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
              SEPTEMBER 30, 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 registrant as specified in its charter)


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

As of November 18, 1997, the  Registrant  had 16,033,333  shares of Common Stock
par value  $0.0001  and  493,889  shares of  Preferred  Stock par value  $0.0001
outstanding.

Transitional Small Business Disclosure Format (Check one):

[ ] Yes    [X] No




                                       1
<PAGE>


                         WORLDPORT COMMUNICATIONS, INC.
                                TABLE OF CONTENTS


                                                                            Page

PART I - FINANCIAL INFORMATION

         Item 1.    Financial Statements

                    Condensed Consolidated Balance Sheets as of
                    September  30, 1997 and  December  31, 1996 . . . . . . .  3
 
                    Condensed Consolidated Statements of Operations
                    for the Three and Nine Months Ended September 30,
                    1997  and  1996 . . . . . . . . . . . . . . . . . . . . .  4

                    Condensed Consolidated Statements of Cash Flows
                    For the Nine Months Ended  September  30, 1997 and 1996 .  5
 
                    Notes to Condensed  Consolidated Financial Statements . .  6

         Item 2.    Management's Discussion and Analysis of
                    Financial  Condition  and Results of  Operations  . . .   12


PART II - OTHER INFORMATION

         Item 1.    Legal  Proceedings  . . . . . . . . . . . . . . . . . .   18

         Item 6.    Exhibits  and Reports on Form 8-K . . . . . . . . . . .   18


SIGNATURE                                                                     21






                                       2
<PAGE>


                                               PART I - FINANCIAL INFORMATON

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>

                                      WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                                           CONDENSED CONSOLIDATED BALANCE SHEETS

                                                          ASSETS
<CAPTION>

                                                                                     September 30,         December 31,

                                                                                         1997                 1996
                                                                                         -----                ----
                                                                                      (Unaudited)
CURRENT ASSETS:
<S>                                                                                     <C>                     <C>        
     Cash                                                                               $      48,377           $ 1,552,829
     Accounts receivable, net of allowance for doubtful accounts of $24,500                   627,700                     -
     Note receivable, including accrued interest                                              117,444               806,329
     Prepaid expenses  and other current assets                                               272,243                     -
                                                                                          -----------           -----------

                    Total current assets                                                    1,065,764             2,359,158

PROPERTY AND EQUIPMENT, net of accumulated
     depreciation and amortization                                                          1,110,478                     -

OTHER ASSETS
     Goodwill and other intangible assets, net of accumulated amortization                  6,911,104                     -
     Note receivable, including accrued interest                                                    -               527,806
     Other                                                                                    143,118                 2,068
                                                                                          -----------           -----------

                    TOTAL ASSETS                                                          $ 9,230,464           $ 2,889,032
                                                                                          ===========           ===========

                                           LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Short-term debt                                                                       $  500,000             $       -
     Short-term debt - related parties                                                        400,000                     -
     Current portion of capital lease obligations                                             148,810                     -
     Accounts payable and accrued expenses                                                  2,624,086                99,742
     Other current liabilities                                                                 59,280                     -
                                                                                          -----------           -----------

                    Total current liabilities                                               3,732,176                99,742

NOTE PAYABLE                                                                                        -               420,000

LONG-TERM OBLIGATIONS UNDER CAPITAL LEASES,
     net of current portion                                                                   270,890                     -

OTHER LONG-TERM LIABILITIES                                                                    76,360

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $0.0001 par value, 10,000,000 shares
        authorized, 163,889 and no shares outstanding, respectively                                16                     -
     Common stock, $0.0001 par value, 65,000,000 shares authorized,
        16,033,333 and 9,053,667 shares issued and outstanding respectively                     1,603                   905
     Additional paid-in capital                                                             7,325,011             2,664,291
     Retained deficit                                                                     (2,175,592)             (295,906)
                                                                                          -----------           -----------

                    Total stockholders' equity                                              5,151,038             2,369,290
                                                                                          -----------           -----------


                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $ 9,230,464           $ 2,889,032
                                                                                          ===========           ===========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       3
<PAGE>



<TABLE>

                                      WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                        (Unaudited)
<CAPTION>




                                                                Three Months Ended                  Nine Months Ended
                                                                  September 30                        September 30
                                                          -----------------------------     -------------------------------
                                                               1997              1996             1997              1996
                                                              ------            ------           ------            ------

<S>                                                       <C>              <C>              <C>                <C>         
REVENUES                                                  $  1,506,238     $          -     $  1,694,787       $          -

COST OF SERVICES                                             1,346,865                -        1,541,277                  -
                                                          ------------     ------------     ------------       ------------

     Gross margin                                              159,373                -          153,510                  -

OPERATING EXPENSES:
     Selling, general and
        administrative expenses                              1,062,150           21,525        1,714,798           141,821
     Depreciation and amortization                             283,033                -          312,803                 -
                                                          ------------     ------------     ------------       -----------

     Operating loss                                         (1,185,810)         (21,525)      (1,874,091)         (141,821)
                                                          ------------     ------------     ------------       -----------


OTHER INCOME (EXPENSE)
     Interest income                                             5,833           12,639           65,619            12,765
     Interest (expense)                                        (62,187)               -          (71,212)                -
                                                          ------------     ------------     ------------       ----------- 

                                                               (56,354)          12,639           (5,593)           12,765
                                                          ------------     ------------     ------------       -----------
LOSS BEFORE PROVISION
     FOR INCOME TAXES                                       (1,242,164)          (8,886)      (1,879,684)         (129,056)

PROVISION FOR INCOME TAXES                                           -                -                 -                -
                                                         -------------    -------------     ------------     -------------

NET LOSS                                                 $  (1,242,164)   $      (8,886)    $ (1,879,684)    $    (129,056)
                                                         =============    =============     ============     =============

NET LOSS PER SHARE                                       $       (0.08)   $           -     $      (0.15)    $       (0.08)
                                                         =============    =============     ============     =============
WEIGHTED AVERAGE
     SHARES OUTSTANDING                                     15,987,682        4,220,000       12,304,915         1,520,513
                                                         =============    =============     ============     =============

</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       4
<PAGE>



<TABLE>

                                      WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (Unaudited)
<CAPTION>

                                                                                                 Nine Months Ended
                                                                                                   September 30
                                                                                        --------------------------------
                                                                                          1997                    1996
                                                                                         ------                  ------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                   <C>                   <C>            
Net loss                                                                              $    (1,879,684)      $     (129,056)
Adjustments to reconcile net loss to net cash
     used by operating activities -
          Depreciation and amortization                                                       312,803                    -
          (Increase) decrease in accounts receivable                                              234                 (160)
          Decrease in accrued interest receivable                                              33,357                    -
          Increase in prepaid expenses and other assets                                      (217,709)                   -
          Increase in accounts payable and accrued
               expenses and other liabilities                                                  61,492                  920
                                                                                      ---------------        -------------

                    Net cash used by operating activities                                  (1,689,507)            (128,296)

CASH FLOWS FROM INVESTING ACTIVITIES:
          Advances related to acquisitions                                                 (1,178,000)                    -
          Cash paid in connection with acquisitions, net of cash acquired                     (36,941)                    -
          Issuance of notes receivable                                                       (100,000)                    -
          Collection of notes receivable                                                    1,283,333                     -
          Capital expenditures                                                                (92,767)                    -
                                                                                      ---------------        --------------

                    Net cash used by investing activities                                    (124,375)                    -

CASH FLOWS FROM FINANCING ACTIVITIES:
          Principal payments on short-term debt                                              (262,278)                    -
          Payments on obligations under capital lease                                         (34,292)                    -
          Proceeds from issuance of notes payable - related parties                           225,000                     -
          Proceeds from issuance of preferred stock                                           368,750                     -
          Proceeds from issuance of common stock, net of offering expenses                     12,250               114,400
                                                                                      ---------------        --------------

                    Net cash provided by financing activities                                 309,430               114,400
                                                                                      ---------------        --------------

NET DECREASE IN CASH                                                                       (1,504,452)              (13,896)

CASH, beginning of the period                                                               1,552,829                14,539
                                                                                      ---------------        --------------

CASH, end of the period                                                               $        48,377        $          643
                                                                                      ===============        ==============

CASH PAID DURING THE PERIOD FOR INTEREST                                              $        47,136        $            -
                                                                                      ===============        ==============

CASH PAID DURING THE PERIOD FOR TAXES                                                 $             -        $            -
                                                                                      ===============        ==============

SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:

          Cancellation of note payable for 1,680,000 shares of common stock           $       420,000        $            -
                                                                                      ===============        ==============

          Issuance of short-term debt to related party in connection       
             with acquisition                                                         $       175,000        $            -
                                                                                      ===============        ==============
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       5
<PAGE>


                 WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         Basis of Presentation
         ---------------------

         WorldPort  Communications,  Inc. and its subsidiaries,  ("WorldPort" or
         the "Company"),  a Delaware corporation,  is a facilities-based network
         provider of  international  and domestic  long distance  services.  The
         Company's strategy is to provide  international voice and data services
         to long  distance  carriers,  corporations,  businesses,  marketers and
         distributors  of  international  long distance  services,  and to other
         alternative  telecommunications  services  providers  primarily  in the
         United States,  Western  Europe and Latin  America.  From its switching
         center  in Omaha,  Nebraska,  the  Company  provides  services  such as
         international  least cost  routing,  global  calling card  and enhanced
         services and operator services.

         The accompanying  condensed consolidated 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 thereto 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/A for the year ended December 31, 1996.

         In the opinion of the Company's management,  the accompanying condensed
         consolidated  financial statements contain all adjustments  (consisting
         of only normal recurring  adjustments)  necessary to present fairly the
         Company's  financial position as of September 30, 1997, and the results
         of  operations  for the three and nine months ended  September 30, 1997
         and 1996 and cash flows for the nine months  ended  September  30, 1997
         and 1996. The results of operations for the three and nine months ended
         September  30,  1997  and 1996 are not  necessarily  indicative  of the
         operating results for the full years.

         Prior to the closing of the acquisitions of Telenational Communications
         Limited  Partnership  ("TNC") and The Wallace Wade Company ("WWC") (see
         Note 2), the Company was a  development  stage  enterprise  and devoted
         substantially   all  of  its  efforts  to  identifying   and  acquiring
         businesses,  developing  a public  market  for its  stock  and  raising
         capital.  With the  closing  of the  acquisitions  of TNC and WWC,  the
         Company   now  has   operating   assets  and   continuing   operations.
         Accordingly,  the  financial  statement  presentation  and  disclosures
         required for development stage enterprises have been omitted.

         Goodwill and Other Intangible Assets
         ------------------------------------

         The  excess  purchase  price  over fair  value of net  assets  acquired
         ("goodwill") is amortized using the straight-line method over 10 years.


                                       6
<PAGE>

         Other intangible assets,  predominantly  contracts, are amortized using
         the straight-line method over 5 years.

         The Company  periodically  evaluates the recoverability of its goodwill
         and other intangible  assets and measures the amount of impairment,  if
         any, by assessing current and future levels of income and cash flows as
         well as other factors, such as business trends and prospects and market
         and economic conditions.

         Risk Factors
         ------------

         The  Company  is  subject  to  various  risks  in  connection  with the
         operation of its business  including,  among other  things,  changes in
         external competitive market factors,  changes in the Company's business
         strategy or an inability  to execute its strategy due to  unanticipated
         changes in the market,  the  Company's  lack of liquidity and operating
         history  and  anticipated  working  capital or other cash  requirements
         including the Company's  current working capital deficit and dependence
         upon additional capital investment.

         Liquidity
         ---------

         Funding of the Company's  working capital  deficit,  current and future
         operating losses and expansion of the Company will require  substantial
         continuing capital investment.  The Company's strategy is to fund these
         cash   requirements   through  debt  facilities  or  additional  equity
         financing.   Although  the  Company  has  been  able  to  arrange  debt
         facilities or equity  financing to date, there can be no assurance that
         sufficient  debt or equity  financing  will continue to be available in
         the  future or that it will be  available  on terms  acceptable  to the
         Company.  Failure to obtain sufficient  capital could materially affect
         the Company's acquisition and 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 (see Note 5). The
         Company has currently  made none of its scheduled  payments on its debt
         obligation to Value Partners, Ltd. (see Note 3).

         Pending Accounting Pronouncement
         --------------------------------

         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 will not have a  material  effect on  previously  reported
         EPS.


                                       7
<PAGE>

         Certain Reclassifications
         -------------------------

         Certain reclassifications have been made to amounts previously reported
         to conform to current period presentation.

(2)      ACQUISITIONS
         ------------

         TNC Acquisition
         ---------------

         On  June  20,  1997,   the  Company   completed  the   acquisition   of
         substantially  all of the  telecommunications  assets and operations of
         TNC (the "TNC  Acquisition")  pursuant to that certain  Asset  Purchase
         Agreement  dated April 23, 1997 (as amended by  Amendment  No. 1 to the
         Asset Purchase  Agreement dated June 20, 1997,  collectively the "Asset
         Purchase Agreement").  The results of operations of TNC are included in
         the financial  statements of the Company from the date of  acquisition,
         June 20, 1997.

         The assets and  operations  of TNC were  purchased  in exchange for (i)
         3,750,000  shares of the  Company's  Common  Stock (of which  1,000,000
         shares are being held  pursuant to an escrow  agreement for a period of
         18 months  following  the  closing  subject to certain  purchase  price
         adjustments  described below) and (ii) the assumption by the Company of
         certain  indebtedness  of TNC up to a  maximum  of  $4.6  million.  The
         purchased assets include telecommunications  switches 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 FCC section 214
         common  carrier  license gives the Company the authority to resell both
         international   switched  and  private  line   services  of  authorized
         carriers.  The final  purchase  price is subject to  adjustment  if (i)
         liabilities in excess of $4.6 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.

         During the period subsequent to the closing of the TNC Acquisition, the
         Company and TNC have held several  negotiations  regarding the specific
         liabilities  of TNC to be assumed by the Company.  As a result of those
         negotiations, certain current liabilities which were initially proposed
         by TNC to be  assumed by the  Company  were not  assumed.  Additionally
         certain other current  liabilities which were initially proposed by TNC
         not to be assumed by the Company were assumed. While these negotiations
         resulted in changes with respect to specific liabilities of TNC assumed
         by the Company, the aggregate liabilities of TNC assumed by the Company
         remained $4.6 million (see Note 3).

         WWC Acquisitions
         ----------------

         On July 3, 1997,  the  Company,  through  its  wholly-owned  subsidiary
         WorldPort  Acquisitions,  Inc.,  ("WAI") completed a merger of WWC into
         WAI pursuant to that certain  Agreement  and Plan of Merger dated April
         20,  1997  (the  "WWC  Acquisition").   WWC  was  a  telecommunications
         marketing  consulting  firm which  produced and  implemented  marketing
         strategies for clients  ranging from small companies to large corporate
         clients.  Mr. John Dalton, the Company's  President and Chief Executive
         Officer, was the sole shareholder of WWC.

         In connection with the WWC  Acquisition,  the Company  delivered to Mr.
         Dalton (i)  1,400,000  shares of the Company's  Common Stock,  of which
         200,000 shares are being held pursuant to an escrow  agreement  subject
         to certain  adjustments  to the  purchase  price  based on the  Company



                                       8
<PAGE>

         entering into business agreements that WWC had negotiated; (ii) $75,000
         cash,  of which  $37,500 was advanced to Mr. Dalton on June 6, 1997 and
         $15,000 was paid on October 10, 1997 with the  remaining  $22,500 being
         deferred by Mr. Dalton until December 31, 1997 ; and (iii) a Promissory
         Note (the "WWC Note") in the amount of $175,000 payable as follows: one
         payment of $50,000  payable on  October 1, 1997,  and two  payments  of
         $62,500  payable  on  February  1, 1998 and July 1, 1998.  The  $50,000
         payment  which  was due on  October  1, 1997 has been  deferred  by Mr.
         Dalton until December 31, 1997.

         The WWC  Acquisition  was  accounted  for using the purchase  method of
         accounting  and is subject to certain  purchase  price  adjustments  as
         discussed  above.  The  allocation  of  purchase  price  to the  assets
         acquired and liabilities  assumed in the transaction has been initially
         assigned and recorded based on preliminary  estimates of fair value and
         may be revised as additional  information  concerning  the valuation of
         such assets and liabilities becomes available.

         The fair value of assets acquired and liabilities assumed in connection
         with the WWC Acquisition is summarized as follows (in thousands):

            Current assets                                            $     6
            Property and equipment                                          3
            Goodwill and other intangible assets                        1,315
                                                                        -----

            Assets acquired, net of cash                                1,324

            Less:   WWC Note                                              175
                        Deferred cash payment                              37
                        Assumed liabilities and transaction costs          24
                        Common Stock issued                             1,050
                                                                        -----

            Cash paid                                                 $    38
                                                                      =======

         Set forth below are unaudited pro forma combined  results of operations
         of the  Company,  TNC and WWC for the nine months ended  September  30,
         1997 and the year ended December 31, 1996. The unaudited pro forma data
         is  presented  on the  basis  that  the  TNC  Acquisition  and  the WWC
         Acquisition  took place at the  beginning of  the fiscal  period  ended
         September 30, 1997 and the year ended  December 31, 1996 (in thousands,
         except per share amounts):
<TABLE>
<CAPTION>

                                                                September 30,    December 31,

                                                                    1997             1996
                                                                    -----            ----

<S>                                                               <C>             <C>      
            Revenues                                              $  5,273        $  12,548
                                                                  ========        =========

            Net loss from continuing operations                   $ (4,131)       $  (2,629)
                                                                  ========        =========

            Net loss per share from continuing operations         $  (0.26)       $   (0.35)
                                                                  ========        =========
</TABLE>

         Pro forma  adjustments  included in the amounts above primarily  relate
         to: (i) adjustment for pro forma goodwill  amortization expense using a
         10-year   estimated  life;  (ii)  adjustment  for  pro  forma  contract
         amortization   expense  using  a  5-year  life;  (iii)  adjustment  for
         non-recurring management fees payable to the General Partner of TNC and
         (iv) adjustment for  acquisition  costs incurred and expensed by TNC in
         connection with the TNC Acquisition.


                                       9
<PAGE>

         The summarized pro forma  information is based on estimates,  available
         information  and certain  assumptions  and may be revised as additional
         information becomes available. The pro forma financial information does
         not purport to represent what the Company's results of operations would
         have been if the TNC  Acquisition  and the WWC Acquisition had occurred
         on  the  dates  assumed  or to be  representative  of  the  results  of
         operations for any future period. Neither the expected benefits or cost
         reductions anticipated by the Company nor the future corporate overhead
         costs of the  Company  have  been  reflected  in the  above  pro  forma
         information.

(3)      DEBT AND CAPITAL LEASE OBLIGATIONS
         ----------------------------------

         Debt
         ----

         The  Company's  debt  at  September  30,  1997  consists  of a  secured
         promissory note payable to Value Partners,  Ltd.,  which was assumed in
         connection   with  the  TNC   Acquisition.   The  note  is  payable  in
         installments  of $100,000 per month plus accrued  interest at a rate of
         14% per annum  beginning  September 1, 1997. The note is secured by all
         of the  assets  acquired  by the  Company  in  connection  with the TNC
         Acquisition.  As of November 18, 1997, the Company has made none of the
         scheduled  payments on this note.  The note  provides  that an event of
         default  thereunder  occurs when the Company fails to pay the principal
         of or interest on the note as and when due, which failure continues for
         a period of twenty  days.  The note also  provides  that if an event of
         default exists,  then the note shall immediately become due and payable
         together with interest accrued thereon, without demand or notice.

         As  discussed  in  Note  2,  subsequent  to  the  closing  of  the  TNC
         Acquisition,   the   Company  and  TNC  have  negotiated  the  specific
         liabilities  of  TNC to be assumed by the  Company.  It was  originally
         contemplated   by  TNC  that  the  Company  would  assume  $300,000  of
         unsecured notes payable  to certain  individuals in connection with the
         TNC Acquisition.  As a result of the subsequent analysis by TNC and the
         Company, it was determined that these demand notes would not be assumed
         by the Company.  Rather, it was  determined that the Company assumed an
         additional  $300,000  of  trade  payables  in  connection  with the TNC
         Acquisition.

         Debt - Related Parties
         ----------------------

         The Company's debt - related  parties at September 30, 1997 consists of
         the following:

                    Bridge Notes                            $    225,000
                    WWC Note (See Note 2)                        175,000
                                                            ------------
                                                            $    400,000
                                                            ============

         In September 1997, the Company entered into an arrangement  with Maroon
         Bells Capital  Partners,  Inc.  ("MBCP") whereby MBCP would arrange for
         the Company to borrow from MBCP and certain other unaffiliated entities
         pursuant to certain  promissory notes (the "Bridge Notes").  The Bridge
         Notes bear  interest at 10% per annum,  mature on December 31, 1997 and
         are convertible into equity in the Company on terms to be negotiated in
         good faith.

(4)      COMMITMENTS AND CONTINGENCIES
         -----------------------------

         From time to time,  the  Company is  involved  in various  lawsuits  or
         claims  arising from the normal  course of business.  In the opinion of


                                       10
<PAGE>

         management,  none of these  lawsuits  or claims  will  have a  material
         adverse effect on the financial  statements or results of operations of
         the Company.

(5)      SERIES A PREFERRED STOCK OFFERING
         ---------------------------------

         On May 8, 1997, the Company initiated a Private  Placement  Offering of
         the Company's  Series A Preferred Stock for $3.00 per share pursuant to
         an Offering  Memorandum (the "Series A Preferred Stock  Offering").  On
         July 25, 1997, the offering price was reduced to $2.25 per share. As of
         September 30, 1997,  the Company had received  $368,750 in exchange for
         163,889 shares of the Company's  Series A Preferred  Stock. On November
         14, 1997, the Company closed the Series A Preferred Stock Offering. The
         Company has  received  total  proceeds of  $1,111,250  in exchange  for
         493,889 shares of the Company's Series A Preferred Stock.

(6)      RELATED PARTY TRANSACTIONS
         --------------------------

         Pursuant to an Advisory  Agreement  between MBCP and the Company  dated
         March 7,  1997,  MBCP  earns an M&A  Success  Fee,  as  defined  in the
         Advisory Agreement,  in connection with all acquisitions  identified by
         MBCP which are consummated by the Company. The fee includes a base plus
         an  additional  amount  based  on a  percentage  of  the  value  of the
         transaction. In connection with the TNC Acquisition, MBCP earned an M&A
         Success  Fee  of  approximately   $275,000.  In  consideration  of  the
         Company's  development  stage, MBCP reduced its M&A Success Fee related
         to the TNC Acquisition to $150,000 (see Note 7).

         The Company and MBCP have entered into an arrangement whereby MBCP will
         arrange  for  the  Company  to  borrow  from  MBCP  and  certain  other
         unaffiliated entities pursuant to certain Bridge Notes (see Notes 3 and
         7).

         MBCP  is a  shareholder  of the  Company  and  certain  members  of the
         Company's Board of Directors are principals or employees of MBCP.

         On July 3, 1997, the Company,  through its wholly-owned  subsidiary WAI
         completed a merger of WWC into WAI pursuant to that  certain  Agreement
         and Plan of Merger dated April 20, 1997. Mr. John Dalton, the Company's
         President and Chief Executive Officer,  was the sole shareholder of WWC
         (see Note 2).

(7)      SUBSEQUENT EVENTS
         -----------------

         Subsequent  to September 30, 1997,  the Company  borrowed an additional
         $660,000  pursuant to the Bridge  Notes.  On November  17,  1997,  MBCP
         converted the unpaid  balance of its M&A Success Fee related to the TNC
         Acquisition,  totaling $135,000, into a Bridge Note. As of November 18,
         1997, the Company has $1,020,000 in Bridge Notes outstanding.

         On October 31, 1997,  the Company  entered into a lease  agreement with
         Forsythe/McArthur  Associates,  Inc.,  (the "Lease")  through which the
         Company has placed an order for Cisco Systems  network  equipment to be
         installed in various cities in the United States and Europe.  The Lease
         calls for monthly payments in the amount of $121,701 for a period of 36
         months commencing on March 1, 1998.


                                       11
<PAGE>


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

The  following  discussion  should  be read in  conjunction  with the  Condensed
Consolidated  Financial  Statements  and Notes thereto  included under Item 1 of
this  Form  10-QSB.  In  addition,  reference  should  be made to the  Financial
Statements and Notes thereto and related Management's Discussion and Analysis of
Financial  Condition and Results of Operations  included in the Company's Annual
Report on Form 10-KSB/A for the year ended  December 31, 1996.  The  information
set forth in  Management's  Discussion  and Analysis of Financial  Condition and
Results  of  Operations  ("MD&A")  contains  "forward-looking  statements"  that
involve  risks and  uncertainties.  Many factors  could cause actual  results to
differ materially from those contained in the forward-looking  statements below.
See "Outlook".

General
-------

WorldPort is a  facilities-based  network provider of international and domestic
long distance services. The Company's strategy is to provide international voice
and data services to long distance carriers, corporations, businesses, marketers
and  distributors  of  long  distance   services,   and  to  other   alternative
telecommunications  services providers  primarily in the United States,  Western
Europe and Latin  America.  From its switching  center in Omaha,  Nebraska,  the
Company  provides  services such as  international  least cost  routing,  global
calling card and enhanced services and operator services. The Company's strategy
is to expand its business  through both internal  business  development  and the
strategic acquisition of telecommunication  services companies,  such as TNC and
WWC. See "Acquisitions" and "Outlook".

Outlook
-------

This  section,  and other  sections of the document,  contains  "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  profitability)  and (ii) the  Company's
strategy for expanding its business.

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 and its ability to raise
additional  capital ; (vii) the lack of a public market for the Company's Series
A Preferred  Stock;  (viii) the Company's lack of operating  history and current
operating  losses;  and (ix) 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.

The Company's strategy is to expand its telecommunications  facilities in Europe
and Latin  America in order to pursue  market  opportunities  made  possible  by
deregulation  and  privatization.  As  part  of  this  strategy,  WorldPort  has
commenced the deployment of a European  gateway  through which the Company seeks
to  provide   international   carriers  and  other  high-volume  customers  with
alternative  routes for  cost-effective,  high quality voice,  data and Internet
services  within  Europe and  between  Europe and the  Americas.  The  Company's
European  gateway  deployment is designed to provide it with the  infrastructure
needed to compete effectively in the rapidly deregulating European marketplace.


                                       12
<PAGE>

The Company  also  continues  to develop  new  business  opportunities  in Latin
America. To date, the Company has developed new carrier relationships to provide
international long distance services between the United States, Mexico  and  the
Caribbean.

On  September  4,  1997 the  Company  entered  into an  international  strategic
agreement (the  "Agreement")  with EQUANT Network  Services,  Inc.,  ("EQUANT"),
which  operates  one of the world's  largest  telecommunications  networks  (the
"Network"). Under the terms of the Agreement, EQUANT will provide WorldPort with
access to the Network which  includes  state-of-the-art  switches  strategically
positioned  around the world.  WorldPort  will utilize the Network to expand its
international  long  distance  services to new  markets and to more  effectively
serve its existing  customers.  The Agreement  will enable  WorldPort to connect
overseas  customers to its Omaha,  Nebraska switching center and to other future
WorldPort  switching centers in the U.S., Europe and Latin America.  The Company
intends to coordinate the  installation  and location of certain of its switches
and other  telecommunications  equipment with EQUANT,  including  co-location of
WorldPort equipment at EQUANT facilities in certain markets.

The Network  covers over 225  countries and  territories,  has more than 120,000
user connections world-wide and offers a broad range of voice and data solutions
to  multinational  corporations  in a variety of industries,  with local support
available  from over 150 help  desks  around  the  world.  As a single  network,
services  are  fully-managed  end-to-end.  These  services  are  offered  on  an
international  scale and include X.25 and Frame Relay,  messaging,  Global Voice
Services,  Business Intranet and Internet  Solutions and high performance remote
access services.

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

Prior to its  acquisition  of the assets and  on-going  operations  of TNC,  the
Company was a development  stage company that had not generated  revenues  other
than  interest  income since  inception.  During the three and nine months ended
September  30,  1997,  the  Company   incurred   losses  of   $(1,242,164)   and
$(1,879,684),  respectively, compared to $(8,886) and $(129,056) during the same
periods  in 1996.  Included  in the  losses  incurred  during the three and nine
months  ended  September  30,  1997  are the  operating  results  of TNC and WWC
subsequent to the closing of the TNC Acquisition and the WWC Acquisition.  Prior
to the TNC  Acquisition,  TNC had experienced a history of operating  losses and
cash flow deficiencies. To address and remedy these historical operating losses,
the Company has instituted new financial  controls,  modified  existing products
and added new  products in a strategy to enhance  the  profitability  of the TNC
operations.  In addition, the Company is now utilizing the TNC operations as the
network platform from which to launch new revenue generating  agreements that it
has under development with  international  carriers and distributors.  While the
Company  believes  these  measures  will have a  positive  impact on its  future
results of operations,  the Company  anticipates  that it will continue to incur
operating  losses and cash flow  deficiencies  for the foreseeable  future.  See
"Liquidity and Capital Resources" and "Outlook".

Revenues
--------

Revenues for the three and nine months ended September 30, 1997, were $1,506,238
and $1,694,787,  respectively  compared to $0 for the three and nine month ended
September 30, 1996.  The increase in revenues was due solely to the inclusion of
the operating results of TNC subsequent to the closing of the TNC Acquisition on
June 20, 1997.

Gross Margin
------------

Gross  margin  for the three and nine  months  ended  September  30,  1997,  was
$159,373 and $153,510, respectively compared to $0 for the three and nine months


                                       13
<PAGE>

ended  September  30,  1996.  The increase in gross margin was due solely to the
inclusion of the operating  results of TNC  subsequent to the closing of the TNC
Acquisition on June 20, 1997.



Selling, General and Administrative Expenses
--------------------------------------------

Selling,  general and  administrative  expenses  increased  to  $1,062,150  from
$21,525 and to  $1,714,798  from  $141,821  for the three and nine months  ended
September 30, 1997 and 1996, respectively. The increase was due to (i) increased
business  development  and  acquisition  activity,  (ii) the  establishment  and
staffing  of the  Company's  corporate  offices and (iii) the  inclusion  of the
selling, general and administrative expenses of TNC subsequent to the closing of
the TNC Acquisition on June 20, 1997.

Interest Income (Expense)
-------------------------

Interest  income  decreased to $5,833 from $12,639 and increased to $65,619 from
$12,765  for the  three  and nine  months  ended  September  30,  1997 and 1996,
respectively.  The increase was due to the interest  from (i) a note  receivable
from Global Star International,  Inc. (the "GSI Note") which was paid in full on
March 6, 1997, (ii) a note receivable  from Com Tech  International  Corporation
("Com  Tech")  and (iii)  the note  receivable  from TNC prior to the  Company's
acquisition of TNC.

Interest  expense for the three and nine  months  ended  September  30, 1997 was
$62,187 and $71,212,  respectively  compared to $0 for the three and nine months
ended  September 30, 1996.  The increase in interest  expense is due to the debt
assumed by the Company in connection  with the TNC Acquisition on June 20, 1997.
See "Liquidity and Capital Resources".

Pro  Forma  Results  (See  Note  2  to  the  Condensed   Consolidated  Financial
Statements)
--------------------------------------------------------------------------------

Pro  forma  revenues  for  the  nine  months  ended   September  30,  1997  were
approximately  $5,273,000  compared to  approximately  $12,548,000  for the year
ended  December  31, 1996.  The  decrease in revenues  was due  primarily to the
restructuring of a contract,  effective  January 1, 1997, with a distributor who
is a  significant  customer of TNC.  Prior to January 1, 1997,  the contract was
structured as a retail  contract  whereby TNC billed the distributor on a retail
basis and paid a commission  to the  distributor  based on the retail  billings.
Effective  January 1, 1997,  the  contract  was changed to a wholesale  contract
whereby TNC bills the  distributor on a wholesale  basis and pays no commissions
to the distributor.

Through  its  re-negotiation  of the  distribution  agreement,  the  Company has
terminated  the exclusive  distribution  provisions  of the prior  agreement and
gained the ability to directly market its calling cards and pre-paid phone cards
in the  market  served  by the  distributor.  This  contract  re-negotiation  is
consistent with the Company's  strategy to develop new  distribution  agreements
consistent  with new  carrier  relationships  under  development  by the Company
worldwide. See "Outlook".

Pro forma loss from  continuing  operations for the nine months ended  September
30, 1997 was approximately  $(4,131,000) compared to approximately  $(2,629,000)
for the year ended  December  31,  1996.  The  increase in loss from  continuing
operations  was due primarily to (i) increased  network  costs  associated  with
changes in TNC's vendor  contracts;  (ii) the  write-off of a receivable  from a
significant  customer and (iii) increased  selling,  general and  administrative
costs  associated  with the closing of the TNC  Acquisition  and the  subsequent
implementation of new operating and  administrative  procedures,  as well as the
Company's  increased  business  development  and  acquisition  activity  and the
establishment and staffing of the Company's  corporate offices.  These increases
were  partially  offset by decreased  commission  expenses  associated  with the
restructuring of the contract discussed above.

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

                                       14
<PAGE>


The Company  currently has a working  capital deficit and has operated at a loss
since its inception.  Funding of the working capital deficit, current and future
operating  losses  and  expansion  of  the  Company  will  require   substantial
continuing  capital  investment.  The  Company's  strategy is to fund these cash
requirements  through debt facilities or additional equity  financing.  Although
the Company has been able to arrange  debt  facilities  or equity  financing  to
date,  there can be no assurance that sufficient  debt or equity  financing 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 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. See "Series A Preferred Stock  Offering",  "Bridge Notes" and
"Subsequent Events".

As of  September  30,  1997,  the  Company  has a  working  capital  deficit  of
$2,666,412  compared to a working  capital surplus of $2,259,416 at December 31,
1996. The working capital deficit is due to (i) the assumption of liabilities in
conjunction with the TNC Acquisition,  the majority of which were trade payables
and  short-term  debt  obligations,  (ii) the  issuance  of the note  payable in
connection  with the WWC  Acquisition  and  (iii)  the  operating  losses of the
Company.  Trade receivables increased to $627,700 at September 30, 1997, from $0
at December 31, 1996 due to the TNC Acquisition.

Operations  used  $1,689,507  during the nine months ended  September  30, 1997,
compared to $128,296 for the nine months  ended  September  30, 1996.  Investing
activities  used  $124,375  during the nine months  ended  September  30,  1997,
compared  to $0  for  the  nine  months  ended  September  30,  1996.  Investing
activities  consisted  primarily of  collection of the GSI Note and a portion of
the Com Tech Note offset by cash  advances to TNC to fund working  capital prior
to the closing of the TNC  Acquisition  and cash paid to WWC in connection  with
the closing of the WWC  Acquisition.  Financing  activities  generated  $309,403
during the nine months  ended  September  30, 1997  compared to $114,400 for the
nine months ended September 30, 1996.  Financing  activities for the nine months
ended  September  30, 1997,  consisted of (i)  payments on  short-term  debt and
capital lease  obligations  assumed in connection  with the TNC  Acquisition and
(ii)  proceeds  from the issuance of notes  payable and (iii)  proceeds from the
issuance of notes payable to related parties and (iv) proceeds from the issuance
of  163,889  shares  of  the  Company's  Series  A  Preferred  Stock.  Financing
activities  for the nine months ended  September 30, 1996  consisted of proceeds
from the  issuance of Common  Stock.  See "Series A Preferred  Stock  Offering",
"Bridge Notes" and "Subsequent Events".

In addition to trade payables and vendor obligations  assumed in connection with
the TNC  Acquisition,  the Company assumed a secured  promissory note payable to
Value Partners, Ltd. which is payable in installments of $100,000 per month plus
accrued  interest at a rate of 14% per annum  beginning  September 1, 1997.  The
note is secured by all of the assets  acquired by the Company in connection with
the TNC  Acquisition.  As of November 18, 1997, the Company has made none of the
scheduled  payments  on this note.  The note  provides  that an event of default
thereunder  occurs when the Company fails to pay the principal of or interest on
the note as and when due,  which failure  continues for a period of twenty days.
The note also provides that if an event of default  exists,  then the note shall
immediately  become due and payable  together  with  interest  accrued  thereon,
without  demand or notice.  The Company  plans to attempt to  restructure  these
obligations or to refinance these obligations through additional debt facilities
on more favorable terms to the Company or through  additional  equity financing;
however,  no assurance can be given that the Company will be able to restructure
these obligations or to obtain additional financing.

Effective  April 14, 1997, the Company and 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


                                       15
<PAGE>

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").  Com Tech agreed to pay $150,000  plus accrued  interest on May 1,
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
payment  consists 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.  As of November 18,  1997,  Com Tech has paid the Company all amounts due
under the Settlement Agreement.

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 (the
"Series A Preferred Stock  Offering").  Holders of Series A Preferred Stock will
be entitled to receive annual cumulative  dividends of 8%, payable in cash or in
shares of Common Stock of the Company, at the Company'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 and none is  expected  to
develop as a result of the Series A Preferred Stock Offering. 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  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. On July 25, 1997, the offering price was
reduced to $2.25 per share.  On November 14, 1997, the Company closed the Series
A  Preferred  Stock  Offering.  The  Company  has  received  total  proceeds  of
$1,111,250 in exchange for 493,889  shares of the  Company's  Series A Preferred
Stock.

In connection with the WWC Acquisition, the Company was obligated to pay $75,000
cash at closing to Mr. John Dalton.  As of November  18, 1997,  $52,500 has been
paid to Mr. Dalton with the remaining $22,500 having been deferred by Mr. Dalton
until  December 31, 1997.  In addition to the cash paid at closing,  the Company
issued to Mr. Dalton, the WWC Note in the amount of $175,000 payable as follows:
one payment of $50,000  payable on October 1, 1997,  and two payments of $62,500
payable on February 1, 1998 and July 1, 1998. The $50,000  payment which was due
on October 1, 1997 has been deferred by Mr. Dalton until  December 31, 1997. See
"WWC Acquisition".

In September  1997, the Company  entered into an  arrangement  with MBCP whereby
MBCP  would  arrange  for the  Company  to borrow  from MBCP and  certain  other
unaffiliated entities pursuant to certain promissory notes (the "Bridge Notes").
The Bridge Notes bear interest at 10% per annum, mature on December 31, 1997 and
are  convertible  into equity in the Company on terms to be  negotiated  in good
faith.  As of November  18,  1997,  the Company has  $1,020,000  in Bridge Notes
outstanding. See "Related Party Transactions".

TNC Acquisition
---------------

On June 20, 1997, the Company  completed the acquisition of substantially all of
the  telecommunications  assets  and  operations  of TNC  in  exchange  for  (i)
3,750,000  shares of the Company's  Common Stock (of which 1,000,000  shares are
being held pursuant to an escrow  agreement for a period of 18 months  following
the closing subject to certain purchase price  adjustments  described below) and
(ii) the  assumption  by the  Company  of  certain  indebtedness  of TNC up to a
maximum  of  $4.6  million.  The  purchased  assets  include  telecommunications
switches 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 FCC section 214 common
carrier  license  gives the Company the  authority to resell both  international
switched and private line services of authorized  carriers.  The final  purchase
price is subject to adjustment if (i)  liabilities in excess of $4.6 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


                                       16
<PAGE>

contracts. In addition,  certain creditors of TNC have the option to convert all
or a portion of their debt into shares of the Company's  Common Stock.  Prior to
closing the TNC Acquisition, the Company loaned $1,178,000 to TNC to provide TNC
with working capital.  This amount was assumed by the Company in connection with
the acquisition. See "Liquidity and Capital Resources".

The Company utilizes the acquired switching equipment and international operator
services platform in Omaha,  Nebraska to provide calling card and other enhanced
telecommunications   services  to  marketers  of  telecommunications   services,
corporate  customers  and  businesses  primarily in the United  States,  Western
Europe and Latin America.  Through the acquired  operator  services center,  the
Company provides  multilingual customer support. The U.S. switching and operator
services  center  enables  customers in foreign  countries to take  advantage of
lower cost routing and higher transmission  quality for international calls. The
Company's services are currently marketed through various distribution  channels
in the United States, Western Europe and Latin America.

WWC Acquisition
---------------

On July 3, 1997, the Company, through its wholly-owned subsidiary WAI, completed
a merger of WWC into WAI. WWC was a telecommunications marketing consulting firm
which produced and  implemented  marketing  strategies for clients  ranging from
small  companies to large  corporate  clients.  Mr. John Dalton,  the  Company's
President and Chief Executive Officer, was the sole shareholder of WWC.

In connection with the WWC Acquisition,  the Company delivered to Mr. Dalton (i)
1,400,000  shares of the  Company's  Common Stock,  of which 200,000  shares are
being held pursuant to an escrow agreement subject to certain adjustments to the
purchase price based on the Company  entering into business  agreements that WWC
had negotiated;  (ii) $75,000 cash, of which $52,500 has been paid to Mr. Dalton
as of November 18, 1997;  and (iii) the WWC Note in the amount of $175,000.  See
"Liquidity and Capital Resources".

Related Party Transactions
--------------------------

Pursuant to an Advisory  Agreement  between MBCP and the Company  dated March 7,
1997,  MBCP  earns  an M&A  Success  Fee in  connection  with  all  acquisitions
identified by MBCP which are consummated by the Company. The fee includes a base
plus an additional amount based on a percentage of the value of the transaction.
In  connection  with the TNC  Acquisition,  MBCP  earned an M&A  Success  Fee of
approximately  $275,000.  In consideration of the Company's  development  stage,
MBCP reduced its M&A Success Fee related to the TNC Acquisition to $150,000.

The Company and MBCP have entered into an arrangement  whereby MBCP will arrange
for the  Company to borrow  from MBCP and certain  other  unaffiliated  entities
pursuant to certain  Bridge  Notes.  As of November  18,  1997,  the Company has
$1,020,000 in Bridge Notes outstanding.

MBCP is a shareholder of the Company and certain  members of the Company's Board
of Directors are principals or employees of MBCP.

On July 3, 1997, the Company,  through its wholly-owned subsidiary WAI completed
a merger of WWC into WAI pursuant to that certain  Agreement  and Plan of Merger
dated April 20,  1997.  Mr.  John  Dalton,  the  Company's  President  and Chief
Executive Officer, was the sole shareholder of WWC. See "WWC Acquisition".

Subsequent Events
-----------------


                                       17
<PAGE>

Subsequent to September 30, 1997,  the Company  borrowed an additional  $660,000
pursuant to the Bridge Notes.  On November 17, 1997,  MBCP  converted the unpaid
balance  of its  M&A  Success  Fee  related  to the  TNC  Acquisition,  totaling
$135,000, into a Bridge Note.

On  October  31,  1997,  the  Company   entered  into  a  lease  agreement  with
Forsythe/McArthur  Associates, Inc., (the "Lease") through which the Company has
placed an order for Cisco Systems  network  equipment to be installed in various
cities in the United States and Europe.  The Lease calls for monthly payments in
the amount of $121,701 for a period of 36 months commencing on March 1, 1998.


























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<PAGE>



                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

From time to time, the Company is involved in various lawsuits or claims arising
from the normal course of business. In the opinion of management,  none of these
lawsuits  or  claims  will  have a  material  adverse  effect  on the  financial
statements or results of operations of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
                      Exhibit No.                                   Description

                          2.1            Asset Purchase Agreement by and between
                                         the    Company     and     Telenational
                                         Communications    Limited   Partnership
                                         dated April 23, 1997,  previously filed
                                         with Form 10-QSB for the fiscal quarter
                                         ended March 31, 1997, and  incorporated
                                         herein by reference.

                          2.2            Amendment  No. 1 to the Asset  Purchase
                                         Agreement  by and  between  the Company
                                         and Telenational Communications Limited
                                         Partnership,   dated  June  20,   1997,
                                         previously  filed  with  Form 8-K dated
                                         July 7, 1997, and  incorporated  herein
                                         by reference.

                          2.3            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,  previously filed with
                                         Form   8-K   dated  July  7,  1997, and
                                         incorporated herein by reference.

                          3.1            Certificate  of  Incorporation  for the
                                         Company  previously  filed  with   Form
                                         10-QSB  for  the  fiscal  quarter ended
                                         September 30,  1996,  and  incorporated
                                         herein by reference.

                          3.2            Bylaws of the Company previously  filed
                                         with Form 10-QSB for the fiscal quarter
                                         ended     September   30,   1996,   and
                                         incorporated  herein by reference.

                         10.1            Promissory  Note  by  and  between  the
                                         Company  and  Cablex Electronique, Ltd.
                                         dated September 11, 1997.

                         10.2            Promissory  Note  by  and  between  the
                                         Company  and  Le  Chevlier  Noir,  Ltd.
                                         dated September 11, 1997.

                         10.3            Promissory  Note  by  and  between  the
                                         Company   and   Woodlands,  Ltd.  dated
                                         October 1, 1997.


                         10.4            Promissory  Note  by  and  between  the
                                         Company  and   Maroon   Bells   Capital
                                         Partners, Inc. dated October 9, 1997.

                         10.5            Agreement   for    the   Provision   of
                                         Corporate  Voice Communication Services
                                         between  EQUANT Network  Services, Inc.
                                         and  the  Company  dated  September  4,
                                         1997.


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<PAGE>


                         10.6            Master  Equipment  Lease  Agreement  by
                                         and    between    the    Company    and
                                         Forsythe/McArthur    Associates,   Inc.
                                         dated October 31, 1997.

                         10.7            Lease  Schedule  A  by  and between the
                                         Company       and     Forsythe/McArthur
                                         Associates,  Inc.   dated  October  30,
                                         1997.

                         10.8            Lease by and  between  the  Company and
                                         Mission Life Insurance  Company,  dated
                                         April 15, 1997,  previously  filed with
                                         Form  10-QSB  for  the  fiscal  quarter
                                         ended March 31,  1997 and  incorporated
                                         herein by reference.

                         10.9            Settlement Agreement by and between Com
                                         Tech International  Corporation and the
                                         Company    dated   April   14,    1997,
                                         previously  filed with Form  10-QSB for
                                         the fiscal quarter ended March 31, 1997
                                         and incorporated herein by reference.

                         10.10           Management  Services  Agreement  by and
                                         between the  Company  and  Telenational
                                         Communications   Limited   Partnership,
                                         dated April 29, 1997,  previously filed
                                         with Form 10-QSB for the fiscal quarter
                                         ended March 31,  1997 and  incorporated
                                         herein by reference.

                         10.11           Employment  Agreement by and between W.
                                         Dean Spies and  the  Company  effective
                                         April 7, 1997,  previously  filed  with
                                         Form  10-QSB  for  the  fiscal  quarter
                                         ended  March 31, 1997 and  incorporated
                                         herein by reference.

                         10.12           First    Amended   Loan    Modification
                                         Agreement  by and between the  Company,
                                         Telenational   Communications,    Inc.,
                                         Telenational   Communications   Limited
                                         Partnership  and Value  Partners,  Ltd.
                                         dated June 20, 1997,  previously  filed
                                         with Form 10-QSB for the fiscal quarter
                                         ended  June 30,  1997 and  incorporated
                                         herein by reference.

                         10.13           Second  Amended  and  Restated   Senior
                                         Secured  Promissory Note by and between
                                         the        Company,        Telenational
                                         Communications,    Inc.    and    Value
                                         Partners,  Ltd.  Dated  June 20,  1997,
                                         previously  filed with Form  10-QSB for
                                         the fiscal  quarter ended June 30, 1997
                                         and incorporated herein by reference.

                         10.14           First  Amended   Pledge   and  Security
                                         Agreement  by and  between Telenational
                                         Communications,     Inc.    and   Value
                                         Partners,  Ltd.  dated  June 20,  1997,
                                         previously  filed with  Form 10-QSB for
                                         the fiscal quarter ended June 30,  1997
                                         and incorporated herein by reference.

                         10.15           Notice  and  Certification  of No  Oral
                                         Agreements  by and between the Company,
                                         Telenational   Communications,    Inc.,
                                         Telenational   Communications   Limited
                                         Partnership  and Value  Partners,  Ltd.
                                         dated June 20, 1997,  previously  filed
                                         with Form 10-QSB for the fiscal quarter
                                         ended  June 30,  1997 and  incorporated
                                         herein by reference.


                                       20
<PAGE>

                         10.16           Consulting  Agreement  by  and  between
                                         Edmund  Blankenau and the Company dated
                                         June 20,  1997,  previously  filed with
                                         Form  10-QSB  for  the  fiscal  quarter
                                         ended  June 30,  1997 and  incorporated
                                         herein by reference.

                         10.17           Employment  Agreement  by  and  between
                                         Bruce Burton and the Company dated June
                                         20,  1997,  previously  filed with Form
                                         10-QSB  for the  fiscal  quarter  ended
                                         June 30, 1997 and  incorporated  herein
                                         by reference.

                         10.18           Lease  by  and   between   Telenational
                                         Communications, Inc. and 7300 Woolworth
                                         Partnership   dated   July   1,   1997,
                                         previously  filed with Form  10-QSB for
                                         the fiscal  quarter ended June 30, 1997
                                         and incorporated herein by reference.

                         27.1            Financial Data Schedule

Reports on Form 8-K
-------------------

Form 8-K filed with the Securities and Exchange Commission on July 7, 1997.

Form 8-K/A filed with the  Securities  and Exchange  Commission  on September 5,
1997.
























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<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:  November 19, 1997               By: /s/ W. Dean Spies
                                           -------------------------------------
                                           W. Dean Spies
                                           Chief Financial Officer and Treasurer






















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