U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                       -----------------------------------

                                   FORM 10-QSB

         [X]      QUARTERLY   REPORT   UNDER   SECTION   13   OR  15(d)  OF  THE
                  SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
                  MARCH 31, 1997.

         [ ]      TRANSITION   REPORT   UNDER   SECTION   13  OR  15(d)  OF  THE
                  SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
                  _____________ TO ______________.


                        Commission File Number 33-32341-D


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

             Delaware                                   84-1127336
 (State or other jurisdiction of                 (I.R.S. Employer ID Number)
  incorporation or organization) 

9601 Katy Freeway, Suite 200, Houston, Texas                       77024
-------------------------------------------------      -------------------------
   (Address of principal executive offices)                      (Zip Code)


                    Issuer's telephone number: (713) 461-4999


                                      None
              (Former name, former address and former fiscal year,
                         if changed since last report.)


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

         Applicable  only  to issuers  involved in bankruptcy proceedings during
         the preceding five years

         Check whether the registrant  filed all documents and reports  required
         to be filed by Section  12, 13 or 15(d) of the  Exchange  Act after the
         distribution of securities under a plan confirmed by a court.

                                                        [   ] Yes    [   ] No

         Applicable only to corporate issuers

         As of April 25, 1997, the Registrant had 10,883,333 shares Common Stock
par value $.001 outstanding.

         Transitional Small Business Disclosure Format
         (Check one):

         [   ] Yes    [ X ] No

                                        1

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                                     Page
                                                                                                                     Number

Part I.           Financial Information

         Item I.           Financial Statements

<S>                                                                                                                     <C>
                           Condensed Balance Sheets as of March 31,
                             1997 (Unaudited) and December 31, 1996                                                       3

                           Condensed  Statements  of  Operations,  for the Three
                             Months  Ended  March 31,  1997 and 1996 and for the
                             period from  January 6, 1989  (Inception)  to March
                             31, 1997
                             (Unaudited)                                                                                  4

                           Condensed  Statements  of Cash  Flows,  for the Three
                             Months  Ended  March 31,  1997 and 1996 and for the
                             period from  January 6, 1989  (Inception)  to March
                             31, 1997
                             (Unaudited)                                                                                  5

                           Notes to Condensed Financial Statements                                                        6


         Item 2.           Management's Discussion and Analysis of
                             Financial Conditions and Results of
                             Operations                                                                                  10


Part II.  Other Information                                                                                              14
</TABLE>


                                        2

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development-Stage Company)

                            CONDENSED BALANCE SHEETS

                                     ASSETS
                                   
<TABLE>
<CAPTION>
                                                                                  (Unaudited)
                                                                                    March 31,            December 31,
                                                                                      1997                  1996
Current Assets:
<S>                                                                               <C>                    <C>        
      Cash                                                                        $ 2,157,427            $ 1,552,829
      Note receivable                                                                 500,000                800,000
      Accrued interest                                                                 42,805                  6,329
                                                                                  -----------            -----------
    Total Current Assets                                                            2,700,232              2,359,158

Other Assets:
      Note receivable, including accrued
       interest                                                                             -                527,806
      Other                                                                             5,130                  2,068
                                                                                   ----------              ---------


       Total Assets                                                               $ 2,705,362            $ 2,889,032
                                                                                  ===========            ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
      Accounts payable                                                            $    91,627            $    75,936
      Accounts payable, related party                                                  76,556                      -
      Accrued interest payable                                                              -                 23,706
      Other                                                                                 -                    100
                                                                                  -----------            -----------
       Total Current Liabilities                                                      168,183                 99,742

Note payable                                                                                -                420,000
                                                                                  -----------            -----------

       Total Liabilities                                                              168,183                519,742
                                                                                  -----------            -----------

Stockholders' Equity:
      Preferred stock, $.0001 par value,
       10,000,000 shares authorized
       none issued and outstanding                                                          -                      -

      Common Stock,  $.0001 par value,  65,000,000 shares authorized  10,883,333
       shares at March 31, 1997 and 9,053,667 shares at December 31,
       1996, issued and outstanding                                                     1,088                    905

      Additional paid-in capital                                                    3,094,291              2,664,291

      Deficit accumulated during
       development stage                                                             (558,200)              (295,906)
                                                                                  -----------            -----------

Total Stockholders' Equity                                                          2,537,179              2,369,290
                                                                                  -----------            -----------

Total Liabilities and Stockholders'
 Equity                                                                           $ 2,705,362            $ 2,889,032
                                                                                  ===========            ===========
</TABLE>

Note:  The  balance sheet at December 31, 1996,  has been taken from the audited
       financial statements at that date and condensed.

     The accompanying notes are an integral part of the financial statements.

                                        3

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)

                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                        January
                                                            Three Months         Three Months          6, 1989
                                                              Ended                Ended             (Inception) to
                                                              March 31,            March 31,             March 31,
                                                              1997                  1996                 1997

Revenue:
<S>                                                           <C>                <C>                   <C>        
         Interest income                                      $    29,959        $       126           $    70,830
                                                              -----------        -----------           -----------

Operating Expenses:
         Consulting fees, related party                            30,000                  -               140,000
         Stock issued for consulting fees                               -                  -                36,740
         Consulting fees                                           55,100                  -                55,100
         Legal and accounting                                      99,748              3,759               219,813
         Interest                                                   3,283                  -                26,989
         Salaries                                                   7,500                  -                17,500
         Rent                                                           -                750                20,750
         Travel                                                    86,645                  -                89,937
         Other                                                      9,977                402                22,201
                                                              -----------         ----------           -----------
           Total Operating Expenses                               292,253              4,911               629,030
                                                              -----------         ----------           -----------

Net (Loss)                                                    $  (262,294)        $   (4,785)          $  (558,200)
                                                              -----------         ----------           -----------

Net (Loss) Per Share                                         $      (0.03)       $     (0.08)         $      (0.84)
                                                             ============        ===========          ============

Weighted Average Number of Shares
 Outstanding                                                    9,580,608             60,000               663,955
                                                              ===========         ==========           ===========
</TABLE>







    The accompanying notes are an integral part of the financial statements.

                                        4

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)

                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                         January 6,
                                                                 Three Months        Three Months         1989
                                                                    Ended              Ended          (Inception) to
                                                                    March 31,          March 31,          March 31,
                                                                     1997                1996               1997
                                                                 ------------        -----------        --------

Cash flows from operating activities:
<S>                                                               <C>                <C>                <C>         
 Net (loss)                                                       $  (262,294)       $    (4,785)       $  (558,200)
 Adjustments to assets and reconcile net (loss)
  to net cash used by operating activities:
   Amortization                                                             -                  -                200
   Changes in assets and liabilities:
    (Increase) in accrued interest
         receivable                                                    (8,670)                 -            (42,805)
    Increase in other assets                                           (5,130)                 -             (5,130)
    Increase in accounts payable, related
         party                                                         76,556                  -             76,556
    Increase (decrease) in accounts and
         interest payable and other                                    (8,114)              4,911             89,560
                                                                 -------------         ----------       ------------
Net Cash Provided by (Used in)
  Operating Activities                                               (207,652)               126           (439,819)
                                                                  -----------        -----------        -----------

Cash flows from investing activities:
 Investment in notes receivable                                      (100,000)                 -         (1,400,000)
 Collection of note receivable                                        900,000                  -            900,000
 Organization costs                                                         -                  -               (200)
                                                                  -----------        -----------        -----------
Net Cash Provided by (Used in)
  Investing Activities                                                800,000                  -           (500,200)
                                                                  -----------        -----------        -----------

Cash flows from financing activities:
 Proceeds from note payable                                                 -                  -            500,000
 Proceeds from issuance of common
  stock, net of offering expenses                                      12,250                  -          2,597,446
                                                                   ----------        -----------        -----------
Net Cash Provided by Financing
  Activities                                                           12,250                  -          3,097,446
                                                                   ----------        -----------        -----------

Net increase in cash and cash
 equivalents                                                          604,598                126          2,157,427

Cash at Beginning of Period                                         1,552,829             14,539                  -
                                                                  -----------        -----------        -----------

Cash at End of Period                                             $ 2,157,427        $    14,665        $ 2,157,427
                                                                  ===========        ===========        ===========

Interest Paid                                                     $    26,989        $         -        $    26,989
                                                                  ===========        ===========        ===========

Income Taxes Paid                                                 $         -        $         -        $         -
                                                                  ===========        ===========        ===========

Supplemental schedule of noncash investing and financing activities:

  Cancellation of note payable for
   1,680,000 shares of Common Stock                               $   420,000        $         -        $   420,000
                                                                  -----------        -----------        -----------
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                        5

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                          December 31, 1996 (Unaudited)


(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation

         WorldPort  Communications,  Inc.  ("WorldPort"  or the  "Company") is a
         publicly-held  United States  corporation  incorporated in the state of
         Delaware   seeking  to  become  a   worldwide   provider   of  enhanced
         international   telecommunication   services  to  business   customers,
         individuals,    long    distance    carriers    and   other    emerging
         telecommunications service providers.

         The accompanying  condensed financial  statements have been prepared by
         the Company  without audit pursuant to the rules and regulations of the
         Securities and Exchange  Commission.  Certain  information and footnote
         disclosures  normally  included  in  financial  statements  prepared in
         accordance  with generally  accepted  accounting  principles  have been
         condensed  or omitted in this Form  10-QSB  pursuant  to such rules and
         regulations;  however,  management believes that the disclosures herein
         are adequate to make the  information  presented  not  misleading.  The
         financial  statements  and notes included in this Form 10-QSB should be
         read in  conjunction  with the financial  statements  and notes thereto
         included  in the  Company's  Annual  Report on Form 10-KSB for the year
         ended December 31, 1996.

         In the opinion of management,  the  accompanying  financial  statements
         contain  all   adjustments   (consisting   of  only  normal   recurring
         adjustments)  necessary  to  present  fairly  the  Company's  financial
         position as of March 31, 1997,  and the results of operations  and cash
         flows  for  the  three  months  ended  March  31,  1997  and  1996  and
         inception-to-date. The results of operations for the three months ended
         March 31, 1997 and 1996 are not necessarily indicative of the operating
         results for the full years.

         In  March  1997,  the  Financial   Accounting  Standards  Board  issued
         Statement of Financial  Accounting Standard No. 128, Earnings Per Share
         ("SFAS No. 128").  SFAS No. 128 replaces  Accounting  Principles  Board
         Opinion 15,  Earnings Per Share,  and  simplifies  the  computation  of
         earnings  (loss) per share  ("EPS") by replacing  the  presentation  of
         primary  EPS with basic  EPS,  which is  computed  by  dividing  income
         available  to common  stockholders  by the  weighted-average  number of
         common shares  outstanding  for the period.  SFAS No. 128 also requires
         dual  presentation  of basic and  diluted EPS on the face of the income
         statement  for  entities  with  complex  capital   structures,   and  a
         reconciliation  of the numerator and denominator  used in the basic EPS
         computation to the diluted EPS computation's numerator and denominator.
         SFAS No. 128 is effective for financial  statements  issued for periods
         ending after  December 15, 1997,  including  interim  periods.  Earlier
         application is not permitted.  Restatement of all prior period EPS data
         is required.

         Management  of the Company  believes  that the adoption of SFAS No. 128
         during the Company's  fiscal year 1998 will not have a material  effect
         on previously reported EPS.


                                        6

<PAGE>



(2)      PENDING ACQUISITIONS

         TNC Acquisition

         On April 23, 1997, the Company entered into an Asset Purchase Agreement
         to  acquire  substantially  all of the  telecommunications  assets  and
         operations of Telenational Communications, Ltd. ("TNC") in exchange for
         (i)  3,750,000  shares  of the  Company's  Common  Stock  and  (ii) the
         assumption  by  the  Company  of  certain  indebtedness  of TNC up to a
         maximum   of   $4.5   million.   The   purchased   assets   include   a
         telecommunications  switch and other  network  equipment,  customer and
         vendor  contracts,  an FCC  section  214  common  carrier  license,  an
         operator  services  center and other assets  sufficient to continue the
         ongoing  business  of  TNC.  The  transfer  or  assignment  of  certain
         contracts and licenses are subject to regulatory  and other  approvals,
         which the  Company  believes  that it and TNC will  receive.  The final
         purchase price is subject to adjustment if (i) liabilities in excess of
         $4.5  million  are  assumed,  (ii) the  Company is  required  to invoke
         certain  indemnifications  by TNC,  (iii)  there  are  certain  expense
         overruns, or (iv) there are certain rejected contracts.  The closing of
         the Asset  Purchase  Agreement is subject to (i) the Company's  receipt
         and acceptance of TNC's audited Financial Statements for 1996, (ii) the
         grant by the Federal  Communications  Commission of a Joint Application
         by  Final  Order  for  the  transfer  of  the  214  license  and  (iii)
         miscellaneous standard closing conditions.  The Company expects to hold
         the assets and operations acquired from TNC in a wholly-owned  Delaware
         subsidiary.  Pursuant  to the terms of a letter of intent  and  secured
         promissory notes repayable upon demand,  as of May 1, 1997, the Company
         has loaned  $900,000  to TNC to  provide  TNC with  working  capital in
         anticipation of the closing of the Asset Purchase Agreement.

         On April 29,  1997,  the  Company  and TNC  entered  into a  Management
         Service  Agreement  (the  "MSA"),  wherein the Company  provides to TNC
         day-to-day executive  management services.  The term of the MSA is from
         April 29, 1997 until the closing of the TNC Asset  Purchase  Agreement,
         unless sooner terminated by the Company.  Pursuant to the provisions of
         the  Management  Services  Agreement,   the  Company  provides  to  TNC
         day-to-day  executive  management  services.  WorldPort  has the power,
         authority,  and duties  ascribed to the position of the General Partner
         of TNC functioning as a chief executive officer, including authority to
         control and direct  TNC's use and  disposition  of  operating  cash and
         borrowed  funds and TNC's  general  business  operations.  In addition,
         WorldPort must (i) keep the General  Partner of TNC generally  informed
         of  its  activities,   (ii)  not  engage  the  services  of  any  other
         professional, the cost of which exceeds $10,000, without prior approval
         from  such  General  Partner,  and  (iii)  not  materially  change  the
         direction or operations of TNC's  business  without prior approval from
         such General Partner. The MSA also provides certain indemnifications to
         WorldPort  as well as a  covenant  not to sue or  assert  any  claim or
         action  against the Company  arising from the services  provided by the
         Company pursuant to the MSA.

         WWC Acquisition

         Effective  April 20, 1997,  the Company  entered into an Agreement  and
         Plan  of  Merger  to  acquire  The  Wallace  Wade  Company  ("WWC"),  a
         privately-owned Texas corporation pursuant to the Agreement and Plan of
         Merger  into  a  wholly-owned  subsidiary  of  the  Company  (the  "WWC
         Acquisition").  Mr. John  Dalton,  the  Company's  President  and Chief
         Executive  Officer,  is the sole shareholder of WWC. In connection with
         the WWC Acquisition, the Company will issue to Mr. Dalton (i) 1,400,000
         shares of the Company's  Common Stock,  of which 900,000 shares will be
         held pursuant to an escrow agreement subject to certain  adjustments to
         the  purchase  price  based  on  the  Company  entering  into  business
         agreements currently being negotiated by WWC and 500,000 shares will be
         held pursuant to the escrow  agreement  pending delivery to the Company
         of certain audited  Financial  Statements of WWC, (ii) $75,000 cash and
         (iii) a Promissory  Note in the amount of $175,000  payable as follows:
         

                                        7

<PAGE>



         $50,000  ninety  days  after  the  closing  of  the WWC Acquisition and
         $62,500 at the end of each of the 7th and  12th  months  following  the
         closing  of the WWC Acquisition.

(3)      NOVEMBER 1996 PRIVATE PLACEMENT OFFERING

         On March 13, 1997, the Company closed a Private Placement Offering (the
         "Offering")  of  3,333,333  shares of  Common  Stock at $0.75 per share
         pursuant  to  an  Offering   Memorandum  dated  November  1,  1996.  In
         connection  with the  Offering,  the Company  paid  Dinton  Trader S.A.
         ("Dinton  Trader") $100,000 for service rendered in connection with the
         Offering pursuant to the Financial Advisory Agreement dated October 31,
         1996 between Dinton Trader and the Company.

(4)      COMMITMENTS AND CONTINGENCIES

         Employment Agreements

         On April 7, 1997 the Company  agreed to terms on a one-year  employment
         agreement  with Mr.  W.  Dean  Spies to  serve as the  Company's  Chief
         Financial  Officer and  Treasurer  commencing on or before May 1, 1997.
         Mr.  Spies  will  earn a base  salary of  $82,000  per year and will be
         eligible to earn  incentive  bonuses during the next 12 months of up to
         $20,500 based on criteria to be  established by the Board of Directors.
         In addition, pursuant to Mr. Spies' employment agreement, Mr. Spies was
         granted options to purchase 120,000 shares of Common Stock based on the
         following vesting  schedule:  40,000 options vested as of April 7, 1997
         at an exercise  price of $0.75 per share;  40,000  options vested as of
         April 7, 1998 at an  exercise  price of $1.00  per  share;  and  40,000
         options  vested as of April 7, 1999 at an  exercise  price of $1.50 per
         share.  Mr.  Spies is the  nephew of Mr.  Dalton,  the Chief  Executive
         Officer of the Company.

         On April 8, 1997,  the Company  entered  into a  three-year  employment
         agreement with Mr. John Dalton to serve as the Company's  President and
         Chief Executive Officer. Mr. Dalton will earn a base salary of $156,000
         per year, and will be eligible to earn performance incentive bonuses up
         to  $100,000  during  the  next 12  months  based on  certain  business
         development and growth  criteria.  In addition,  Mr. Dalton was granted
         options to purchase Common Stock of the Company at an exercise price of
         $2.00 per  share,  based on the  following  vesting  schedule:  100,000
         options  vested  after one year of service to the  Company  and 100,000
         options vested after two years of service to the Company.

         Leases

         On April 15, 1997, the Company  entered into a three year lease for its
         administrative  offices  with lease  payments  beginning  at $2,000 per
         month  increasing to $3,916 per month after six months with  additional
         annual escalations on April 1 through the term of the lease.

(5)      SUBSEQUENT EVENTS

         Com Tech Settlement Agreement

         Effective  April  14,  1997,  the  Company  and Com Tech  International
         Corporation  ("Com  Tech")  entered into an agreement to settle any and
         all claims  that have been or could have been  asserted  in the lawsuit
         entitled  WorldPort  Communications,   Inc.,  formerly  known  as  Sage
         Resources,  Inc.,  a  Delaware  corporation,   plaintiff  v.  Com  Tech
         International  Corporation,  a Washington corporation,  defendant, Case
         No.   C96-4055SBA  (the  "Settlement   Agreement").   Pursuant  to  the
         Settlement  Agreement,  Com Tech  agreed to pay the Company all amounts
         due under a $500,000 promissory note  (the "Com Tech Note").  As of May
         1, 1997, Com Tech has paid the Company  $199,472.23,  which  represents
         

                                        8

<PAGE>



         $150,000 of principal and $49,473.23  of  accrued  interest through May
         10, 1997. Com Tech also agreed to make six payments to the Company,  on
         or before the  10th day of each month,  beginning June 10, 1997 through
         November 1997.  Each of the payments shall consist of (i) $58,333.33 of
         principal, (ii)   accrued interest on the outstanding balance at twelve
         percent (12%) per annum,  and (iii) $6,089.03,  which  represents  one-
         sixth of the total costs of litigation and other expenses owing.

         May 1997 Private Placement Offering

         The  Company  has  initiated  a Private  Placement  Offering  for up to
         1,666,667  shares of the Company's  Series A Preferred  Stock for $3.00
         per share  pursuant to an  Offering  Memorandum  dated May 8, 1997.  No
         shares  have been  issued nor have any  proceeds  yet been  received in
         connection  with  this  offering.  There can be no  assurance  that the
         Company will be successful in completing  this offering or that it will
         raise any capital pursuant to this offering.


                                        9

<PAGE>



                                     ITEM 2

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

WorldPort is a publicly-held United States corporation incorporated in the state
of  Delaware  seeking to become a worldwide  provider of enhanced  international
telecommunications  services to business customers,  individuals,  long distance
carriers and other emerging telecommunications service providers.

The Management's  Discussion and Analysis of Financial Conditions and Results of
Operations  ("MD&A")  contains  many  "forward-looking  statements"  within  the
meaning of the  Private  Securities  Litigation  Reform Act of 1995,  including,
among  others  (i)  results of  operations  (including  expected  changes in the
Company's  revenues and strategy);  (ii) the  contemplated  closing of the Asset
Purchase Agreement to acquire substantially all of the telecommunications assets
and  operations  of TNC;  (iii) the May 8, 1997  Private  Placement of 1,666,667
shares  of  Series A  Preferred  Stock;  (iv) the  contemplated  closing  of the
acquisition  of  WWC  pursuant  to the  Agreement  and  Plan  of  Merger  into a
wholly-owned  subsidiary of the Company;  and (v) the profitability,  if any, of
the  income-producing  commission-based  contract  with  an  international  long
distance service provider that WWC currently holds with a certain  long-distance
service provider.

These forward  looking  statements  are based  largely on the Company's  current
expectations  and are  subject  to a number of risks and  uncertainties.  Actual
results could differ materially from these forward-looking statements. Important
factors to consider in evaluating such  forward-looking  statements  include (i)
the  changes  in  external  competitive  market  factors;  (ii)  changes  in the
Company's  internal budgeting process which might impact trends in the Company's
results  of  operations;   (iii)  anticipated  working  capital  or  other  cash
requirements; (iv) changes in the Company's business strategy or an inability to
execute its strategy  due to  unanticipated  changes in the market;  (v) various
competitive factors that may prevent the Company from competing  successfully in
the market  place;  (vi) the Company's  lack of  liquidity;  (vii) the lack of a
public market for the Company's Series A Preferred Stock or for the Common Stock
into which it is  convertible;  (viii) the Company's lack of operating  history;
(ix)  ability to close the TNC or the WWC  transactions;  and (x) the  Company's
ability  to  attract  and retain  key  personnel  with the skills and  expertise
necessary to manage its growth. In light of these risks and uncertainties, there
can  be no  assurance  that  the  events  contemplated  by  the  forward-looking
statements contained in this Form 10-QSB will in fact occur.

Results of Operations

The Company is a development stage company that has not generated revenues other
than interest income since inception.  The Company's  strategy is to develop its
business through strategic acquisitions of telecommunication services companies,
such as TNC  and  WWC.  Currently,  however,  the  Company  does  not  have  any
operations.  Management  anticipates that the Company will not earn any revenues
until after the conclusion of a merger or acquisition,  if any.  Interest income
for the three months  ended March 31, 1997 was $29,959  compared to $126 for the
same period in 1996.  The  increase  was due to the  interest  from (i) the note
receivable from Global Star International,  Inc. (the "GSI Note") which was paid
in full on March 6, 1997 and (ii) the Com Tech Note which has been accrued,  but
not fully paid. As of May 1, 1997, Com Tech has paid the Company  $199,472.23 on
the Com Tech Note. See "Liquidity and Capital Resources."

Liquidity and Capital Resources

The Company has limited working  capital.  Expansion of the Company will require
substantial continuing capital investment. Although the Company has been able to
arrange debt facilities or equity  financing to date,  there can be no assurance
that  sufficient  debt  financing or equity will continue to be available in the
future  or that it  will  be  available  on  terms  acceptable  to the  Company.
Substantial additional debt or equity financing may be needed for the Company to
achieve its  short-term  and long-term  business  objectives.  Failure to obtain
sufficient  capital  could  materially  affect  the  Company's  acquisition  and


                                       10

<PAGE>



operating strategies.  The Company expects  that future  financing  will include
equity  placements, however, no assurance can be  given  that the  Company  will
be able to  obtain  additional financing on reasonable terms, if at all.

On July 1, 1996, the Company borrowed from Maroon Bells Capital  Partners,  Inc.
("Maroon  Bells")  $500,000 and loaned this amount (the "Maroon  Bells Note") to
Com  Tech.  The  Maroon  Bells  Note  bore  interest  at  10%  per  annum,   was
collateralized  by an  assignment  of the Com Tech  Note and was due on April 1,
1997.  On October 3, 1996,  the Company was notified by Maroon Bells that it had
assigned  $80,000  principal  amount  of  the  Maroon  Bells  Note,  to  certain
non-affiliated  entities  (the  "Assignees").  On October 15, 1996,  the Company
negotiated  a  conversion  of the $80,000 of assigned  debt in exchange  for the
issuance of 1,000,000  shares of Company Common Stock to the Assignees  pursuant
to  Regulation  S. On March 7, 1997 Maroon Bells and the Company  entered into a
Stock Issuance and Indemnification  Agreement whereby (i) Maroon Bells agreed to
cancel the $420,000 outstanding principal and all accrued but unpaid interest as
of that date in exchange for 1,680,000 shares (the "Indemnification  Shares") of
the Company's  Common  Stock,  (ii) Maroon Bells agreed to indemnify the Company
for an  amount  up to  $460,000  in cash,  the  Indemnification  Shares or other
Company shares (based on $.25 per share), or a combination thereof, in the event
that the Company is unsuccessful in securing repayment of the Com Tech Note, and
(iii) Maroon Bells and the Company agreed to divide equally any proceeds, assets
or other consideration  received by the Company as a result of the Com Tech Note
in excess of  $540,000.  Maroon Bells  agreed to refrain  from  transferring  or
selling the Indemnification Shares until such time as the disposition of the Com
Tech Note was determined.

Effective  April 14, 1997,  the Company and Com Tech entered into the Settlement
Agreement  with  respect  to the  Com  Tech  Note.  Pursuant  to the  Settlement
Agreement, Com Tech agreed to pay the Company all amounts due under the Com Tech
Note.  As of May 1,  1997,  Com Tech has paid  the  Company  $199,472.23,  which
represents $150,000 of principal and $49,473.23 accrued interest through May 10,
1997. Com Tech also agreed to make six payments to the Company, on or before the
10th day of each month,  beginning June 10, 1997 through  November 1997. Each of
the payments shall consist of (i) $58,333.33 of principal, (ii) accrued interest
on the  outstanding  balance  at  twelve  percent  (12%)  per  annum,  and (iii)
$6,089.03, which represents one-sixth of the total costs of litigation and other
expenses owing.

On March 7, 1997,  the Company and Maroon Bells entered into a twelve (12) month
agreement  (the  "Advisory  Agreement")  wherein  Maroon Bells agreed to provide
certain  services  to the  Company in  exchange  for (a) a monthly  retainer  of
$10,000  per month  (accrued  but not  payable  until  such time as the  Company
successfully  raises  cumulative  proceeds  of  $5,000,000  in  equity  or  debt
financing)  and (b)  certain  success  fees  payable  when and if  Maroon  Bells
successfully  assists the  Company in certain  transactions  including,  but not
limited to, mergers and  acquisitions.  As part of the Advisory  Agreement,  the
Company agreed to reimburse  Maroon Bells for certain  travel and  out-of-pocket
expenses incurred by Maroon Bells on behalf of the Company.

On March 13,  1997,  the  Company  closed a  Private  Placement  Offering  under
Regulation D (the  "Offering") of 3,333,333  shares of Common Stock at $0.75 per
share  pursuant to an Offering  Memorandum  dated  November 1, 1996. The Company
received  gross  proceeds from the Offering  totaling  $2,500,000.  The Offering
granted the investors  certain demand and incidental  registration  rights.  The
Company will use the proceeds from the Offering for acquisitions,  including WWC
and  TNC,  and for  general  working  capital  purposes.  The  Company  received
$2,500,000  proceeds  from the  Offering,  all of which  was  received  prior to
December 31, 1996, except for $112,250 which was received by March 13, 1997.

On May 8, 1997,  the Company  initiated a Private  Placement  Offering for up to
$5,000,000 under Regulation D (the "May 8, 1997 Private Placement") of 1,666,667
shares of Series A  Preferred  Stock at $3.00 per share  pursuant to an Offering
Memorandum  dated May 8,  1997.  Holders  of Series A  Preferred  Stock  will be
entitled to receive annual  cumulative  dividends of $.24 per share,  payable in
cash or in shares of Common Stock of WorldPort,  at WorldPort's  option,  as and
when such dividends are declared by the Company's board of directors.  No public
market exists for the Company's Series A Preferred Stock or for the Common Stock
into which it is convertible  and none is expected to develop as a result of the
May 8, 1997  Private  Placement.  The offer and sale of the  Series A  Preferred
Stock is not being  registered  under the  Securities  Act of 1933,  as amended,
under U.S. or state  securities  laws or under the securities  laws of any other


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jurisdictions, and the Company's  Series  A Preferred  Stock or the Common Stock
into which it is convertible  may not be resold or otherwise  transferred unless
it  is  subsequently  registered  or  an  exemption from applicable registration
requirements is available.  There can  be no assurance  that the Company will be
successful  in  completing  the May 8,  1997  Private  Placement or that it will
raise any capital pursuant to the May 8, 1997 Private Placement.

Subsequent Events

Employment Agreements

On April 7, 1997 the Company agreed to terms on a one-year employment  agreement
with Mr. W. Dean Spies to serve as the  Company's  Chief  Financial  Officer and
Treasurer commencing on or before May 1, 1997. Mr. Spies will earn a base salary
of $82,000 per year and will be eligible to earn  incentive  bonuses  during the
next 12 months of up to $20,500 based on criteria to be established by the Board
of Directors.  In addition,  pursuant to Mr. Spies'  employment  agreement,  Mr.
Spies was granted  options to purchase  120,000  shares of Common Stock based on
the following vesting schedule:  40,000 options vested as of April 7, 1997 at an
exercise price of $0.75 per share;  40,000 options vested as of April 7, 1998 at
an exercise  price of $1.00 per share;  and 40,000 options vested as of April 7,
1999 at an  exercise  price of $1.50 per share.  Mr.  Spies is the nephew of Mr.
Dalton, the Chief Executive Officer of the Company.

On April 8, 1997,  the Company  entered into a three-year  employment  agreement
with Mr. John Dalton to serve as the  Company's  President  and Chief  Executive
Officer.  Mr.  Dalton will earn a base salary of $156,000 per year,  and will be
eligible to earn performance incentive bonuses up to $100,000 during the next 12
months based on certain business  development and growth criteria.  In addition,
Mr.  Dalton was granted  options to purchase  Common  Stock of the Company at an
exercise  price of $2.00 per share,  based on the  following  vesting  schedule:
100,000  options  vested  after one year of service to the  Company  and 100,000
options vested after two years of service to the Company.

In connection  with the hiring of the Company's new executive  management  team,
Mr.  Edward  Mooney  resigned as President  and Chief  Executive  Officer of the
Company effective April 7, 1997.

Leases

The Company  maintains  its offices at 9601 Katy  Freeway,  Suite 200,  Houston,
Texas 77024,  pursuant to a three-year lease agreement dated April 15, 1997. The
Company's lease payment for the office space, which includes basic utilities, is
initially $2,000 per month, increasing to $3,916 per month after six months with
additional annual escalations on April 1 through the term of the lease.

TNC Acquisition

On April 23,  1997,  the Company  entered  into an Asset  Purchase  Agreement to
acquire substantially all of the telecommunications assets and operations of TNC
in exchange for (i) 3,750,000  shares of the Company's Common Stock and (ii) the
assumption by the Company of certain indebtedness of TNC up to a maximum of $4.5
million.  The purchased  assets  include a  telecommunications  switch and other
network  equipment,  customer  and vendor  contracts,  an FCC section 214 common
carrier  license,  an operator  services  center and other assets  sufficient to
continue  the ongoing  business of TNC. The  transfer or  assignment  of certain
contracts and licenses are subject to regulatory and other approvals,  which the
Company  believes  that it and TNC will  receive.  The final  purchase  price is
subject to adjustment if (i)  liabilities in excess of $4.5 million are assumed,
(ii) the Company is required to invoke  certain  indemnifications  by TNC, (iii)
there  are  certain  expense  overruns,  or  (iv)  there  are  certain  rejected
contracts.  The closing of the Asset  Purchase  Agreement  is subject to (i) the
Company's receipt and acceptance of TNC's audited Financial Statements for 1996,
(ii) the grant by the Federal  Communications  Commission of a Joint Application
by Final  Order for the  transfer  of the 214  license  and (iii)  miscellaneous
standard  closing  conditions.  The  Company  expects  to hold  the  assets  and
operations acquired from TNC in a wholly-owned Delaware subsidiary.  Pursuant to


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<PAGE>



the terms of a letter of intent and  secured  promissory  notes  repayable  upon
demand,  the  Company has loaned  $900,000  to TNC to provide  TNC with  working
capital in anticipation of the closing of the Asset Purchase Agreement.

TNC is a Nebraska  limited  partnership  founded in 1989 to provide domestic and
international   telecommunications  services.  TNC  operates  telecommunications
switches  and an operator  services  platform in Omaha,  Nebraska  from which it
provides  enhanced  services,  such as global  calling  cards and  international
prepaid debit cards to customers primarily in the United States,  Western Europe
and Latin America.  TNC has  approximately 50 employees,  including 30 operators
that provide customers worldwide with assistance in completing calls to the U.S.
and international  destinations  through its automated operator services and its
live operators.  TNC provides customer support in English and in other languages
such as Spanish,  French, German,  Portuguese and Mandarin. TNC's U.S. switching
and operator  services  center  enables  customers in foreign  countries to take
advantage of least cost routing and transmission  quality for calls made between
foreign  countries.  TNC's services are currently  marketed in over 20 countries
through  various  distribution  channels.  The  majority of TNC's  revenues  are
generated  from  international   customers  including  business  and  individual
customers  and, in some cases,  from  wholesale  customers  and major  corporate
clients.

WWC Acquisition

Effective  April 20, 1997,  the Company  entered  into an Agreement  and Plan of
Merger to acquire WWC into a  wholly-owned  subsidiary  of the Company (the "WWC
Acquisition").  WWC is a  telecommunications  marketing  consulting  firm  which
produces and  implements  marketing  strategies  for clients  ranging from small
companies to large corporate clients.  WWC currently holds one  income-producing
commission-based  contract with an international long distance service provider.
As of the effective date of the WWC Acquisition,  WWC was in negotiations with a
large  telecommunications  network  operator.  WWC is  also in  negotiations  to
establish a  distribution  channel for  international  calling cards and prepaid
debit cards.

Mr. John Dalton,  the Company's  President and Chief Executive  Officer,  is the
sole  shareholder of WWC. In connection  with the WWC  transaction,  the Company
will issue to Mr. Dalton (i) 1,400,000  shares of the Company's Common Stock, of
which  900,000  shares will be held pursuant to an escrow  agreement  subject to
certain  adjustments  to the purchase  price based on the Company  entering into
business agreements currently being negotiated by WWC and 500,000 shares will be
held pursuant to the escrow agreement pending delivery to the Company of certain
audited  Financial  Statements  of WWC, (ii) $75,000 cash and (iii) a Promissory
Note in the amount of $175,000 payable as follows: $50,000 ninety days after the
closing of the  Agreement  and Plan of Merger and  $62,500 at the end of each of
the 7th and 12th months after the closing of the Agreement and Plan of Merger.

There can be no assurance that the WWC  Acquisition  will be consummated nor can
there be any assurance that the contemplated  contracts and business development
opportunities  currently  being  negotiated by WWC will be consummated by either
WWC or the Company.

Management Services Agreement

On April 29,  1997,  the  Company  and TNC entered  into a  Management  Services
Agreement,  wherein  the  Company  will  provide  to  TNC  day-to-day  executive
management services. The term of the Management Services Agreement is from April
29, 1997 until the closing of the TNC Asset  Purchase  Agreement,  unless sooner
terminated by the Company.  The Management  Services  Agreement provides certain
indemnifications  to  WorldPort  as well as a covenant  not to sue or assert any
claim or action  against the Company  arising from the services  provided by the
Company pursuant to the Management Services Agreement.

Private Placement

On May 8, 1997,  the Company  initiated a Private  Placement  Offering for up to
$5,000,000 under Regulation D of 1,666,667 shares of Series A Preferred Stock at
$3.00 per share  pursuant  to an  Offering  Memorandum  dated May 8,  1997.  See
"Liquidity and Capital Resources".

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<PAGE>




                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings


         On November 8, 1996,  the Company  filed a lawsuit  against Com Tech in
         the United States District Court in the Northern District of California
         (Case No. C-96-4055). The Company filed the lawsuit to collect $500,000
         plus  interest and  attorney's  fees for amounts that Com Tech borrowed
         from the Company that is now due, owing and unpaid.

         On April 14, 1997, the Company and Com Tech entered into the Settlement
         Agreement. Pursuant to the Settlement Agreement, Com Tech agreed to pay
         the Company all amounts due under the Com Tech Note. See "Liquidity and
         Capital Resources".

Item 6.  Exhibits and Reports on Form 8-K

                  Exhibits
                  2.1    Agreement and Plan of Merger by and among  the Company,
                         WorldPort Acquisitions, Inc., The Wallace Wade Company,
                         and John W. Dalton, dated April 20, 1997.
                  2.2    Asset Purchase Agreement by and between the Company and
                         Telenational  Communications Limited Partnership, dated
                         April 23, 1997.
                  10.1   Lease  by  and  between  the  Company  and Mission Life
                         Insurance Company, dated April 15, 1997.
                  10.2   Settlement Agreement by and between Com Tech
                         International   Corporation   and  WorldPort
                         Communications, Inc., dated April 14, 1997.
                  10.3   Management Services Agreement by  and between WorldPort
                         Communications,  Inc.  and  Telenational Communications
                         Limited Partnership, dated April 29, 1997.
                  10.4   Employment  Agreement  by and between W. Dean Spies and
                         the Company effective April 7, 1997.
                  27     Financial Data Schedule


                  Reports on Form 8-K
                  None.

                                                        14

<PAGE>



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                        WORLDPORT COMMUNICATIONS, INC.




Date May 15, 1997                       By         /s/ Dean Spies
     ------------                          ----------------------
                                                 W. Dean Spies
                                                 Chief Financial Officer



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