXERCISE YOUR RIGHT TO VOTE AND THERE MAY BE NOTHING YOU CAN DO IF   
YOUR ORDINARY SHARES ARE NOT VOTED AS YOU REQUESTED.                            

                                                        [Enlarge/Download Table]

                 ADR HOLDERS MUST PAY:                                              FOR:                          
--------------------------------------------------------  --------------------------------------------------------
                                                                                                                  

$5.00 per 100 ADRs (or portion thereof)                   - Each issuance of an ADR, including as a result of a   
                                                            distribution of shares or rights or the               
                                                            reclassification of deposited securities or any       
                                                            recapitalization, reorganization, merger or           
                                                            consolidation or sale of assets                       

                                                          - Each withdrawal of an ADR                             

A fee of $1.50 per receipt                                - Any combination of split-up of receipts               

Register or transfer fees                                 - Transfer and registration of shares on any applicable 
                                                            register payable by you when you deposit or withdraw  
                                                            shares                                                

$2.00 per 100 ADRs (or portion thereof)                   - Any cash distribution                                 

Expense of the depositary                                 - Conversion of foreign currency to U.S. dollars        

Expenses of the depositary                                - Cable, telex and facsimile transmission expenses      

Taxes and other governmental charges the depositary or    - As necessary                                          
the custodian have to pay on any ADR, or share                                                                    
underlying an ADR, for example, stock transfer taxes,                                                             
stamp duty or withholding taxes                                                                                   

PAYMENT OF TAXES                                                                

  You have to pay any taxes payable by or on behalf of the depositary or the
custodian with respect to the ADRs, other deposited securities or any           
distribution thereon to the depositary. Until you pay those taxes, the          
depositary may refuse to effect a registration, registration of transfer,       
split-up, combination or withdrawal of the deposited securities.                

   The depositary may deduct the amount of any taxes owed from any payments to
you. It may also sell deposited securities or property, other than cash, by     
public or private sale, to pay any taxes owed. You will remain liable if the    
proceeds of the sale are not enough to pay the taxes. If the depositary sells   
deposited securities, it will, if appropriate, reduce the number of ADRs to     
reflect the sale and will pay to you any proceeds, or send to you any cash or   
other property, remaining after it has paid the taxes.                          

The depositary or the custodian will remit to the relevant governmental 
authority any amounts required to be withheld by either of them in connection   
with a distribution. We will similarly remit any amounts so owed by us.         

RECLASSIFICATIONS, RECAPITALIZATIONS AND MERGERS                                

If we:                                                                          

- Change the nominal or par value of our shares                         

- Reclassify, split up or consolidate any of the deposited securities   

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 - Recapitalize, reorganize, merge, consolidate, sell all or substantially
all of our assets, or take any similar action                       

Then:                                                                           

- The cash, shares or other securities received by the depositary will  
  become deposited securities. Each ADR will automatically represent its
equal share of the new deposited securities.                        

- The depositary may also issue new ADRs or ask you to surrender your   
   outstanding ADRs in exchange for new ADRs identifying the new deposited
securities.                                                         

 - If any security so received may not be lawfully distributed to you, the
depositary may, after consultation with us, sell such security and  
allocate, the net proceeds of such sale for your account.           

REPORTS                                                                         

We will furnish to the depositary and the custodian: (1) summaries in   
English or English-language versions of any reports, notices and other          
communications that we generally transmit to holders of our shares or other     
deposited securities, (2) English-language versions of our annual and quarterly 
reports, in each case prepared in accordance with the applicable requirements of
the Commission, (3) a copy of our Memorandum and Articles of Association and (4)
promptly upon any amendment thereto or change therein, a copy of such amendment 
or changed version. The depositary will make items (1) through (4) listed above 
available for your inspection at its corporate trust office and at the office of
the custodian.                                                                  

Upon our request, the depositary will promptly mail to you such notices,
reports and communications, which we generally make available to the holders of 
our shares and other deposited securities, and will make a copy of such notices,
reports and communications available to you for inspection at its corporate     
trust office.                                                                   

AMENDMENT AND TERMINATION                                                       

HOW MAY THE DEPOSIT AGREEMENT BE AMENDED?                                       

    We may agree with the depositary to amend the deposit agreement and the ADRs
without your consent for any reason. If the amendment imposes or increases fees 
or charges, except for taxes and other governmental charges or certain expenses 
of the depositary or prejudices an important right of ADR holders, it will only 
become effective 30 days after the depositary notifies you of the amendment. AT 
THE TIME AN AMENDMENT BECOMES EFFECTIVE, YOU ARE CONSIDERED, BY CONTINUING TO   
HOLD YOUR ADR, TO AGREE TO THE AMENDMENT AND TO BE BOUND BY THE ADRS AND THE    
DEPOSIT AGREEMENT AS AMENDED.                                                   

 No amendment will impair your right to surrender your ADR and receive the
underlying securities and all money and other property, if any, to which your   
ADR entitles you. If a governmental body adopts new laws, regulations or rules  
which require the deposit agreement or ADR to be amended, we and the depositary 
may make the necessary amendment, which could take effect before you receive    
notice of the amendment.                                                        

HOW MAY THE DEPOSIT AGREEMENT BE TERMINATED?                                    

The depositary will terminate the agreement if we ask it to do so. The  
depositary may also terminate the agreement at its own initiative. If we        
terminate the agreement, you must be given 30 days notice of such termination.  
If the depositary terminates the agreement, you must be given 90 days notice of 
such termination.                                                               

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   After termination, the depositary will be required to do only the following
under the deposit agreement: (1) collect and hold distributions on the deposited
securities, (2) sell rights and other property, and convert deposited securities
into cash, as provided in the deposit agreement and (3) deliver shares and other
deposited securities upon the cancellation of the ADRs. At any time after one   
year from the termination date, the depositary may sell any remaining deposited 
securities by public or private sale. After the expiration of one year from the 
date of expiration, the depositary may sell any deposited securities it then    
holds and may hold, uninvested, the money it received on the sale, as well as   
any other cash it is holding under the deposit agreement for the pro rata       
benefit of the ADR holders that have not surrendered their ADRs. It has no      
liability for interest. After making any sale, the depositary's only obligations
will be to account for the money and other cash and its obligations with respect
to indemnification.                                                             

LIMITATIONS ON OBLIGATIONS AND LIABILITY TO ADR HOLDERS                         

LIMITS ON OUR OBLIGATIONS AND THE OBLIGATIONS OF THE DEPOSITARY; LIMITS ON      
LIABILITY TO HOLDERS OF ADRS                                                

  The deposit agreement expressly limits our obligations and the obligations
of the depositary. It also limits our liability and the liability of the        
depositary. We and the depositary:                                              

- are only obligated to take the actions specifically set forth in the  
deposit agreement without gross negligence or bad faith;            

- are not liable if either of us is prevented or delayed by law or      
      circumstances beyond our control from performing our obligations under the
deposit agreement;                                                  

 - are not liable if either of us exercises discretion permitted under the
Agreement;                                                          

- have no obligation to become involved in a lawsuit or other proceeding
    related to the ADRs or the deposit agreement on your behalf of any other
party; unless it has been provided an indemnity;                    

  - may rely upon any document we believe in good faith to be genuine and to
have been signed or presented by the proper party;                  

  - will not be liable for any action or inaction while relying on advice or
  information from legal counsel, other advisor, yourself or anyone else
competent to give advice or information;                            

- will not be responsible for failing to carry out instructions to vote 
     securities or for the manner in which same are voted or the effect of the
vote.                                                               

The depositary may own and deal in our securities and in ADRs.          

In the deposit agreement, we and the depositary agree to indemnify each 
other under certain circumstances.                                              

REQUIREMENTS FOR DEPOSITARY ACTIONS                                             

Before the depositary will issue or register transfer of an ADR, make a 
distribution on an ADR, or permit withdrawal of shares, the depositary may      
require:                                                                        

    - payment of stock transfer or other taxes or other governmental charges and
      transfer or registration fees charged by third parties for the transfer of
any shares or other deposited securities;                           

 - production of satisfactory proof of the identity and genuineness of any
signature or other information it deems necessary; and              

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- compliance with regulations it may establish, from time to time,      
     consistent with the deposit agreement, including presentation of transfer
documents.                                                          

The depositary may refuse to deliver, transfer, or register transfers of
ADRs generally when our transfer books, or the transfer books of the depositary 
are closed or at any time if we or the depositary think it advisable to do so.  

YOUR RIGHT TO RECEIVE THE ORDINARY SHARES UNDERLYING YOUR ADRS                  

    You have the right to cancel your ADRs and withdraw the underlying shares at
any time except;                                                                

- When temporary delays arise because: (1) the depositary or we has/have
   closed its/our transfer books; (2) the transfer of shares is blocked to
     permit voting at a shareholder's meeting; or (3) we are paying a dividend
on the shares.                                                      

   - When you or other ADR holders seeking to withdraw shares owe money to pay
fees, taxes and similar charges.                                    

  - When it is necessary to prohibit withdrawals in order to comply with any
    laws or governmental regulations that apply to ADRs or to the withdrawal
of shares or other deposited securities.                            

  This right to withdrawal may not be limited by any other provisions of the
deposit agreement.                                                              

PRE-RELEASE OF ADRS                                                             

In certain circumstances, subject to the provisions of the deposit      
agreement, the depositary may issue ADRs before deposit of the underlying       
shares. This is called a pre-release of the ADRs. A pre-release is closed out as
soon as the underlying shares are delivered to the depositary. The depositary   
may pre-release ADRs only under the following conditions:                       

(1) before or at the time of the pre-release, the person to whom the    
pre-release is being made must represent to the depositary in writing that it or
its customer owns the shares or ADRs to be deposited;                           

 (2) the pre-released ADRs must be fully collateralized with cash or other
property the depositary deems appropriate held by the depositary for your       
benefit; and                                                                    

(3) the depositary must be able to close out the pre-release on not more
than five (5) business days' notice.                                            

In addition, the depositary will limit the number of ADRs that may be   
outstanding at any time as a result of pre-release to not more than 30% of all  
ADRs, although the depositary may disregard the limit from time to time, if it  
deems appropriate and may change this limit for purposes of general application.

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TAXATION

  The following generally summarizes the principal United States federal and
United Kingdom tax consequences of the purchase, ownership and disposition of   
ADSs evidenced by ADRs and, except as provided explicitly below, ordinary       
shares, to beneficial owners that, for United States federal income tax         
purposes, are citizens or residents of the United States (who are not also      
resident individuals or, in the case of the individuals, ordinarily resident in 
the United Kingdom for United Kingdom tax purposes), corporations or            
partnerships created or organized under the laws of the United States or any    
state thereof, estates the income of which is subject to United States federal  
income taxation regardless of our source or a trust if a court within the United
States is able to exercise primary supervision over the administration and      
control of the trust and one or more United States persons have the authority to
control all substantial decisions of the trust (collectively "United States     
Holders"); provided, however, to the extent and in accordance with the          
procedures provided in Notice 98-25 (released by the Service on April 14, 1998) 
and future Treasury Regulations which will incorporate Notice 98-25, certain    
trusts in existence on August 20, 1996, and treated as United States persons    
prior to this date, which elect to continue to be treated as United States      
persons will also be considered United States Holders. United Kingdom resident  
corporate shareholders will not normally be liable for United Kingdom           
Corporation Tax on any dividends received. The discussion of United States tax  
consequences represents the opinion of Greenberg Traurig and the discussion of  
United Kingdom tax consequences represents the opinion of McFadden Pilkington & 
Ward.                                                                           

  The statements regarding the United States and United Kingdom tax laws set
out below (1) are based on the laws in force and as interpreted by the relevant 
taxation authorities as of the date of this prospectus and are subject to any   
changes in the United States or the United Kingdom law, or on the interpretation
thereof by the relevant taxation authorities or in the double taxation          
conventions between the United States and the United Kingdom (the               
"Conventions"), occurring after this date, (2) are based in part, on            
representations of Bankers Trust, and (3) assume that each obligation in the    
Deposit Agreement and any related agreement will be performed in accordance with
our terms.                                                                      

   The summary is of a general nature only and does not discuss all aspects of
United States and United Kingdom taxation that may be relevant to a particular  
investor. For example, this summary deals only with ADRs held as capital assets 
and does not address special classes of purchasers, such as dealers in          
securities, United States Holders whose functional currency is not the United   
States dollar, insurance companies, tax exempt organizations, financial         
institutions and persons subject to the alternative minimum tax that may be     
subject to special rules are not discussed below. Neither does the following    
summary address the tax treatment of United States Holders who own, directly or 
by attribution, 10% or more of our outstanding voting share capital. Except as  
otherwise expressly provided herein, this summary does not discuss foreign,     
state, local, estate or gift tax consequences to owners of ADSs and ordinary    
shares. Since our purpose is limited to brief consideration of the more commonly
relevant provisions, in no case should this summary be taken as constituting    
advice to an investor as to how he will or will not be taxed in any jurisdiction
and in no circumstances is it to substitute for professional advice. We believe,
and the discussion therefore assumes, that it is not and will not become a      
passive foreign investment company with the meaning of Section 1297 of the      
Internal Revenue Code of 1986, as amended (the "Code") for U.S. federal income  
tax purposes.                                                                   

   PROSPECTIVE PURCHASERS OF ADSS ARE STRONGLY URGED TO CONSULT WITH THEIR OWN
TAX ADVISORS WITH RESPECT TO THE CONTENTS OF THIS SUMMARY AND THE UNITED STATES 
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES, THE UNITED KINGDOM TAX CONSEQUENCES  
AND TAX CONSEQUENCES IN OTHER JURISDICTIONS, OF THE OWNERSHIP OF ADSS AND THE   
SHARES REPRESENTED THEREBY AS APPLICABLE IN THEIR PARTICULAR TAX SITUATIONS.    

   For purposes of the Conventions and the Code, United States Holders will be
treated as the owners of the ordinary shares represented by ADSs evidenced by   
ADRs.                                                                           

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TAXATION OF DIVIDENDS                                                           

TAX TREATMENT OF U.K. HOLDERS.  In his United Kingdom "Green" Budget    
announcement made on November 25, 1997, the United Kingdom Chancellor of the    
Exchequer announced a change in the taxation of dividends effective April 6,    
1999, which was confirmed in his Budget on March 17, 1998. As a result of this  
change the previous system of "advance corporation tax" (ACT) has been replaced.

   In respect of dividends paid on or after April 6, 1999 an individual Holder
should generally be entitled to a tax credit in respect of any dividend paid by 
our company equal to one-ninth of a cash dividend. Although the credit will be  
available to offset a United Kingdom resident individual's basic rate liability 
to United Kingdom income tax in respect of the dividend, this tax credit will   
not be refundable. United Kingdom resident individuals who pay higher rate tax  
will pay tax on the grossed up amount of the dividend at the rate of 32.5%.     
After taking into account the tax credit they receive, these individuals will   
have an additional tax liability of 25% of the net dividend received. United    
Kingdom resident trustees of discretionary trusts are liable to account for     
income tax on the grossed up dividend at 25% less an appropriate Tax Credit. A  
United Kingdom resident corporate Holder will not normally be liable to United  
Kingdom corporation tax on any dividend received from us.                       

    TAX TREATMENT OF U.S. HOLDERS.  An Eligible United States Holder (as defined
below) is entitled under the Convention relating to income taxes (the "Income   
Tax Convention") and current United Kingdom law to claim from the United Kingdom
Inland Revenue a refund (a "Treaty Payment") for an amount equal to the amount  
of the tax credit to which an individual resident in the United Kingdom for     
United Kingdom tax purposes would have been entitled had he received the        
dividend (the "Tax Credit Amount"), subject to a United Kingdom withholding tax 
of 15% of the sum of the dividend paid and the related Tax Credit Amount.       
Consequent upon the change in the taxation of dividends effective from April 6, 
1999 an Eligible Uited States Holder will effectively cease to be entitled to a 
Treaty Payment in relation to dividends paid by our company because the 15%     
withholding tax would exceed the Tax Credit Amount. For example if the dividend 
is 80p, the reduced Tax Credit Amount would be 8.89p, less than the 15%         
withholding tax of 13.33p and, therefore, no Treaty Payment would be made.      

For United States federal income tax purposes, the gross amount of a    
dividend plus the Tax Credit Amount (a) will be included in gross income by an  
Eligible United States Holder (at the dollar value of the dividend payment, on  
the date of the receipt by Bankers Trust, regardless of whether the dividend is 
converted into dollars) and (b) will be treated as foreign source dividend      
income to the extent paid out of our current or accumulated earnings and profits
as determined for United States federal income tax purposes. Any difference     
between the United States dollar amount included in income and the United States
dollars actually received may constitute ordinary foreign currency gain or loss.
Subject to certain limitations, the United Kingdom withholding tax (which, after
April 5, 1999, equals the Tax Credit Amount) will be treated as a foreign income
tax eligible for direct credit against such Eligible United States Holder's     
federal income taxes.                                                           

    For purposes of the foreign tax credit limitations, dividends distributed by
us will generally constitute "passive income" or, in the case of certain United 
States Holders, "financial services income." The consequences of these          
limitations will depend on the nature and sources of each United States Holder's
income and the deduction appropriately allocated or apportioned thereto. No     
dividends received deduction will be allowed with respect to dividends paid by  
us. If dividends paid by us were to exceed our current and accumulated earnings 
and profits as determined for federal income tax purposes, such excess would be 
treated as a non-taxable return of capital to the extent of the United States   
Holder's adjusted basis in the ADSs or ordinary shares, and any excess would be 
treated as capital gain.                                                        

 For purposes of this prospectus, the term "Eligible United States Holder"
means a United States Holder that is a beneficial owner of an ADS or ordinary   
share and of the cash dividend paid on that security and that satisfies the     
following conditions: the United States Holder                                  

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   (1) is an individual or a corporation resident in the United States for the
       purposes of the Income Tax Convention (and, in the case of a corporation,
is not also resident in the United Kingdom for United Kingdom tax 
purposes),                                                        

  (2) holds the ADSs or ordinary shares in a manner which is not effectively
    connected with a permanent establishment in the United Kingdom through
      which such United States Holder carries on business or with a fixed base
 in the United Kingdom from which such United States Holder performs
independent personal services,                                    

    (3) under certain circumstances, is not an investment or holding company 25%
  or more of the capital of which is owned, directly or indirectly, by
     persons that are not individuals resident in, and are not nationals of,
the United States,                                                

 (4) under certain circumstances, is not exempt from federal income tax on
dividend income in the United States, and                         

   (5) is a United States partnership, trust or estate, but only to the extent
     that the income derived by such partnership, trust or estate is subject
      to United States tax as the income of a United States resident either in
     its hands or in the hands of its partners or beneficiaries, as the case
may be.                                                           

  Special rules apply to a corporation which owns or, alone or together with
one or more associated corporations, controls, directly or indirectly, 10% or   
more of our voting shares.                                                      

TAXATION OF CAPITAL GAINS                                                       

A United States Holder who is not resident or ordinarily resident or    
domiciled in the United Kingdom for United Kingdom tax purposes will not be     
liable for United Kingdom tax on capital gains realized on the disposal of ADSs 
or ordinary shares, at the time of disposal, unless the United States Holder is 
carrying on a trade, profession or vocation in the United Kingdom through a     
branch or agency which constitutes a permanent establishment, and the ADSs or   
ordinary shares are or have been used, held or acquired for the purposes of such
trade, profession or vocation of such branch or agency.                         

Upon the sale or other disposition of an ordinary share or ADS, a United
States Holder will generally recognize gain or loss for United States federal   
income tax purposes in an amount equal to the difference between the U.S. dollar
value of the amount realized on such sale or disposition and the United States  
Holder's adjusted tax basis (determined in U.S. dollars) in the ordinary share  
or ADS. Such gain or loss will be capital gain or loss if the United States     
Holder holds our ordinary share or ADS as a capital asset. Prospective investors
should consult their tax advisors regarding the United States federal income tax
treatment of capital gains (which may be taxed at lower rates than ordinary     
income for certain taxpayers who are individuals) and losses (the deductibility 
of which is subject to limitations).                                            

A United States Holder that is liable for both United Kingdom and United
States tax on a gain on the disposal of the ADSs or ordinary shares will        
generally be entitled, subject to certain limitations and under the terms of the
Income Tax Convention, to credit the amount of United Kingdom capital gains or  
corporation tax, as the case may be, paid in respect of such gain against such  
United States Holder's United States federal income tax liability in respect of 
such gain. United States Holders should seek professional tax advice to         
determine their entitlement to credit United Kingdom tax against their United   
States federal income tax liability.                                            

ESTATE AND GIFT TAXES                                                           

 An ordinary share or ADR held by an individual United States Holder whose
domicile is determined to be in the United States for purposes of the Estate Tax
Treaty and who is not a national                                                

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of the United Kingdom will not generally be subject to United Kingdom           
inheritance tax on such individual's death or on a lifetime transfer of the     
ordinary share or ADR except in certain cases where the ordinary share or ADR   
(1) is part of the business property of a United Kingdom permanent establishment
of an enterprise of the United States Holder or (2) pertains to a United Kingdom
fixed base used for the performance of independent personal services. The Estate
Tax Treaty generally provides a credit against United States federal estate or  
gift tax liability for the amount of any tax paid in the United Kingdom in a    
case where the ordinary share or ADR is subject to both United Kingdom          
inheritance tax and to United States federal estate or gift tax. Similarly, an  
ordinary share or ADR comprised in a settlement generally will not be chargeable
to United Kingdom inheritance tax if the settlement was made when the settlor   
was domiciled in the United States and was not a national of the United Kingdom.
An individual United States Holder will be subject to United States estate and  
gift taxes with respect to the ordinary shares or ADRs in the same manner and to
the same extent as with respect to other types of personal property.            

UNITED KINGDOM STAMP DUTY AND STAMP DUTY RESERVE TAX                            

   SDRT at the then applicable rate arises upon the deposit with Bankers Trust
of the ordinary shares in exchange for ADSs evidenced by ADRs. The current rate 
of SDRT on the deposit of ordinary shares is 1.5%. In certain cases, United     
Kingdom SD could also arise on the deposit and the current rate is 1.50 United  
Kingdom pounds sterling per 100 pounds sterling (or part thereof). The amount of
SDRT payable will be reduced by any SD paid in connection with the same         
transaction. In accordance with the terms of the Deposit Agreement, holders of  
ADRs must pay an amount in respect of such tax to Bankers Trust.                

Provided that the instrument of transfer is not executed in the United  
Kingdom and remains at all subsequent times outside the United Kingdom, no      
United Kingdom SD will be payable on the acquisition or transfer of ADSs. Nor   
will an agreement to transfer ADRs give rise to a liability to SDRT.            

A transfer of ordinary shares by Bankers Trust or our nominee to the    
relative ADR holder when the ADR holder is not transferring beneficial ownership
will give rise to United Kingdom SD at the rate of 0.50 pounds sterling per     
transfer.                                                                       

    Transfers of ordinary shares, as opposed to ADSs, will normally give rise to
a charge to United Kingdom SD at the rate of 0.50 United Kingdom pounds sterling
per 100 pounds sterling (or part thereof) of the price payable for the ordinary 
shares at the time of the transfer or agreement to transfer. SD and SDRT are    
usually the liability of the purchaser. Where such ordinary shares are later    
transferred to Bankers Trust, further SDRT will normally be payable upon the    
deposit at the rate of 1.5% of the value of the ordinary shares at the time of  
transfer. In certain cases, United Kingdom SD could also arise in the transfer  
at the rate of l.50 pounds sterling per 100 pounds sterling (or part thereof),  
subject to the amount of any SDRT being reduced by such SD on the same          
transaction.                                                                    

BACKUP WITHHOLDING AND INFORMATION REPORTING                            

In general, information reporting requirements will apply to dividend   
payments (or other taxable distributions) in respect of ADSs or ordinary shares 
made within the United States to a non-corporate United States person, and      
"backup withholding" at a rate of 31% will apply to such payments if the holder 
or beneficial owner fails to provide an accurate taxpayer identification number 
in the manner required by the United States law and applicable regulations, if  
there has been notification from the Internal Revenue Service of a failure by   
the holder or beneficial owner to report all interest or dividends required to  
be shown on its federal income tax returns or, in certain circumstances, if the 
holder or beneficial owner fails to comply with applicable certification        
requirements. Certain corporations and persons that are not United States       
persons may be required to establish their                                      

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exemption from information reporting and backup withholding by certifying their 
status on Internal Revenue Service Forms W-8 or W-9.                            

    In general, payment of the proceeds from the sale of ADSs or ordinary shares
to or through a United States office of a broker is subject to both United      
States backup withholding and information reporting unless the holder or        
beneficial owner certifies its non-United States status under penalties of      
perjury or otherwise establishes an exemption. United States information        
reporting and backup withholding generally will not apply to a payment made     
outside the United States of the proceeds of a sale of ADSs or ordinary shares  
through an office outside the United States of a non-United States broker.      
However, United States information reporting requirements (but not backup       
withholding) will apply to a payment made outside the United States of the      
proceeds of a sale of ADSs or ordinary shares through an officer outside the    
United States of a broker (i) that is a United States person, (ii) that derives 
50% or more of its gross income for a specified three-year period from the      
conduct of a trade or business in the United States, (iii) that is a "controlled
foreign corporation" as to the United States, or (iv) with respect to payments  
made after December 31, 1999, that is a foreign partnership, if at any time     
during its tax year, one or more of its partners are U.S. persons (as defined in
United States Treasury Regulations) who in the aggregate hold more than 50% of  
the income or capital interest in the partnership or if, at any time during its 
tax year, such foreign partnership is engaged in a United States trade or       
business, unless the broker has documentary evidence in its files that the      
holder or beneficial owner is a non-United States person or the holder or       
beneficial owner otherwise establishes an exemption.                            

   Amounts withheld under the backup withholding rules may be credited against
a holder's tax liability, and a holder may obtain a refund of any excess amounts
withheld under the backup withholding rules by filing the appropriate claim for 
refund with the United States Internal Revenue Service.                         

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SHARES ELIGIBLE FOR FUTURE SALE 

Prior to this offering, there has not been any public market for our    
securities and there can be no assurance that a significant public market for   
any of our securities will be developed or sustained after this offering. Sales 
of substantial amounts of ordinary shares or ADSs in the public market after    
this offering, or the possibility of those sales occurring, could adversely     
affect prevailing market prices of our ordinary shares or ADSs or our future    
ability to raise capital through an offering of equity securities. We are unable
to predict the number of ordinary shares or ADSs that will be sold after this   
offering, whether in the public markets or under Rule 144 under the Securities  
Act or otherwise, as this will depend on the market price of our securities,    
personal circumstances of the seller, and other factors.                        

Upon the completion of this offering, we will have outstanding 7,200,000
ordinary shares, assuming no exercise of the underwriters' overallotment option.
Of those ordinary shares, the 2,200,000 ADSs sold in this offering, assuming no 
exercise of the underwriters' over-allotment option, will be freely tradable in 
the public market without restriction under the Securities Act, unless purchased
by our "affiliates," as defined in Rule 144 under the Securities Act.           

The remaining 5,000,000 ordinary shares outstanding are "restricted     
securities," as defined in Rule 144 under the Securities Act. These restricted  
securities were issued and sold by us in private transactions in reliance upon  
exemptions from registration under the Securities Act. Restricted securities may
be sold in the public market only if they are registered or if they qualify for 
an exemption from registration under Rules 144 or 701 under the Securities Act, 
which are summarized below.                                                     

Under the terms of certain "lock-up" agreements, all of our officers,   
directors and stockholders have agreed, subject to certain limited exceptions,  
not to offer, sell, contract to sell, grant any option to purchase or otherwise 
dispose of any of our ordinary shares or any securities exercisable for or      
convertible into our ordinary shares owned by them for a period of 365 days from
the effective date of the registration statement of which this prospectus is a  
part. These agreements provide that the representative of the underwriters may, 
in its sole discretion and at any time without notice, release all or a portion 
of the shares subject to these lock-up agreements; however, the representative  
has no current intention to do so.                                              

  In general, under Rule 144, beginning 90 days after the completion of this
offering, a person, or persons whose shares are aggregated, who has beneficially
owned restricted securities for at least one year, including the holding period 
of any prior owner who is not an affiliate of ours, would be entitled to sell   
within any three-month period a number of ordinary shares that does not exceed  
the greater of (1) one percent of the then outstanding ordinary shares,         
approximately 72,000 shares following this offering, or (2) the average weekly  
trading volume of the ordinary shares or ADSs during the four calendar weeks    
preceding that sale. Sales under Rule 144 are also subject to certain manner of 
sale and notice requirements and to the availability of current public          
information about us. Under Rule 144(k), a person who is not deemed to have been
an affiliate of ours at any time during the 90 days preceding a sale and who has
beneficially owned the shares proposed to be sold for at least two years,       
including the holding period of any prior owner who is not an affiliate of ours,
is entitled to sell such ordinary shares without complying with the manner of   
sale, public information, volume limitation or notice provisions of Rule 144.   
Non-affiliates may resell our securities issued under Rule 701 in reliance upon 
Rule 144 without having to comply with Rule 144's public information, holding,  
volume, and notice requirements. Our affiliates may resell our securities issued
under Rule 701 in reliance upon Rule 144 without compliance with Rule 144's     
holding period requirements.                                                    

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UNDERWRITING

   Subject to the terms and conditions of the underwriting agreement, the form
of which is filed as an exhibit to the registration statement filed with the    
Commission of which this prospectus is a part, the underwriters named below     
have, severally and not jointly, agreed through Dirks & Company, Inc., J.P.     
Turner & Company, L.L.C. and Security Capital Trading, Inc., as the             
representatives of the underwriters, to purchase from us, and we have agreed to 
sell to the underwriters, the aggregate number of ADSs set forth opposite their 
respective names:                                                               

                                                        [Enlarge/Download Table]

                                                                                   NUMBER OF 
UNDERWRITERS                                                                          ADSS   
---------------------------------------------------------------------------------  ----------
                                                                                             
Dirks & Company, Inc.............................................................     906,667
J.P. Turner & Company, L.L.C.....................................................     843,333
Security Capital Trading, Inc....................................................     450,000
                                                                                   ----------
    Total........................................................................   2,200,000
                                                                                   ----------
                                                                                   ----------

The underwriting agreement provides that the obligations of the several 
underwriters under that agreement are subject to certain conditions precedent,  
including the absence of any material adverse change in our business and the    
receipt of certain certificates, opinions and letters from our counsel and our  
independent public accountants. The underwriters are committed to take and to   
pay for all of the ADSs offered hereby, if any are purchased. In the event of a 
default by any of the underwriters, purchase commitments of the non-defaulting  
underwriters may be increased or the underwriting agreement may be terminated.  

  The underwriters have advised us that they propose to offer all or part of
the ADSs offered hereby directly to the public initially at the price set forth 
on the cover page of this prospectus. They have also advised us that they may   
offer ADSs to certain dealers at a price that represents a concession of not    
more than $.42 per ADS, and that the underwriters may allow, and these dealers  
may reallow, a concession of not more than $.15 per ADS to certain other        
dealers. After the commencement of this offering, the price to the public and   
the concessions may be changed.                                                 

 We have granted to the underwriters an option, exercisable within 30 days
after the effective date of the registration statement of which this prospectus 
is a part, to purchase up to an additional 330,000 ADSs at the same price per   
ADS as the initial 2,200,000 ADSs to be purchased by the underwriters. The      
underwriters may exercise this option only to cover over-allotments, if any. To 
the extent the underwriters exercise this option, each of the underwriters will 
have a firm commitment, subject to certain conditions, to purchase the same     
percentage of the additional ADSs as the percentage of the initial 2,200,000    
ADSs to be purchased by that underwriter.                                       

  We have agreed to indemnify the underwriters and their controlling persons
against certain liabilities, including certain liabilities under the Securities 
Act, and to contribute to payments the underwriters and their controlling       
persons may be required to make in respect thereof.                             

We have agreed to pay the representatives of the underwriters a         
non-accountable expense allowance equal to 2 1/2% of the gross proceeds of this 
offering, of which $50,000 has been paid as of the date of this prospectus. We  
have also agreed to pay all expenses in connection with qualifying the          
securities under the laws of those states the representatives may designate,    
including fees and expenses of counsel retained for such purposes by the        
representatives and the costs and disbursements in connection with qualifying   
the offering with the National Association of Securities Dealers, Inc.          

 We have agreed to issue to the representatives of the underwriters, for a
total of $22.00, warrants to purchase an aggregate of 220,000 ADSs exercisable  
for a period of four years commencing one year after the effective date of the  
registration statement of which this prospectus is a part, at a price equal to  
165% of the initial public offering price of the ADSs. The representatives'     
warrants contain anti-                                                          

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dilution provisions providing for automatic adjustments of the exercise price   
and number of shares issuable on exercise price and number of shares issuable on
exercise of the representatives' warrants upon the occurrence of some events,   
including stock dividends, stock splits, mergers, acquisitions and              
recapitalizations. The representatives' warrants contain certain registration   
rights relating to the 220,000 ADSs issuable thereunder. For the life of the    
representatives' warrants, the representatives will have the opportunity to     
profit from a rise in the market price for the 220,000 ADSs. The holders of the 
representatives' warrants will have no voting, dividend or other stockholder    
rights with respect to those warrants. The holders of ADSs issued upon exercise 
of those warrants will have the voting, dividend, and other stockholder rights  
of holders of ADSs. The representatives' warrants are restricted from sale,     
transfer, assignment or hypothecation for the one year period from the date of  
this prospectus, except to officers or partners of the underwriters and members 
of the selling group and/or their officers or partners.                         

  We have also granted to the representatives of the underwriters the right,
for a period of 5 years from the closing of this offering, to nominate a        
designee of the representatives for election to our board of directors. The     
representatives have not yet exercised their right to designate this person. If 
the representatives elect not to exercise this right, then the representatives  
may designate one person to attend meetings of our board of directors.          

 We and our officers, directors and present shareholders have agreed that,
for a period of 365 days after the completion of this offering, without the     
prior written consent of the representatives of the underwriters, none of us    
will sell or otherwise dispose of any of our respective equity securities or    
securities convertible into equity securities of TownPagesNet.com plc, including
without limitation ordinary shares, directly or indirectly, except for the sale 
of ordinary shares to the underwriters under the terms of the underwriting      
agreement.                                                                      

The representatives of the underwriters have informed us that the       
underwriters do not expect any sales of the ADSs offered by this prospectus to  
be made to discretionary accounts controlled by the underwriters.               

  Prior to this offering, there has been no established market in the United
States or elsewhere for our securities. The public offering price will be       
determined by us in consultation with the representatives of the underwriters.  
It is expected that the price determination will take several factors into      
account, including our results of operations, our future prospects and the      
prevailing market and economic conditions at the time of this offering. There   
can be no assurance that an active trading market will develop for any of the   
securities offered by this prospectus, or that any of such securities will trade
in the public market subsequent to this offering at or above the initial public 
offering price, or at all.                                                      

The representatives, on behalf of the underwriters, may engage in       
over-allotment, stabilizing transactions, syndicate covering transactions and   
penalty bids. Over-allotment involves syndicate sales in excess of this offering
size, which creates a syndicate short position. Stabilizing transactions permit 
bids to purchase the ADSs being offered so long as the stabilizing bids do not  
exceed a specified maximum. Syndicate covering transactions involve purchases of
the ADSs in the open market after the distribution has been completed in order  
to cover syndicate short positions. Penalty bids permit the representatives to  
reclaim a selling concession from a syndicate member when the ADSs originally   
sold by the syndicate member are purchased in a syndicate covering transaction  
to cover syndicate short positions. Stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the ADSs to be higher than 
it would otherwise be in the absence of such transactions. These transactions   
may be effected on the AMEX or otherwise and, if commenced, may be discontinued 
at any time. In addition, the underwriters may engage in passive market making  
transactions in our securities on the AMEX in accordance with Rule 103 of       
Regulation M. Neither we nor the underwriters make any                          

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representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the securities offered
by this prospectus.                                                             

    Each underwriter has covenanted with us that it will not offer in the United
Kingdom by means of any document other than this prospectus any ADSs and will   
not offer to persons in the United Kingdom except to persons whose ordinary     
activities involve them in acquiring, holding, managing, or disposing of        
investments, as principal or agent, for the purposes of their businesses or     
otherwise in circumstances which do not constitute an offer to the public within
the meaning of the U.K. Companies Act 1985. Each of the underwriters has also   
agreed that it will comply with all applicable provisions of the Financial      
Services Act 1986 with respect to anything done by it in relation to the        
securities offered by this prospectus in, from, or otherwise involving the      
United Kingdom. Each underwriter has undertaken to us that in the United Kingdom
it will only deliver this prospectus to persons who are of a kind described in  
Article 11(3) of the Financial Services Act 1986 (Investment Advertising)       
(Exemptions) Order 1995 or Article 8(1) of the Financial Services Act 1986      
(Investment Advertisements) (Exemption) (No. 2) Order 1995 or who are otherwise 
a person to whom the document lawfully be issued.                               

LEGAL MATTERS 

  The validity of the ADSs offered by this prospectus will be passed upon by
Greenberg Traurig, New York, New York, counsel for the depositary. Certain legal
matters relating to this offering will be passed upon for the underwriters by   
Orrick, Herrington & Sutcliffe LLP. The validity of the issuance of the ordinary
shares represented by the ADSs and certain other legal maters relating to the   
laws of the United Kingdom will be passed upon by McFadden Pilkington & Ward,   
our English counsel. Greenberg Traurig and Orrick, Herrington & Sutcliffe LLP   
will rely, without independent verification, upon McFadden Pilkington & Ward    
with respect to matters governed by the laws of the United Kingdom.             

EXPERTS 

 The financial statements of TownPagesNet.com plc at December 31, 1997 and
1998, and for the years ended December 31, 1996, 1997 and 1998, have been       
audited by Ernst & Young, independent auditors, as set forth in their report    
included herein. The financial statements have been included in reliance upon   
that report given upon the authority of that firm as experts in accounting and  
auditing.                                                                       

ADDITIONAL INFORMATION

    We have filed with the Commission a registration statement on Form F-1 under
the Securities Act, with respect to the securities offered by this prospectus.  
In this prospectus we refer to that registration statement, together with all   
amendments, exhibits and schedules to that registration statement, as "the      
registration statement."                                                        

As is permitted by the rules and regulations of the Commission, this    
prospectus, which is part of the registration statement, omits certain          
information, exhibits, schedules and undertakings set forth in the registration 
statement. For further information with respect to us, and the securities       
offered by this prospectus, reference is made to the registration statement.    
Statements contained in this prospectus as to the contents of any contract or   
other document referred to herein are not necessarily complete and, in each     
instance, reference is made to the copy of the contract or other document filed 
as an exhibit to the registration statement, each such statement being qualified
in all respects by this reference.                                              

   We will be subject to the reporting requirements of the Securities Exchange
Act of 1934, as applicable to foreign private issuers. In accordance with the   
requirements, we will file an annual report on Form 20-F and other information  
under cover of Form 6-K with the Commission. Our reports and                    

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other information may be inspected and copied at the following public reference 
facilities maintained by the Commission:                                        

- 450 Fifth Street, N.W., Washington, D.C. 20549                        

- Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661                                                      

- 7 World Trade Center, Room 1400, 13th Floor, New York, New York 10048 

   Copies of this material may also be obtained from the Public Reference Room
of the Commission at 450 Fifth Street, N.W. Washington, D.C. 20549 at prescribed
rates. Information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1 (800) 732-0330. Our filings, including the       
registration statement of which this prospectus is a part, will also be         
available to you on the Commission's Internet site (http://www.sec.gov).        

   Bankers Trust, as depositary in respect of the ADSs, will distribute on our
behalf to the holders of ADSs on an annual basis after receipt from us, an      
annual report and quarterly interim reports in English. The annual report will  
include approximate reconciliations of consolidated net income and shareholders'
equity to U.S. GAAP to the extent that they are not prepared in accordance with 
U.S. GAAP. The consolidated financial statements in the annual reports will be  
examined by our independent public accountants and include their opinion on the 
statements. We have applied for the listing of our ADSs on the American Stock   
Exchange under the symbol "TPN." You may obtain certain information about us on 
AMEX's Internet site (http://www.Nasdaq-Amex.com).                              

SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES 

   TownPagesNet.com plc is registered and exists under the laws of England and
Wales. Our directors and officers and certain of our experts named in this      
prospectus are not residents of the United States, and a substantial portion of 
their assets and our assets are located outside of the United States. As a      
result, it may be difficult or not possible for investors to effect service of  
process within the United States upon these persons or to enforce outside the   
United States judgments obtained against these persons in U.S. courts, or to    
enforce in U.S. courts judgments obtained against these persons in courts in    
jurisdictions outside the United States, in each case, in any action, including 
actions predicated upon the civil liability provisions of the Federal or state  
securities laws of the United States. We have been advised by McFadden          
Pilkington & Ward, that there is doubt as to the enforceability against persons 
in England in actions for enforcement of judgements of U.S. courts of civil     
liabilities predicated solely upon the U.S. federal securities laws. Also,      
investors may find it difficult to enforce liabilities based upon the civil     
liability provisions of the U.S. federal securities laws against us, our        
officers, directors and foreign-resident experts named in this prospectus in an 
original action in a United Kingdom court.                                      

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TOWNPAGESNET.COM PLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                        [Enlarge/Download Table]

                                                                                                             PAGE   
                                                                                                             -----  
                                                                                                                    
Report of Independent Auditors.............................................................................      F-2

Consolidated Balance Sheets as of December 31, 1997 and December 31, 1998..................................      F-3

Consolidated Statements of Operations for the years ended December 31, 1996, December 31, 1997 and December         
  31, 1998.................................................................................................      F-4

Consolidated Statements of Stockholders' Equity (Net Capital Deficiency) for the years ended December 31,           
  1996, December 31, 1997 December 31, 1998................................................................      F-5

Consolidated Statements of Cash Flows for the years ended December 31, 1996, December 31, 1997 and December         
  31, 1998.................................................................................................      F-6

Notes to the Consolidated Financial Statements.............................................................      F-7

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REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of                                   
TownPagesNet.com plc                                                            
We have audited the accompanying consolidated balance sheets of         
TownPagesNet.com plc as of December 31, 1997 and 1998 and the related           
consolidated statements of operations, stockholders' equity (net capital        
deficiency) and cash flows for each of the three years in the period ended      
December 31, 1998. These consolidated financial statements are the              
responsibility of the Company's management. Our responsibility is to express an 
opinion on these consolidated financial statements based on our audits.         
We conducted our audits in accordance with United Kingdom auditing      
standards, which do not differ in any significant respect from auditing         
standards generally accepted in the United States. Those standards require that 
we plan and perform the audit to obtain reasonable assurance about whether the  
financial statements are free of material misstatement. An audit includes       
examining, on a test basis, evidence supporting the amounts and disclosures in  
the financial statements. An audit also includes assessing the accounting       
principles used and significant estimates made by management, as well as        
evaluating the overall financial statement presentation. We believe that our    
audits provide a reasonable basis for our opinion.                              
In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of             
TownPagesNet.com plc at December 31, 1997 and 1998 and the consolidated results 
of its operations and its cash flows consolidated for each of the three years in
the period ended December 31, 1998, in conformity with accounting principles    
generally accepted in the United States.                                        
/s/ Ernst & Young                                                               
Reading, England                                                                
January 15, 1999                                                                

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TOWNPAGESNET.COM PLC

CONSOLIDATED BALANCE SHEETS 

                                                        [Enlarge/Download Table]

                                                                               DECEMBER 31,                     
                                                                        --------------------------  DECEMBER 31,
                                                                            1997          1998          1998    
                                                                        ------------  ------------  ------------
                                                                                                     AMOUNTS IN 
                                                                        AMOUNTS IN POUNDS STERLING  U.S. DOLLARS
                                                                        --------------------------              
                                                                                                                
                                                                                                      (NOTE 1)  
                                                                                                    ------------
ASSETS                                                                                                          
Current assets                                                                                                  
Cash and cash equivalents..............................................    L  12,868     L  33,868   $   56,316 
Accounts receivable....................................................           --       590,350      981,634 
Receivable from related party (Note 6).................................           --       235,000      390,758 
Unbilled receivables...................................................           --       422,872      703,152 
Other receivables......................................................        4,985         1,700        2,826 
Prepaid expenses.......................................................           --       223,313      371,325 
                                                                        ------------  ------------  ------------
    Total current assets...............................................       17,853     1,507,103    2,506,011 
Equipment and fixtures:                                                                                         
  Computer equipment...................................................       35,450       136,140      226,374 
  Furniture and fixtures...............................................        4,995        14,677       24,405 
  Equipment............................................................           --        37,894       63,010 
                                                                        ------------  ------------  ------------
                                                                              40,445       188,711      313,789 
  Less accumulated depreciation........................................       21,861        63,883      106,225 
                                                                        ------------  ------------  ------------
                                                                              18,584       124,828      207,564 
                                                                        ------------  ------------  ------------
                                                                           L  36,437    L1,631,931   $2,713,575 
                                                                        ------------  ------------  ------------
                                                                        ------------  ------------  ------------
LIABILITIES AND STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)                                                   
CURRENT LIABILITIES                                                                                             
Accounts payable.......................................................    L  36,934     L 248,108   $  412,554 
Accrued expenses and other liabilities.................................       15,819       127,099      211,340 
Accrued interest.......................................................       19,988       106,203      176,594 
Taxes and social security payable......................................       13,797        49,239       81,875 
Deferred Income........................................................           --       228,244      379,524 
Amounts payable under Web site design agreements.......................           --       411,969      685,022 
Debenture loans from stockholder (Note 2)..............................      298,924     1,682,190    2,797,146 
                                                                        ------------  ------------  ------------
    Total current liabilities..........................................      385,462     2,853,052    4,744,055 
Commitments (Note 3)                                                                                            
STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)                                                                   
9% Series A redeemable convertible preferred stock, L1 par value,                                               
5,000,000 shares authorized, none issued and outstanding at December                                            
31, 1997 and December 31, 1998.........................................           --            --           -- 
Ordinary shares: L0.01 par value; 20,000,000 shares authorized;                                                 
5,000,000 issued and outstanding at December 1997 and December 31,                                              
1998...................................................................       50,000        50,000       83,140 
Additional paid in capital.............................................      122,500       122,500      203,693 
Accumulated deficit....................................................     (521,525)   (1,393,621)  (2,317,313)
                                                                        ------------  ------------  ------------
    Total stockholders' equity (net capital deficiency)................     (349,025)   (1,221,121)  (2,030,480)
                                                                        ------------  ------------  ------------
                                                                           L  36,437    L1,631,931   $2,713,575 
                                                                        ------------  ------------  ------------
                                                                        ------------  ------------  ------------

See accompanying notes

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TOWNPAGESNET.COM PLC

CONSOLIDATED STATEMENTS OF OPERATIONS 

                                                        [Enlarge/Download Table]

                                                                        YEAR ENDED DECEMBER 31,                   
                                                       ---------------------------------------------------------- 
                                                            1996            1997          1998          1998      
                                                       ---------------  ------------  ------------  ------------- 
                                                                                                     AMOUNTS IN   
                                                               AMOUNTS IN POUNDS STERLING           U.S. DOLLARS  
                                                       -------------------------------------------                
                                                                                                                  
                                                                                                      (NOTE 1)    
                                                                                                    ------------- 
Revenues:                                                                                                         
  Advertising revenues................................      L   5,561      L   5,063     L  40,839  $      67,907 
  Contract revenues and other.........................            664          3,296       919,522      1,528,981 
  Contract revenue from related parties...............       --              --            159,742        265,619 
                                                       ---------------  ------------  ------------  ------------- 
    Total revenues....................................          6,225          8,359     1,120,103      1,862,507 
Cost of revenues                                                                                                  
  Maintenance and hosting costs.......................       --              --            179,776        298,932 
  Cost of contract revenues and other.................         21,750         43,781       563,854        937,576 
                                                       ---------------  ------------  ------------  ------------- 
    Total cost of revenues............................         21,750         43,781       743,630      1,236,508 
                                                       ---------------  ------------  ------------  ------------- 
Gross profit (loss)...................................        (15,525)       (35,422)      376,473        625,999 

Operating expenses                                                                                                
  Research and development............................         21,148         40,832        67,910        112,921 
  Sales and marketing.................................         24,943         20,194       351,633        584,695 
  General and administrative..........................         94,429        220,057       715,168      1,189,181 
  Depreciation and amortisation.......................          9,289         12,572        42,022         69,874 
                                                       ---------------  ------------  ------------  ------------- 
    Total operating expenses..........................        149,809        293,655     1,176,733      1,956,671 
                                                       ---------------  ------------  ------------  ------------- 
Operating loss........................................       (165,334)      (329,077)     (800,260)    (1,330,672)

Interest expense......................................         (2,211)       (17,845)      (91,385)      (151,955)
Interest income.......................................            636            358         1,500          2,494 
Other income..........................................       --              --             18,049         30,012 
                                                       ---------------  ------------  ------------  ------------- 
Net loss..............................................     L (166,909)    L (346,564)   L (872,096) $  (1,450,121)
                                                       ---------------  ------------  ------------  ------------- 
                                                       ---------------  ------------  ------------  ------------- 
Basic and diluted net loss per share..................      L   (0.10)     L   (0.07)    L   (0.17) $       (0.29)
                                                       ---------------  ------------  ------------  ------------- 
                                                       ---------------  ------------  ------------  ------------- 
Shares used in computing basic and diluted net loss                                                               
  per share...........................................      1,672,225      5,000,000     5,000,000      5,000,000 
                                                       ---------------  ------------  ------------  ------------- 
                                                       ---------------  ------------  ------------  ------------- 

See accompanying notes

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 

                                                        [Enlarge/Download Table]

                                                         ADDITIONAL                                              
                                              ORDINARY    PAID-IN     ACCUMULATED                                
                                               SHARES     CAPITAL       DEFICIT         TOTAL          TOTAL     
                                              ---------  ----------  -------------  -------------  ------------- 
                                                          AMOUNTS IN POUNDS STERLING                             
                                              ---------------------------------------------------                
                                                                                                    AMOUNTS IN   
                                                                                                   U.S. DOLLARS  
                                                                                                     (NOTE 1)    
                                                                                                   ------------- 
                                                                                                                 
Balance at December 31, 1995.................   L 5,000       L  --     L   (8,052)    L   (3,052) $      (5,075)

Issuance of ordinary shares for cash.........   L45,000    L122,500         L   --     L  167,500  $     278,519 

Net loss.....................................    --          --           (166,909)      (166,909)      (277,536)
                                              ---------  ----------  -------------  -------------  ------------- 
Balance at December 31, 1996.................    50,000     122,500       (174,961)        (2,461)        (4,092)

Net loss.....................................    --          --           (346,564)      (346,564)      (576,267)
                                              ---------  ----------  -------------  -------------  ------------- 
Balance at December 31, 1997.................    50,000     122,500       (521,525)      (349,025)      (580,359)

Net loss.....................................    --          --           (872,096)      (872,096)    (1,450,121)
                                              ---------  ----------  -------------  -------------  ------------- 
Balance at December 31, 1998.................   L50,000    L122,500    L(1,393,621)   L(1,221,121) $  (2,030,480)
                                              ---------  ----------  -------------  -------------  ------------- 
                                              ---------  ----------  -------------  -------------  ------------- 

See accompanying notes

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TOWNPAGESNET.COM PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS 

                                                        [Enlarge/Download Table]

                                                                       YEAR ENDED DECEMBER 31,                   
                                                      ---------------------------------------------------------- 
                                                           1996           1997          1998           1998      
                                                      ---------------  -----------  -------------  ------------- 
                                                                                                    AMOUNTS IN   
                                                              AMOUNTS IN POUNDS STERLING           U.S. DOLLARS  
                                                      -------------------------------------------                
                                                                                                                 
                                                                                                     (NOTE 1)    
                                                                                                   ------------- 
CASH FLOWS FROM OPERATING ACTIVITIES                                                                             
Net loss.............................................       L(166,909)   L(346,564)    L (872,096) $  (1,450,121)
Adjustments to reconcile net loss to net cash                                                                    
  provided by operating activities                                                                               
  Depreciation.......................................           9,289       12,572         42,022         69,874 
  Changes in operating assets and liabilities:                                                                   
    Accounts receivable..............................            (100)         100       (590,350)      (981,634)
    Receivables from related party...................              --           --       (235,000)      (390,758)
    Other receivable.................................          (2,253)      (2,109)         3,285          5,462 
    Unbilled Receivables.............................              --           --       (422,872)      (703,152)
    Prepaid expenses.................................              --           --       (223,313)      (371,325)
    Other current assets.............................            (750)         750             --             -- 
    Accounts payable.................................           5,407       26,527        211,174        351,140 
    Accrued expenses and other liabilities...........           8,593        7,226        111,280        185,036 
    Accrued interest.................................             143       19,845         86,215        143,358 
    Taxes and social security payable................           3,862        9,935         35,442         58,933 
    Deferred Income..................................              --           --        228,244        379,525 
    Amounts payable under long term Contracts........              --           --        411,969        685,023 
                                                      ---------------  -----------  -------------  ------------- 
Net cash used in operating activities................        (142,718)    (271,718)    (1,214,000)    (2,018,639)
                                                      ---------------  -----------  -------------  ------------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                                                             
Purchases of equipment and fixtures..................         (22,417)     (16,746)      (148,266)      (246,537)
                                                      ---------------  -----------  -------------  ------------- 
Net cash used in investing activities................         (22,417)     (16,746)      (148,266)      (246,537)
                                                      ---------------  -----------  -------------  ------------- 

CASH FLOWS FROM FINANCING ACTIVITIES                                                                             
Proceeds from debenture loan from stockholder........              --      298,924      1,383,266      2,300,095 
Proceeds from issuance of ordinary shares............         167,500           --             --             -- 
                                                      ---------------  -----------  -------------  ------------- 
Net cash provided by financing activities............         167,500      298,924      1,383,266      2,300,095 
                                                      ---------------  -----------  -------------  ------------- 
Net increase in cash and cash equivalents............           2,365       10,460         21,000         34,919 
Cash and cash equivalents at the beginning of the                                                                
  year...............................................              43        2,408         12,868         21,397 
                                                      ---------------  -----------  -------------  ------------- 
Cash and cash equivalents at the end of the year.....     L     2,408     L 12,868     L   33,868  $      56,316 
                                                      ---------------  -----------  -------------  ------------- 
                                                      ---------------  -----------  -------------  ------------- 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                                 
Interest paid........................................     L        68        L  --         L   --  $          -- 
                                                      ---------------  -----------  -------------  ------------- 
                                                      ---------------  -----------  -------------  ------------- 

See accompanying notes

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                    

DESCRIPTION OF BUSINESS                                                         

TownPagesNet.com plc produces and delivers TownPages, an Internet-based 
interactive service organized to provide comprehensive, locally-focused         
information about specified towns and cities. The Company was incorporated in   
England and Wales on July 31, 1998 as Town Pages Holdings plc. The Company's    
name was changed to TownPagesNet.com plc and its subsidiary's name was changed  
from Town Pages Limited to Town Pages UK Limited in April 1999.                 

   At December 31, 1998, the Company and its subsidiary had incurred recurring
net losses and, as of that date, had an accumulated consolidated deficit of     
approximately L1.4 million. Substantially all of the losses have been financed  
through debenture loans from a related party (see notes 2 and 6). Management    
believes that it will be able to obtain additional funds through private or     
public equity, bank credit facilities, or refinancing of the existing facility  
with Glen Investments Limited. In the event that adequate funds are not         
available from these sources, the Company will reduce its level of spending. In 
these circumstances, and in the event that there is no public offering, Glen    
Investments Limited has given an undertaking that they will provide sufficient  
funds to the Company so that it is able to continue to meet its obligations as  
they fall due for the next twelve months.                                       

BASIS OF PRESENTATION                                                           

 The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. These financial statements  
do not comprise the Company's "statutory accounts" within the meaning of Section
240 of the U.K. Companies Act 1985 ("the Act"). Statutory accounts for the year 
ended December 31, 1998 will be delivered to the Registrar of Companies for     
England and Wales in due course. Statutory accounts of Town Pages Limited for   
the years ended December 31, 1997 and 1996 have been so delivered. Town Pages   
Limited was exempt from the requirement to cause an audit report of its         
statutory accounts in accordance with Section 240 of the Act for the years ended
December 31, 1997 and 1996. The accountants' reports on such accounts made for  
the purposes of section 249A of the Act were unqualified.                       

 The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary. All significant intercompany transactions and  
balances have been eliminated upon consolidation.                               

  In December, 1998 the Company acquired Town Pages Limited in a transaction
accounted for as a reorganization of companies under common control in a manner 
similar to pooling of interests. The transaction was effected by means of a     
share exchange whereby each share of Limited's ordinary stock was converted into
approximately 66.208 ordinary shares of the Company.                            

The financial statements expressed in pounds sterling as of December 31,
1998 were translated into United States Dollars, solely for the convenience of  
the reader, at the prevailing exchange rate of L1 = $1.6628. These translations 
should not be construed as representations that the pound sterling amounts      
actually represent U.S. dollar amounts or that they could be converted into U.S.
dollars at the rate indicated or at any other rate.                             

REVENUE RECOGNITION                                                             

  The Company's advertising revenues are derived principally from short-term
advertising contracts which are recognized ratably over the term of the         
contract. Certain advertising contracts contain a                               

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                        
guaranteed number of impressions (a view of an advertisement by a customer). To 
the extent that the impression deliveries are falling short of the guarantees,  
the Company defers recognition of the corresponding revenues.                   

Subscription revenues are for the set-up of customers on the TownPages  
directory. These fees are recognized ratably over the term of the subscription  
period which is generally one year.                                             

The Company's contract revenues are derived principally from services   
performed under development contracts for the design, coordination, and         
integration of the customer's content and links into the Town Pages directory.  
Fees for these services are recognized as the service is performed. These fees  
are recognized as revenue once the related activities have been performed and/or
the customer's web links are available on the Town Pages directory.             

    Revenues from web site design agreements are recognized using the percentage
of completion method where reliable estimates of costs to complete the contracts
are available. If reliable estimates of costs to complete are not available, the
completed contract method is used. Revenues under web site design agreements    
were L1,079,264 for the year ended December 31, 1998. This amount included      
unbilled receivables of L422,872. Unbilled receivables will be billed in        
accordance with billing schedules specified in the contracts to which they      
relate.                                                                         

  Deferred revenue is primarily comprised of payments received from web site
design contracts in advance of revenue recognition and billings in excess of    
recognized revenue relating to advertising contracts.                           

EQUIPMENT AND FIXTURES                                                          

Depreciation is provided so as to write down the cost of property and   
equipment to their estimated residual value over their expected useful lives    
which is typically 3-4 years. The principal annual depreciation rates and       
methods of calculation are as follows:                                          

                                                                [Download Table]
                                           
Computer equipment    3 years straight line
Furniture and         4 years reducing     
  fixtures            balance              
Equipment             3 years straight line

INCOME TAXES                                                                    

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No. 109, "ACCOUNTING FOR INCOME TAXES." Under the asset and
liability method of Statement No. 109, deferred income tax assets and           
liabilities are recognized for the future tax consequences attributable to      
carryforward losses and differences between the financial statement carrying    
amounts of existing assets and liabilities, and their respective tax bases.     
Deferred income tax assets and liabilities are measured using enacted tax rates 
expected to apply to taxable income in the years in which those temporary       
differences are expected to be recovered or settled. Deferred income tax assets 
are recorded at their likely realizable amount.                                 

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates  
and assumptions that affect the reported                                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                        
amounts of assets and liabilities and disclosure of contingent assets and       
liabilities at the date of the financial statements and the reported amounts of 
revenues and expenses during the reporting period. Actual results could differ  
from those estimates.                                                           

Certain estimates used by management are particularly susceptible to    
significant changes. Management believes that as of December 31, 1997 and 1998  
the estimates used are adequate based on the information currently available.   

FAIR VALUE OF FINANCIAL INSTRUMENTS                                             

The carrying amounts for the Company's financial instruments, including 
cash, accounts receivable, accounts payable, accrued expenses and long-term debt
approximate fair values.                                                        

 However, considerable judgment is required in interpreting market data to
develop estimates of fair value. Therefore, the estimates are not necessarily   
indicative of the amounts which could be realized or would be paid in a current 
market exchange. The effect of using different market assumptions and/or        
estimation methodologies may be material to the estimated fair value amount.    

CASH AND CASH EQUIVALENTS                                                       

The Company considers investments in highly liquid instruments purchased
with an original maturity of 90 days or less to be cash equivalents. Such       
amounts are stated at cost which approximates market value.                     

CONCENTRATIONS OF CREDIT AND OTHER RISKS                                        

   The Company performs ongoing credit evaluations of its customers' financial
condition and, generally, does not require collateral on accounts receivable.   
When required, the Company maintains allowances for credit losses and such      
losses have been within management's expectations. The Company's services are   
provided to customers in the United Kingdom. There was no allowance for doubtful
accounts established for the periods presented and write-offs of accounts       
receivable have not been significant.                                           

 The Company has entered into four contracts for the provision of Web site
design services. Amounts payable under web site design agreements consist of    
amounts payable to third party subcontractors and suppliers in connection with  
these four contracts which accounted for 19%, 14%, 30% and 33%, respectively, of
total net revenues for the year ended December 31, 1998. A substantial amount of
the services under these contracts has been performed by two subcontractors.    
Should the subcontractors be unable to perform their obligations under the      
subcontract agreements then the provision of certain services could be delayed  
as the Company enters into arrangements with other vendors.                     

PENSION PLAN                                                                    

 The Company sponsors defined contribution pension plans for the directors
and employees. The pension charge represents the amounts payable by the Company 
to the plans. All employees are eligible to join the plan and can make          
contributions into the plan. The Company contributes into the plans per the     
discretion of the board of directors. Contributions for all plans for the years 
ended                                                                           

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1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                        
December 31, 1996, December 31, 1997 and December 31, 1998 were zero, L9,429,   
and L19,327, respectively.                                                      

RESEARCH AND DEVELOPMENT                                                        

Research and development costs are charged to expense as incurred.      

ADVERTISING                                                                     

  Costs related to advertising are expensed as incurred. Advertising expense
was L24,943, L14,135, and L44,861 for the years ended December 31, 1996,        
December 31, 1997 and December 31, 1998 respectively.                           

PER SHARE AMOUNTS                                                               

In 1997, the FASB issued Statement No. 128 "EARNINGS PER SHARE." Under  
Statement 128, basic loss per share is computed on the basis of weighted average
common shares outstanding. Diluted loss per share considers potential common    
stock instruments in the calculation. Effective February 3, 1998, Staff         
Accounting Bulletin No. 98 was issued and amends the existing SEC staff guidance
primarily to give effect to Statement 128. Topic 4.D of SAB 98 essentially      
eliminated the cheap stock (convertible preferred stock, redeemable convertible 
preferred stock, common stock and common equivalent shares issued by a company  
at prices below the initial public offering price during the twelve-month period
prior to the offering) calculation from an initial public offering.             

  The Company has excluded all convertible debt, warrants and employee stock
options from the computation of diluted earnings per share because all such     
securities are anti-dilutive for all periods presented.                         

NEW ACCOUNTING PRONOUNCEMENTS                                                   

In June 1997, the FASB issued SFAS No. 130, "REPORTING COMPREHENSIVE    
INCOME". This Statement requires that changes in comprehensive income be shown  
in a financial statement that is displayed with the same prominence as other    
financial statements. The Statement is effective for annual periods beginning   
after December 15, 1997. To date, the Statement has not had a material impact on
the Company's financial position or results of operations.                      

   In June 1997, the FASB issued SFAS No 131, "DISCLOSURE ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION," which changes the way public companies     
report information about operating segments. SFAS No. 131, which is based on the
management approach to segment reporting, establishes requirements to report    
selected segment information quarterly and to report entity-wide disclosures    
about products and services, major customers, and the material countries in     
which the entity holds assets and reports revenue. The Statement is effective   
for annual periods beginning after December 15, 1997 and the Company adopted its
provisions in fiscal 1998. The Statement does not have a material impact on its 
financial position or results of operations.                                    

In June 1998, FASB issued SFAS No. 133, "Accounting for Derivatives and 
Hedging Activities," which establishes accounting and reporting standards for   
derivative instruments, including certain derivative instruments embedded in    
other contracts (collectively referred to as derivatives) and for hedging       
activities. SFAS No. 133 is effective for all fiscal quarters of fiscal years   
beginning after                                                                 

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1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                        
June 15, 1999. The adoption of SFAS No. 133 is not expected to have an impact on
the Company's results of operations, financial position, or cash flows.         

2 DEBENTURE LOANS                                                               

 To date, the Company has financed its operations primarily through direct
loans made by Glen Investments Limited, a corporation owned by the majority     
shareholder of the Company, who is a member of its board of directors, to Town  
Pages UK Limited. The loan has been established as a 9% line of credit facility 
which is due upon demand or at the time of an initial public offering. There is 
no specific limit on the line of credit, but it is at the discretion of Glen    
Investments Limited. The loan is secured by first liens on substantially all of 
the assets and properties of Town Pages UK Limited.                             

   Upon the closing of an initial public offering, L850,000 of the outstanding
balance on the credit facility will convert into 850,000 shares of              
TownPagesNet.com plc Series A preferred stock. The Series A preferred shares    
will be convertible into ordinary shares, at the option of the holder, at any   
time commencing 12 months after the completion of the initial public offering of
the Company's securities, at a conversion price equal to the sum which is 120%  
of the per share offering price of the Company's securities offered in the      
Company's initial public offering. The remaining outstanding balance will be    
paid through the proceeds received from the offering.                           

3 COMMITMENTS                                                                   

OPERATING LEASES                                                                

   The Company occupied office space under a short term operating license from
Westbrook Property Development Ltd., a company owned by the President and CEO of
the Company. Subsequent to the balance sheet date, Westbrook Property           
Development Ltd. assigned for L1 its lease of that property to the Company. The 
lease expires in 2014.                                                          

  Rent expense was L2,640, L32,000, and L40,300 for the years ended December
31, 1996, December 31, 1997 and December 31, 1998, respectively, which was all  
paid to the related party discussed above.                                      

4 STOCKHOLDERS EQUITY                                                           

PREFERRED STOCK                                                                 

    In December 1998, the Company's shareholders passed a resolution whereby the
articles of association of the Company were amended to increase the share       
capital of the Company to allow for the creation of a class of Series A         
preferred stock, L1 par value, whereby the Company is authorized to issue up to 
5,000,000 shares. The Series A preferred stock will not be redeemable, except by
mutual agreement of the Company and the holder commencing no earlier than 12    
months after the completion of the initial public offering of the Company's     
shares. The shares are non voting. The preferred stockholders are entitled to   
non-cumulative dividends at a 9% coupon rate. The liquidation rate of the Series
A preferred shares are at their par value, and the Series A preferred shares    
have preference in that amount in liquidation or dissolution over the ordinary  
shares. The terms of the Series A preferred shares prohibit the payment of cash 
dividends on the ordinary shares in any year until the Company also declares and
pays a 9% dividend on the Series A preferred shares. The Series A preferred     
shares are convertible into ordinary shares, at the option of the holder, at any
time commencing 12 months                                                       

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4 STOCKHOLDERS EQUITY (CONTINUED)                                               
after the completion of the initial public offering of the Company's securities,
at a conversion price which sum is 120% of the per share offering price of the  
Company's securities offered in the Company's initial public offering.          

STOCK OPTION PLAN                                                               

  In December, 1998 the board of directors approved a Stock Option Plan, the
Town Pages Executive Share Option Plan (the "Executive Plan") in the Company,   
whereby the Directors and employees may acquire ordinary shares. Upon completion
of an initial public offering, 700,000 ordinary shares will be issuable under   
the Executive Plan. Options will be granted by the compensation committee which 
consists wholly of outside directors. Options will be granted at prices to be   
determined by the compensation committee, which shall not be less than 100% of  
the fair market value of the ordinary shares on the date of grant. Options      
generally vest over a three year period from the date of grant.                 

5 INCOME TAX                                                                    

Due to operating losses and the inability to recognize a corporation tax
benefit therefrom, there is no provision for income taxes for 1996, 1997 or     
1998.                                                                           

 Deferred income taxes reflect the net tax effects of temporary difference
between the carrying amounts of assets and liabilities for financial reporting  
purposes and the amount used for corporation tax purposes. Significant          
components of the Company's deferred tax assets are as follows:                 

                                                        [Enlarge/Download Table]

                                                                      DECEMBER 31,            
                                                            --------------------------------- 
                                                                                              
                                                              1996        1997        1998    
                                                            ---------  ----------  ---------- 
Net operating loss carryforwards...........................   L34,061    L101,808    L251,016 
Depreciation...............................................       512       1,389       1,052 
                                                            ---------  ----------  ---------- 
Total deferred tax assets..................................    34,573     103,197     252,068 
Valuation allowance........................................   (34,573)   (103,197)   (252,068)
                                                            ---------  ----------  ---------- 
Net deferred tax asset.....................................    L   --     L    --     L    -- 
                                                            ---------  ----------  ---------- 
                                                            ---------  ----------  ---------- 

  Because of the Company's lack of earnings history, the deferred tax assets
have been fully offset by a valuation allowance. The valuation allowance        
increased by L68,624 and L148,871 during the years ended December 31, 1997 and  
December 31, 1998, respectively. As of December 31, 1998, the Company had net   
operating loss carryforwards of approximately L1,255,000. There is no expiration
date on the operating losses.                                                   

6 RELATED PARTIES                                                               

    As further discussed in note 3, the Company and Town Pages UK Limited occupy
office space under a lease assigned to the Company by Westbrook Property        
Development Ltd.                                                                

 As further discussed in note 2, the Company has been financed principally
from debenture loans provided from Glen Investments Limited. Balances payable to
the shareholder at December 31, 1997 and December 31, 1998 were L298,924 and    
L1,682,190, respectively.                                                       

F-12

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6 RELATED PARTIES (CONTINUED)                                                   
   In three separate transactions between June 14, 1996 and November 12, 1996,
Glen Investments Limited purchased a total of 57,395 ordinary shares of Town    
Pages UK Limited (approximately 76%) of its share capital) for an aggregate sum 
of L100,000. In December 1998, the percentage of Town Pages UK Limited's share  
capital owned by Glen Investments Limited was increased to 90% through the pro  
rata transfer of ordinary shares owned by the minority shareholders of Town     
Pages UK Limited. Glen Investments Limited transferred its ordinary shares of   
Town Pages UK Limited to Raven Ventures Limited, another corporate affiliate of 
the Company's majority shareholder.                                             

The majority shareholder of the Company, who is also a director of the  
Company, is a 25% shareholder of Leisure Concepts International, which owns 50% 
of Travel the Net Ltd. Travel the Net Ltd. is a development stage company which 
provides travel information and reservation services over the Internet. Travel  
the Net Ltd. is the exclusive provider of the travel "channel" on TownPages.    
Travel the Net Ltd. is currently one of the Company's largest customers,        
accounting for approximately 14% of revenues for the fiscal year ended December 
31, 1998.                                                                       

7 INITIAL PUBLIC OFFERING                                                       

In December, 1998, the board of directors authorized the filing of a    
registration statement with the Securities and Exchange Commission permitting   
the company to sell shares of its ordinary stock to the public. If the offering 
is consummated under terms presently anticipated, the debenture loan will be    
transferred from Town Pages UK Limited to the Company and L850,000 of the       
debenture loans will be converted into 850,000 shares of Series A preferred     
stock. The remainder of the debenture loan will be repaid with the proceeds from
the offering, bank credit facilities, or refinancing of the existing facility   
with Glen Investments Limited.                                                  

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ARTWORK FOR PROSPECTUS INSIDE BACK COVER PAGE CONSISTS OF VIEWS OF FOUR         
DIFFERENT TOWNPAGES WEBSITE PAGES.                                              

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

                                                                [Download Table]

                                                    PAGE   
                                                  ---------
                                                           
Prospectus Summary..............................          1
Risk Factors....................................          6
Exchange Rate Information.......................         18
Use of Proceeds.................................         19
Dividend Policy.................................         20
Capitalization..................................         21
Dilution........................................         22
Selected Financial Data.........................         23
Management's Discussion and Analysis of                    
  Financial Condition and Results of                       
  Operations....................................         24
Business........................................         31
Management......................................         46
Principal Stockholders..........................         56
Related Party Transactions......................         57
Description of Share Capital....................         59
Description of American Depositary Receipts.....         64
Taxation........................................         71
Shares Eligible for Future Sale.................         76
Underwriting....................................         77
Legal Matters...................................         79
Experts.........................................         79
Additional Information..........................         79
Service of Process and Enforcement of                      
  Liabilities...................................         80
Index to Consolidated Financial Statements......        F-1

[LOGO]
www.townpagesnet.com

TOWNPAGESNET.COM PLC

2,200,000 ORDINARY SHARES 

AMERICAN DEPOSITARY RECEIPTS
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR 
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION OR REPRESENTATIONS. NEITHER THE DELIVERY OF THIS       
PROSPECTUS NOR ANY SALE MADE UNDER THIS PROSPECTUS IMPLIES THAT THERE HAS BEEN  
NO CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS PROSPECTUS OR THAT THE          
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY DATE SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS AN OFFER TO SELL ONLY THE       
SECURITIES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN JURISDICTIONS    
WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS    
CURRENT ONLY AS OF ITS DATE.                                                    
--------------------------
   UNTIL MAY 25, 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT             
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.    
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO       
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR      
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.                                             

--------------------- 
PROSPECTUS
--------------------- 

DIRKS & COMPANY, INC. 
J.P. TURNER & COMPANY, L.L.C. 
SECURITY CAPITAL TRADING, INC.

APRIL 30, 1999

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

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