UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington. D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the three months ended December 31, 1998

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from______to_______

                         Commission file number 1-12835


                               WORLD CALLNET, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                               75-2468002
         (State or other jurisdiction of              (I.R.S. Employer
         incorporation or organization)               Identification No.)

           Brecon House, Meridian Gate, 207 Marsh Wall, London E14 9YT
               (Address of principal executive offices) (Zip Code)


       (Registrants' telephone number, including area code) 0171 335 8300


      Securities registered under Section 12 (b) of the Exchange Act: None


         Securities registered under Section 12 (g) of the Exchange Act:

                          Common Stock, Par Value $.001
      --------------------------------------------------------------------
                                (Title of Class)


         Check whether the registrant (1) filed all reports required to be filed
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 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. Yes X No 

         As of January  31,  1999 there were  7,933,833  shares of  registrant's
common stock outstanding.

         Transitional Small Business Disclosure Format (Check One):  Yes  No X 


<PAGE>


REGISTRANT'S  DISCLAIMER STATEMENT RE: PRIVATE SECURITIES  LITIGATION REFORM ACT
AND OTHER MATTERS

         The statements in this Report on Form 10-QSB,  in the Company's  Report
on Form 10-KSB,  or press  releases  issued by the Company that are not based on
historical  information  are considered  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the  Securities  Exchange Act of 1934, as amended,  including  statements
regarding the Company's projections, hopes, expectations, intentions, beliefs or
strategies  regarding  the  future.   Forward-looking  statements  include,  but
expectations are not limited to, plans in Description of Business  regarding (i)
its plans to market products in Europe,  North America,  South America and Asia,
(ii) its belief that offering free  Internet  access will capture  customers for
CallNet  PLC,  (iii) its  statement  that other  companies  engaged in  Internet
related businesses may be acquired, (iv) its expectation that the acquisition of
the remaining 85% of CallNet Plc can be acquired by the end of fiscal year 1999,
(v) its belief that the majority of its future revenues will be derived from its
ownership of CallNet PLC,  which earns a share of telephone  toll  revenues from
companies that provide  telephone  service to their  customers,  (vi) its belief
that CallNet Plc will meet the quarterly telephone toll minute targets set forth
in its agreement  with Cable & Wireless  Communications,  Plc ("Cable & Wireless
Communications") and (vii) its belief that its products and services will appeal
to  the  many  segments  of  the  Internet  market;   and  (vii)  statements  in
Management's  Discussion  and  Analysis or Plan of Operation  regarding  (a) the
projection  that its working  capital will be adequate  until mid 1999,  (b) the
projection  that  additional  capital  from bridge  notes  and/or sale of equity
securities will be necessary,  (c) the expectation that product  development and
manufacturing costs will be borne by joint venture partners, (d) the estimate of
research/development  and plant expenditures for the next twelve months, (e) the
expectation  that telephone toll revenues  derived from ownership of CallNet PLC
will be the primary  source of internal  liquidity  and product  sales will be a
secondary source of internal liquidity, and (f) the belief that Year 2000 issues
will not have a material impact on the Company.

         It is possible that the  Company's  projections,  hopes,  expectations,
intentions, beliefs, plans or strategies regarding the future and hopes outlined
above may not be achieved due to factors and circumstances  discussed  elsewhere
in this Form 10-QSB. See Part 1, Item 2,  "Management's  Discussion and Analysis
or Plan of Operation."

         World CallNet, Inc. is not affiliated with, sponsored by or endorsed by
any of the  following  companies  who have similar  trade names,  trademarks  or
service marks: Worldcall  Communications  International,  Inc.; Computer Calling
Technologies,   Inc.;  AT&T  Corp.;  Worldnet   Communications,   Inc.;  Luckman
Interactive,   Inc.;   Allnet   Communications   Services,   Inc.;   West  Coast
Telecommunications, Inc.; and Worldnet Communications, Inc.






                                       2

<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

         Financial  information required by Item 301(b) of Regulation S-B can be
found on the page following Item 2 below.  The financial  information  should be
read in conjunction  with the financial  statements for the year ended September
30, 1998  included in the  Company's  Annual  Report on Form  10-KSB.  Operating
results  for the  three  months  ended  December  31,  1998 are not  necessarily
indicative  of the  results  that may be  expected  for the  entire  year  ended
September 30, 1999.

Item 2. Management's Discussion and Analysis or Plan of Operation.

LIQUIDITY AND CAPITAL RESOURCES

         During  1998,  the  Company  sold all of its  interests  in oil and gas
royalty  properties for cash and, after repayment of debt and accounts  payable,
became a publicly  traded  shell.  In October  1998,  the Company  completed the
acquisition  of  World  Wide   Communication   (Holdings)  Ltd.  ("WWCH")  in  a
transaction  accounted for as a reverse  acquisition.  As a result,  the Company
became the successor to the business and financial operations of WWCH, including
its fiscal  yearend of September 30. WWCH was  incorporated  in January 1998 and
during the period from incorporation through December 31, 1998 had been involved
primarily in capital formation  activities,  refinement of its business strategy
and development of  relationship  with industry  partners.  In January 1999, the
Company changed its name to World CallNet, Inc.

         The Company's  principal  external source of capital for developing its
products  and  services  has been the  placement  of bridge  notes  payable.  In
November and  December  1998,  the Company  completed  the private  placement of
$1,150,000  in bridge  notes that are due on December  1, 1999 or earlier  under
certain  circumstances,  including  the  raising  of  $3.5  million  or  more of
additional capital.  Additional placements of bridge notes or the sale of equity
securities  to fund  operating  expenses  will be necessary  until the Company's
revenues from operations provide sufficient cash flow.

         The Company's plan of operation for the next twelve months includes the
ongoing  operation of its Internet  service and the  continued  development  and
marketing of its Internet products such as Mail TV and its proprietary keyboard.
The Company will require  substantial  capital to implement  its business  plan,
which is discussed further in Note 2 to the Financial Statements. It is expected
that most of the costs of product  development and manufacturing  these products
will  be  borne  by  joint  venture  partners  such  as  Zilog,  OEM  television
manufacturers   and  other  third  parties  seeking  to  acquire  new  microchip
technology developed by the Company.

         With working capital on hand, the Company  estimates it can satisfy its
obligations and cash  requirements  until mid 1999. To meet debt obligations due
during the  balance of fiscal 1999 and 2000 and to meet other  obligations,  the
Company will have to raise additional capital in the next twelve months.


                                       3

<PAGE>


         The Company has estimated that research and  development  costs will be
approximately  $250,000  during the next twelve months.  Expenditures  for plant
and/or  significant  capital equipment are estimated at $750,000 during the next
twelve months.

         If deemed appropriate by the Board of Directors, the Company will issue
shares of its capital stock to acquire assets, customers and other entities that
appear to be viable business opportunities.

         The Company expects that its primary source of internal  liquidity will
be revenues  from  telephone  toll charges  earned under the terms of agreements
that  CallNet  Plc,  an   affiliated   entity,   has  with  Cable  and  Wireless
Communications  ("CWC"). The agreement with CWC entitles CallNet Plc, a provider
of Internet  access,  to receive 35% of the telephone  toll revenues CWC charges
its customers for calls to CallNet Plc.

         The agreement with CWC provides that this revenue  sharing  arrangement
is based on CallNet Plc meeting  quarterly  targets  commencing  with the period
beginning March 1, 1999. The initial quarterly target is 10 million minutes with
the quarterly  targets for the next three-month  period increasing to 30 million
minutes.  If a quarterly target is not met, Callnet Plc will be required to make
certain  repayments to CWC based on the difference  between the  target  minutes
and the  actual  minutes.  The  repayment  requirement  ranges  from 10%  of the
quarterly  payment made to CallNet Plc for achieving 90% and above of the target
revenues to 10% of the quarterly  payment made to CallNet Plc for achieving less
than 50% of the target revenues.

         The fundamental  business  strategy is to direct telephone usage to the
CallNet  Plc  telecommunications   network  from  new  Internet  customers.  The
Company's products are designed to facilitate new Internet access. Sale of these
products is expected to be a secondary  source of revenues for the Company.  The
Company owns fifteen percent (15%) of the capital stock of CallNet Plc and plans
to acquire the  remaining  eighty-five  percent  (85%) of the  capital  stock of
CallNet Plc.

         The Year 2000  presents  concerns for business and consumer  computing.
Aside from the well-known  problems with the use of certain 2-digit date formats
as the year  changes  from 1999 to 2000,  the Year  2000 is a special  case leap
year,  and dates such as 9/9/99 were used by certain  organizations  for special
functions.  This could  result in system  failures  or  miscalculations  causing
disruption  of  operations,  including  among others,  a temporary  inability to
process  transactions,  send  invoices  or engage  in  similar  normal  business
activities.  The  problem  exists  for many  kinds  of  software  and  hardware,
including mainframes, mini-computers, PC's and embedded systems.

         The Company is  continuing to test its products and classify its tested
products into the following  categories of compliance:  "compliant,"  "compliant
with  minor  issues,"  and "not  compliant."  All of the  Company's  significant
products  tested are either  "compliant"  or "compliant  with minor  issues," as
defined.  The Company has purchased all of its  information  systems  during the
later part of 1998 with a full awareness of Year 2000 issues.  While the Company
received no written assurance from such vendors that such systems were year 2000
compliant,  computer system hardware and software were carefully reviewed by the
Company-employed  computer  technicians  and  software  engineers  before  being
purchased and placed in service.


                                       4

<PAGE>

         Software  developed  by the Company for Internet  access  relies on the
systems  employed by CallNet Plc, an affiliated  entity that  provides  Internet
service to the Company on an exclusive  basis.  CallNet Plc was  incorporated in
1998 and  under the  direction  and  supervision  of the  Company's  information
systems  technicians  has  followed  the  same  procedures  and  timetables  for
purchasing and placing its information systems in service.

         The  Company  believes  that  purchasing  information  technology  from
vendors such as Intel and Microsoft  basically  eliminates  remediation costs on
systems not fully Year 2000 compliant.  World CallNet's policy is to make future
and current versions of its core products Year 2000 "compliant."

         The Year 2000  issue  also  affects  the  Company's  internal  systems,
including  information  technology  (IT) and non-IT  systems.  World  CallNet is
assessing  the  readiness  of its systems for  handling  the Year 2000,  and has
started the remediation and certification  process.  Contingency plans are being
developed in parallel with the testing and remediation efforts.

         As noted above,  World  CallNet has  addressed the Year 2000 issue with
its  largest  suppliers  of  services,   CallNet  Plc,  and  is  evaluating  its
third-party  distribution  and  supply  chain to  understand  their  ability  to
continue providing services and products throughout the change to the year 2000.
World CallNet is monitoring key vendors,  product  manufacturers,  distributors,
and direct  resellers to avoid any business  interruptions in the year 2000. For
critical third parties with known issues,  contingency  plans will be developed.
The Company is also  reviewing its facilities  and  infrastructure.  Remediation
efforts are under way and certain  contingency  plans are in  development.  In a
worst case scenario,  these unknown third party  variables could have a material
and adverse effect on the Company's ability to conduct its business.

         The Company believes that the Internet as a whole is subject to overall
systems  failure  arising from Year 2000 matters due to the open and interactive
nature of the  Internet.  The Internet is a loose and open network that may have
many non-compliant participants who could corrupt the entire system. The Company
believes that this risk does not apply to the Company to any greater extent that
any other Internet Company.

         While Year 2000  issues  present a  potential  risk to World  CallNet's
internal systems,  distribution and supply chain, and facilities, the Company is
minimizing  risk  with a  worldwide  effort.  World  CallNet  is  performing  an
extensive  assessment and is in the process of testing and  remediating  mission
critical  components.  The  current  plan  is to  have  the  majority  of  these
components  resolved by June 1999,  with the  remaining  components  resolved by
September 1999.  Management currently believes that all critical systems will be
ready by the Year 2000. The level of expenditures for information systems,  both
historically  and budgeted for the next year,  are basically  unaffected by Year
2000 issues.  Therefore,  the Company believes that the cost to address the Year
2000 issues is not material. The impact of the Year 2000 on future World CallNet
revenue is difficult  to discern but is a risk to be  considered  in  evaluating
future growth of the Company.


                                       5


<PAGE>

RESULTS OF OPERATIONS

         The results of operations for purposes of this discussion  include only
the financial results of WWCH, the surviving business operation in a transaction
that was treated as a reverse  acquisition.  The Company's financial  statements
report only the business  operations and assets of WWCH.  Financial  information
and related discussions contained in reports previously filed by the Company are
not comparable with the disclosures included herein.

         Revenues of  approximately  $35,000 for the three months ended December
31, 1998 were derived from license fees related to the Company's MailTV software
chip.

         For the three  months  ended  December  31, 1998 the  Company  incurred
salaries and other  administrative  expenses  related to capital  formation  and
development of its business plan.  These expenses are reflected on the statement
of operations as charges to general and administrative expense.

         Interest expense of $2,500 is  related  to  $300,000  of notes  payable
dated  November  30, 1998 that bear  interest  at 10% per annum.  The Company is
obligated  to make  monthly  interest  payments to holders of these notes and to
holders of an additional $850,000 of notes dated December 31, 1998.

CAUTIONARY FACTORS

         The  success  of the  Company's  plan  of  operation  may be  adversely
affected by several principal factors.

NEED FOR ADDITIONAL CAPITAL
---------------------------

         The  Company  needs a  substantial  amount of capital  to  achieve  its
business plan.  Conditions in financial markets influence  investors'  attitudes
and  willingness to invest in a particular  industry issuer or type of security.
If the Company is unable to obtain additional  capital through private or public
placement of its debt or equity  securities,  asset-based or bank financing,  or
through  ventures  with industry  partners,  its ability to achieve its business
objectives could be substantially impaired.

COMPETITION
-----------

         The online services and Internet  markets are highly  competitive.  The
Company  believes  that  existing  competitors,  which  include,  among  others,
commercial  online  services  such as  America  OnLine  and  Dixon's  FreeServe,
Internet-based  services,  including,  among others, the Microsoft Network,  and
Internet service  providers,  including  various national and local  independent
Internet  service  providers as well as long  distance  and  regional  telephone
companies,  including,  among  others,  British  Telecommunications  and Cable &
Wireless   Communications  and  various  other  regional   telephone   operating
companies,  are likely to enhance  their  service  offerings.  In addition,  new
competitors,  including  Internet  directory  services  and  various  media  and
telecommunications  companies,  have  entered  or  announced  plans to enter the
online services and Internet markets,  resulting in greater  competition for the
Company. Many of the direct competitors and possible future competitors referred

                                       6

<PAGE>

to  above  have  significantly  greater  financial,   technical,  marketing  and
personnel resources than the Company.  These factors may have a material adverse
effect on the Company's  financial condition and operating results. In addition,
in  response  to  increased  competition,   the  Company  may  adopt  additional
strategies  designed to continue the growth in its subscriber  base, such as new
marketing  programs and  promotional  offers and  implementation  of new pricing
programs.  Such strategies may result in an increase in costs as a percentage of
revenue.

         The business of providing  Internet access  services is new,  extremely
competitive  rapidly evolving and subject to rapid technological  change.  World
CallNet expects that such competition  will intensify  significantly in the near
future.  A large number of companies are developing or have  introduced  devices
and  technologies  to facilitate  access to the Internet via a television.  Such
competitors include suppliers of low-cost Internet  technologies.  Set top boxes
and devices are  proposed or under  development,  as well as video game  devices
that provide Internet access. In addition, manufacturers of television sets have
announced plans to introduce Internet access and Web browsing  capabilities into
their products through set-top boxes.

         Personal computer manufacturers are introducing Personal Communications
Systems  that offer  full-fledged  television  viewing  combined  with  Internet
access. Operators of cable television systems also plan to offer Internet access
in  conjunction  with cable  service.  World CallNet also competes with Internet
service providers and commercial online services. There can be no assurance that
World  CallNet's  competitors  will not develop  Internet  access  products  and
services  that are  superior  to, and priced  competitively  with those or World
CallNet,  thereby achieving greater market acceptance than MailTV. Many of World
CallNet's competitors,  as well as potential competitors,  have longer operating
histories,  greater  name  recognition,  larger  installed  customer  bases  and
significantly  greater financial,  technical and marketing  resources than World
CallNet.

SUBSCRIBER ATTRITION RATES
--------------------------

         World CallNet will devote considerable financial and human resources to
attract  subscribers to its service;  however,  due to circumstances that may or
may not be beyond the control of the Company,  these subscribers may discontinue
their  affiliation with the Company.  As a result of subscriber  attrition,  the
revenues  generated  from Internet  usage may decline  considerably,  as may the
rates that the Company can charge from advertising on its service as well as the
revenues that the Company anticipates from e-commerce.

REPAYMENT OF OBLIGATION UNDER CABLE & WIRELESS AGREEMENT
--------------------------------------------------------

            The Company  expects that its primary  source of internal  liquidity
will be revenues  from  telephone  toll  charges  earned  under the terms of the
agreement  that CallNet  Plc, an  affiliated  entity,  has with Cable & Wireless
Communications.  The  agreement  with Cable & Wireless  Communications  entitles
CallNet Plc, a provider of Internet access, to receive 35% of the telephone toll
revenues  Cable & Wireless  charges its  customers for calls to CallNet Plc. The
agreement requires CallNet Plc to refund certain payments if such telephone toll
minutes  do not  meet  certain  targets.   See  Part 1,  Item  2,  "Management's
Discussion and Analysis or Plan of Operation Liquidity and Capital Resources".


                                       7

<PAGE>

NETWORK CAPACITY AND OPERATIONS
-------------------------------

         Rapid  growth in  subscriber  demand may cause the Company and its data
communications  access  providers to  experience  difficulty at certain times in
providing  adequate server and network  capacity.  As a result,  subscribers may
from time to time  encounter  difficulty  in  accessing  and  using the  CallNet
service.  There  can be no  assurance  that the  Company  will be able to expand
server  and  network  capacity  at  a  rate  sufficient  to  satisfy  increasing
subscriber  demands,  and the  failure to do so could  have a  material  adverse
effect on the  Company's  business.  The  Company  currently  relies on  several
companies,  particularly  Cable  &  Wireless  Communications,  to  provide  data
communications  access  to its  service.  Any  damage  or  failure  that  causes
interruptions  in Cable & Wireless  operations  could  have a  material  adverse
effect on the Company's business.

         The  Company's  operations  are dependent on its ability to protect its
computer equipment and the information stored in its data centers against damage
by fire, power loss,  telecommunications  failures,  unauthorized intrusions and
other events.  The Company  believes it has taken prudent measures to reduce the
risk of interruption in its operations.  However, there can be no assurance that
these measures are sufficient.  Any damage or failure that causes  interruptions
in  the  Company's  operations  could  have a  material  adverse  effect  on its
business. While the Company carries property and business interruption insurance
to cover its computer operations, the coverage may not be adequate to compensate
for losses that may occur.

PRESSURES ON OPERATING MARGINS
------------------------------

         One of the  Company's  goals is to  increase  market  share by  rapidly
growing its subscriber  base. To achieve this goal, the Company has aggressively
promoted its service  offerings and has  implemented  pricing  changes and other
strategies  designed to facilitate  subscriber growth. The costs associated with
the rapid growth in its subscriber base and investments in customer support have
placed,  and will  continue  to  place,  pressures  on the  Company's  operating
margins.

         The Company may adopt  additional  strategies  designed to continue the
growth in its subscriber  base,  such as new marketing  programs and promotional
offers and implementation of new pricing programs. Such strategies may result in
an increase in costs as a percentage of revenues.  In addition,  an acceleration
in the growth of its subscriber base, changes in usage patterns among members or
continuing  investments  in content may also  increase  costs as a percentage of
revenues.  As a result,  the Company does not believe its operating margins have
stabilized.  There can be no assurance that the Company's operating margins will
not be adversely affected in the future by such strategies or other conditions.

SEASONALITY
-----------

         Subscriber  acquisition  is  expected  to be  highest in the second and
third fiscal  quarters,  when sales of new computers  and computer  software arc

                                       8

<PAGE>

highest due to the holiday season. Customer usage is expected to be lower in the
summer  months due largely to extended  day light  hours and  competing  outdoor
leisure activities.


MANAGING A RAPIDLY GROWING AND CHANGING BUSINESS
------------------------------------------------

         The Company  continues to experience  major  changes in its  operations
resulting  from rapid  expansion of its business  and other  factors  which have
placed  significant  demands on its  administrative,  operational  and financial
resources.  The Company's future  performance will depend in part on its ability
to manage its growth and to adapt its administrative,  operational and financial
control systems to the needs of the expanded  entity.  The failure of management
to anticipate,  respond to and manage changing business  conditions could have a
material adverse effect on the Company's business and results of operations.

ACCESS TO CONTENT PROVIDERS
---------------------------

         As competition in the online services market intensifies, it may become
more  difficult  or  expensive  to  secure  and  retain  content  and/or content
providers.  The Company  generally pays royalties to its content providers under
short-term renewable agreements,  and there can be no assurance that the loss of
a number of content  providers  or  significantly  increased  costs to  maintain
certain  content  providers  would  not have a  material  adverse  effect on the
Company's business.

NEW BUSINESSES AND INTERNATIONAL VENTURES
-----------------------------------------

         The Company  pursues new products and services to diversify its sources
of revenue and leverage its technological and other  competencies.  There can be
no assurance that the Company will be able to successfully  develop,  or achieve
commercial acceptance for, these new products and services.  The Company intends
to offer online services  internationally through either wholly owned operations
or  through  joint  ventures  with  existing   Internet  service   providers  of
telecommunications  companies. There can be no assurance that the Company or its
partners will be able to successfully  market,  sell and deliver its services in
these  markets.  In addition,  there are certain  significant  risks inherent in
doing business on an international  level,  such as laws governing  content that
differ  greatly  from  country to  country,  unexpected  changes  in  regulatory
requirements,  political risks, export restrictions, export controls relating to
encryption  technology,  tariffs  and  other  trade  barriers,  fluctuations  in
currency exchange rates, issues regarding  intellectual property and potentially
adverse  tax  consequences,  any or all of  which  could  impact  the  Company's
international operations.

CHANGING TECHNOLOGIES
---------------------

         As online  services  evolve,  the  Company  will be  required  to offer
technological  advances such as improved data  compression and delivery of voice
and full-motion  video.  Currently,  online  services are accessed  primarily by
personal   computers  via  modem.  As  online  services  become   accessible  by
screen-based  telephones,  television or other consumer electronic devices,  and
become  commercially  deliverable  over other wired conduits such as coaxial and
fiber optic cable,  the Company may have to develop new technology or modify its
existing  technology  to keep pace with  these  developments.  Pursuit  of these
technological advances will require substantial expenditures,  and there call be
no  assurance  that the  Company  will  succeed in adapting  its online  service
business to alternate access devices and conduits.

                                       9

<PAGE>


GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
---------------------------------------------

         Changes   in   the    regulatory    environment    relating    to   the
telecommunications  and  media  industry  could  have an  adverse  effect on the
Company's  business.  The Company cannot  predict the  likelihood  that any such
legislation will pass, or the financial impact, if any, the resulting regulation
may have.  Moreover,  the  applicability  to online service and Internet  access
providers  of  existing  laws  governing  issues such as  intellectual  property
ownership,  libel and  personal  privacy is  uncertain.  The law relating to the
liability  of  online  service  companies  and  Internet  access  providers  for
information  carried on or  disseminated  through  their  systems  is  currently
unsettled  and has been the  subject  of several  recent  private  lawsuits.  If
similar  actions were to be initiated  against the Company,  costs incurred as a
result of such actions  could have a material  adverse  effect on the  Company's
business.

RELIANCE ON KEY PERSONNEL
-------------------------

         The  Company's  success  depends  in part upon the  performance  of its
executive  officers and other key employees.  The loss of the services of one or
more of its key personnel  could have a material  adverse effect on the Company.
The  Company  depends on its  continued  ability to  attract  and retain  highly
skilled and qualified personnel.  Competition for such personnel is intense, and
there can be no assurance  that the Company will be successful in attracting and
retaining such personnel.

RELIANCE ON THIRD PARTIES
-------------------------

         The  Company  depends  substantially  upon third  parties  for  several
critical elements of its business,  including, among others, its revenue sharing
and Internet  routing  agreement  with Cable & Wireless  Communications  and its
agreement  with  Zilog,  Inc.  pursuant  to which  Zilog,  Inc.  has  agreed  to
manufacture  and supply  MAILTV chips to television  manufacturers.  The Company
purchases its MAILTV retrofit keyboards from an outside manufacturer pursuant to
purchase orders placed from time to time, will not carry significant inventories
of these keyboards and will have no guaranteed supply arrangements.  The Company
relies  on local  telephone  companies  and  other  companies  to  provide  data
communications  capacity  via local  telecommunications  lines and  leased  long
distance  lines.  In addition,  the Company relies on CallNet PLC as an Internet
service provider, which the Company plans to acquire.

INTELLECTUAL PROPERTY ISSUES
----------------------------

         The Company regards its patents, trademarks, trade dress, trade secrets
and similar  intellectual  property as critical to its success,  and the Company
will  rely  upon  patent  law,   trademark  law,  trade  secret  protection  and
confidentiality  and/or  license  agreements  with  its  employees,   customers,
partners and others to protect its proprietary rights. There can be no assurance
that the steps  taken by the Company to protect  any of its  proprietary  rights
will be adequate or that third parties will not infringe or  misappropriate  the
Company's patents, trademarks, trade dress and similar proprietary rights. In


                                       10

<PAGE>

addition,  there  can  be no  assurance  that  other  parties  will  not  assert
infringement claims against the Company.


VOLATILITY OF SHARE PRICE
-------------------------

         The  market  price of the  Company's  Common  Stock  has a  history  of
volatility.  Factors  such as  quarterly  variations  in  financial  results and
membership  growth  and usage,  new  pricing  strategies,  the  announcement  of
technological innovations, mergers, acquisitions,  strategic partnerships or new
product  offerings  by the  Company  or its  competitors,  the  entrance  of new
competitors into the online services market and changes in content providers may
have a significant impact on the market price of the Common Stock. Moreover, the
Common Stock could experience price  volatility based on market  conditions.  In
particular,  a substantial  short interest exists in the Company's  Common Stock
which may tend to exacerbate volatility.

FUTURE SALES OF COMMON STOCK
----------------------------

Sales of  substantial  amounts  of  Common  Stock  in the  public  market  could
adversely affect prevailing market prices of the Common Stock.















                                       11

<PAGE>

<TABLE>

<CAPTION>

                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)
              
                                  BALANCE SHEET
                           (Expressed in U.S. Dollars)

                    AS OF DECEMBER 31 AND SEPTEMBER 30, 1998


                                                           (Unaudited)
  ASSETS                                                  December 31,   September 30,
                                                             1998           1998
<S>                                                       <C>            <C>

CURRENT ASSETS:
   Cash                                                   $    89,966    $     1,995
    Cash held in escrow account                               757,283           --
                                                          -----------    -----------
                                                              847,249          1,995
                                                          -----------    -----------

OTHER ASSETS:
   Investment in marketable securities                        203,772        203,772
   Intangible asset, net of $325 and $0
      accumulated amortization                                 19,175         19,500 
                                                          -----------    -----------
       Total other assets                                     222,973        223,272
                                                          -----------    -----------
                 Total assets                             $ 1,070,196    $   225,267
                                                          ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Notes payable, net of unamortized discount
     of $51,000 and $0                                    $ 1,001,607    $      --
   Accounts payable and accrued expenses                       45,541         43,041
   Accrued compensation due officers                          165,565        165,565
   Deferred revenue                                           193,583        193,583
   Due to affiliate                                              --           10,486
                                                          -----------    -----------
            Total current liabilities                       1,406,296        412,675
                                                          -----------    -----------

COMMITMENT AND CONTINGENCY (Notes 3 and 7)

STOCKHOLDERS' DEFICIT:
   Common stock, $.001 par value; 20,000,000
     shares authorized, 7,489,333 and 5,500,000
     shares issues and outstanding                              7,489          5,500
   Additional paid-in capital                                 465,162        190,660
   Accumulated deficit                                       (810,300)      (378,285)
   Foreign currency translation adjustment                      1,549         (5,283)
                                                          -----------    -----------
            Total stockholders' deficit                      (336,100)      (187,408)
                                                          -----------    -----------
            Total liabilities and stockholders' deficit   $ 1,070,196    $   225,267
                                                          ===========    ===========

</TABLE>

             See accompanying notes to these financial statements.

                                       12

<PAGE>


                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)

                             STATEMENT OF OPERATIONS

                           (Expressed in U.S. Dollars)

                  FOR THE THREE MONTHS ENDED DECEMBER 31, 1998

                                   (Unaudited)


REVENUES                                                            $    34,988

COSTS AND EXPENSES:
   General and administrative expenses                                  461,012
   Interest expense                                                       5,666
   Amortization expense                                                     325
                                                                    -----------
                                                                        467,003
                                                                    -----------

NET LOSS                                                               (432,015)

OTHER COMPREHENSIVE GAIN - Foreign currency translation adjustment        6,832
                                                                    -----------
COMPREHENSIVE LOSS                                                  $  (425,183)
                                                                    ===========

NET LOSS PER SHARE (basic and diluted)                                  $  (.06)
                                                                        =======

WEIGHTED AVERAGE SHARES                                               7,245,043
                                                                    ===========









             See accompanying notes to these financial statements.

                                       13


<PAGE>

<TABLE>

<CAPTION>

                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)
                                                     
                  STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

                           (Expressed in U.S. Dollars)

                  FOR THE THREE MONTHS ENDED DECEMBER 31, 1998

                                   (Unaudited)

                                                                                                           Foreign
                                                                              Additional                   Currency
                                                        Common Stock           Paid-In     Accumulated    Translation
                                                    Shares       Amount        Capital       Deficit      Adjustment     Total
                                                    ------       ------        -------       -------      ----------     -----   
<S>                                                 <C>         <C>          <C>           <C>           <C>           <C>

Balance September 30, 1998                          5,500,000   $    5,500   $  190,660    $ (378,285)   $   (5,283)   $ (187,408)

Issuance of shares of common stock on October 9,
1998 in connection with acquisition of 100% of
the Company's common stock by General
 American Royalty                                   1,829,333        1,829       13,043          --            --          14,872

Issuance of 160,000 shares on November 19, 1998
for cash                                              160,000          160      167,400          --            --         167,560

Issuance of common stock purchase warrants                                       94,059                                    94,059

Net loss for the period                                  --           --           --        (432,015)         --        (432,015)


Foreign currency translation adjustment                  --           --           --            --           6,832         6,832
                                                   ----------   ----------   ----------    ----------    ----------    ----------
                                                    7,489,333   $    7,489   $  465,162    $ (810,300)   $    1,548    $ (336,100)
                                                   ==========   ==========   ==========    ==========    ==========    ==========
</TABLE>




              See accompanying notes to these financial statements.

                                       14




<PAGE>


                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)


                             STATEMENT OF CASH FLOWS

                           (Expressed in U.S. Dollars)

                  FOR THE THREE MONTHS ENDED DECEMBER 31, 1998

                                   (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                           $(432,015)
   Accretion of discount on notes payable                                 3,166
   Increase in accounts payable and accrued expenses, net of
      foreign currency translation adjustments                            2,500
   Decrease in amount due to affiliate                                   10,486
    Other
                                                                          1,436
                                                                      ---------
               Net cash used by operating activities                   (414,427)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from short-term indebtedness, net of financing costs        334,838
   Cash received in common stock issuances                              167,560
                                                                      ---------
                                                                        502,398

NET INCREASE IN CASH                                                     87,971

CASH, beginning of period                                                 1,995
                                                                      ---------

CASH, end of period                                                   $  89,966
                                                                      =========
NON CASH TRANSACTIONS:
   Purchase of net assets in reverse acquisition for common stock     $  14,872
                                                                      =========



              See accompanying notes to these financial statements.

                                       15

<PAGE>


                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

                           (Expressed in U.S. Dollars)


1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES 
     ------------------------------------------------ 

     Organization
     ------------
     World CallNet,  Inc. (the  "Company")  (formerly  Worldwide  Communications
     (Holdings)  Limited) is a  development  stage company  incorporated  in the
     United  Kingdom on January 23,  1998.  The  Company's  business  plan is to
     develop  and sell  certain  consumer  internet  software  and  operate as a
     pay-as-you-go   internet  service  provider.   The  accompanying  financial
     statements  include  the  accounts  of the  Company  and its  wholly  owned
     subsidiary,  Overleaf  Systems,  Limited  ("Overleaf").  Overleaf  has been
     inactive to date.

     Investment in Marketable Securities
     -----------------------------------
     The  Company's  investment in securities at December 31, 1998 is classified
     as available for sale and carried at estimated market value.

     Foreign Currency Translation
     ----------------------------
     The Company  conducts its  operations and maintains its accounts in British
     pounds.  Financial statements prepared in U.S. dollars are translated based
     on the exchange rate at the balance  sheet date for assets and  liabilities
     and  a  weighted  average  rate  for  revenues  and  expenses.  Translation
     adjustments  are  accumulated  in a  separate  component  of  stockholders'
     deficit entitled foreign currency translation adjustment.

     Loss Per Share
     -------------- 
     Basic loss per share is computed  based on the weighted  average  number of
     shares outstanding  during the period.  Diluted loss per share takes common
     stock  equivalent  shares  (such  as  options,   warrants  and  convertible
     securities) into consideration. However, common stock equivalent shares are
     not considered when their effect would be anti-dilutive.

     Use of Estimates
     ----------------
     The  preparation of the Company's  financial  statements in conformity with
     generally accepted accounting  principles requires the Company's management
     to make estimates and assumptions that affect the amounts reported in these
     financial  statements and accompanying  notes.  Actual results could differ
     from those estimates.

     Income Taxes
     ------------
     The Company  accounts for income taxes under the  liability  method,  which
     requires  recognition  of  deferred  tax  assets  and  liabilities  for the
     expected  future tax  consequences of events that have been included in the
     financial statements or tax returns. Under this method, deferred tax assets
     and liabilities are determined based on


                                       16

<PAGE>


                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)
                                                            
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                                            
                           (Expressed in U.S. Dollars)


     the difference between the financial statements and tax bases of assets and
     liabilities  using  enacted  tax rates in effect  for the year in which the
     differences   are  expected  to  reverse.   The  Company  has  a  tax  loss
     carryforward at September 30, 1998 of approximately $200,000 and a deferred
     tax asset, which is fully reserved, of approximately $50,000.

     Intangible Asset
     Intangible  asset  consists  of  intellectual  property,   which  is  being
     amortized by the straight-line method over five years.

     Statement of Cash Flows
     For purposes of the  statements  of cash flows,  the Company  considers all
     highly liquid debt instruments purchased with an original maturity of three
     months or less to be cash equivalents.

2.   CONTINUED OPERATIONS
     --------------------

     The  Company is in the  development  stage and has had  $34,988 in revenues
     through   December  31,  1998.  In  addition,   the  Company  will  require
     substantial  capital to implement  its business  plan.  These factors raise
     substantial  doubt  about the  Company's  ability  to  continue  as a going
     concern.  In December 1998, the Company completed a one-year note offering,
     in which it raised net proceeds of  approximately  $1,100,000.  The Company
     has also  negotiated a  development  and  marketing  agreement  with a much
     larger company that management believes will facilitate market penetration.
     Management also intends to attempt to raise additional  capital in the near
     term.  Management believes these actions will permit the Company to achieve
     its  objectives  and attain  profitable  operations to allow the Company to
     continue as a going concern.

3.   INVESTMENT AND DEFERRED REVENUE
     -------------------------------

     In  September  1998,  the  Company  acquired  2,000,000  shares in Cherokee
     Leisure Plc ("Cherokee"),  a publicly traded company in the United Kingdom,
     from another  company in exchange for payment of $10,189 and  assumption of
     the other company's obligations to Cherokee. The obligations are to design,
     install  and  support a website  for  Cherokee.  The Company has valued the
     Cherokee  shares based on their  estimated  market value of $203,772 at the
     time of acquisition. The estimated market value was materially unchanged at
     December 31, 1998. The Company has recorded a deferred revenue liability of
     $193,583,  which represents the estimated value of the shares less the cash
     payment. The cash payment was made by another company with


                                       17

<PAGE>


                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)
                                                            
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                                            
                           (Expressed in U.S. Dollars)

     directors in common with the Company and is included in "due to  affiliate"
     in the  accompanying  balance sheet. The Company is entitled to receive 40%
     of any revenue  generated  from the website.  If such revenue  generated is
     less than  approximately  $700,000 through April 30, 1999, the Company must
     return  500,000  shares of the  Cherokee  stock.  If such  revenue  exceeds
     approximately  $2,800,000  through  April 30,  1999,  the  Company  will be
     entitled to an additional 500,000 shares of the Cherokee stock.

4.   ACQUISITIONS
     ------------

     In October 1998, 100% of the Company's common stock was acquired by General
     American  Royalty,  Inc.  ("GAR").  The  Company's   stockholders  obtained
     approximately  75% of the outstanding  common stock of GAR and three of the
     Company's  directors  were  appointed  to the board of GAR.  For  financial
     reporting  purposes,  the Company has  accounted for the  transaction  as a
     reverse  acquisition of GAR. As a result of the transaction,  the Company's
     stockholders'  deficit  section  reflects the GAR capital  structure in the
     accompanying balance sheet. As of the closing date of the acquisition,  the
     following amounts were recorded to reflect the accounts of GAR :

                   Total assets               $ 20,537
                   Total liabilities             5,665
                                              --------
                   Stockholder's equity       $ 14,872
                                              ========


5.   NOTES PAYABLE
     -------------  

     In December  1998,  the  Company  completed  a private  placement  of notes
     payable  totaling  $1,150,000.  The  notes  bear  interest  at 10%  and are
     collateralized by the Company's shares of Cherokee Leisure Plc. Interest is
     due  monthly  and  principal  is due in full on December 1, 1999 or earlier
     under certain  circumstances,  including the raising by the Company of $3.5
     million or more of additional  capital.  The holders of the notes were also
     issued stock purchase  warrants  entitling them to purchase an aggregate of
     575,000  shares of the  Company's  common stock  between  March 1, 1999 and
     December 1, 2000 at $1.00 per share. The Company paid a $57,500  consulting
     fee and issued stock purchase warrants,  on the same terms described above,
     to purchase 182,500 shares of common stock in connection with the offering.

     The  Company  has valued the  aforementioned  stock  purchase  warrants  at
     $94,059 using a discount factor of 8%. Both the value of the stock purchase
     warrants and the


                                       18

<PAGE>

                               WORLD CALLNET, INC.
             (Formerly Worldwide Communications (Holdings) Limited)
                          (A Development Stage Company)
                                                            
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                                            
                           (Expressed in U.S. Dollars)


     referral fee of $57,500 have been  treated as a discount to notes  payable.
     Accretion  of  discount  related to the  discount  was $3,666 for the three
     months  ended  December  31,  1998 and is  included  in  interest  expense.
     Remaining  discount  is  being  amortized  based  on the  maturity  date of
     December 1, 1999.

6.   RELATED PARTY TRANSACTIONS
     --------------------------

     Certain  directors and  stockholders  of the Company are  directors  and/or
     stockholders in other companies with which the Company had the transactions
     set forth below:

     o   Certain  intellectual  property rights related to e-mail  functionality
         were  assigned  to the Company by  Telemail  Europe (via the  Company's
         newly formed subsidiary, Overleaf) in exchange for 100 shares of stock.
         The parties  that  received  the stock also paid the Company a total of
         $166 for the shares.

     o   The Company  entered  into an  agreement  with CallNet Plc in which the
         Company will  license its system for the  business of internet  service
         provider and CallNet Plc will sub-license such system to other parties.

7.   COMMITMENTS
     -----------

     The Company has  employment  agreements  with three  officers  who are also
     directors.  Each of these employment  agreements  requires an annual salary
     through September 2001 of approximately $110,000 each, and provides that if
     such  agreement  is  terminated  by  either  party  during  the term of the
     agreement,  the full  salary and  benefits  are  required to be paid to the
     executive officer until the end of the term of the agreement. Each of three
     executive  officers  has agreed with the Company  that until a  substantial
     amount of additional capital has been raised, he will receive only one-half
     of his salary. The Company's  obligation to pay the deferred portion of the
     salary, without interest, is an unsecured obligation of the Company that is
     subordinated  to the claims of certain  other  unsecured  creditors  of the
     Company.  Each of these  officers has identical  employment  agreements and
     payment arrangements with CallNet Plc.

8.   SUBSEQUENT EVENTS
     -----------------

     In January 1999,  the Company's  stockholders  approved (1) a change in the
     corporate name of GAR and its  subsidiary,  the Company,  to World CallNet,
     Inc.,  (2) an increase in the  authorized  shares to  30,000,000  shares of
     common  stock and  10,000,000  shares of preferred  stock,  and (3) a stock
     option plan that had been


                                       19

<PAGE>


     adopted by the board of directors in November 1998.  Under the stock option
     plan, the Company's board of directors may grant options to acquire up to a
     total of  1,000,000  shares  of stock to  officers,  directors,  employees,
     advisors or consultants of the Company.

     Effective  November  1998,  the  Company  granted  options to  purchase  an
     aggregate of 600,000 shares as follows:

              Grantee                                              Options 
              -------                                              -------
              Each of three officers who are also directors        150,000
              One outside director                                 100,000
              One advisory director                                 50,000

     Each option  entitles  the grantee to purchase  one share of the  Company's
     common  stock at an  exercise  price of $1.50  per  share  and  expires  in
     November 2001.

     In March 1999,  the Company  granted an option to an officer of the Company
     to purchase  100,000  shares of Common Stock at an exercise  price of $3.50
     per share, which option expires in March 2002.

     In February 1999, the Company  completed the acquisition of fifteen percent
     (15%)  of the  stock  of  CallNet  Plc by  issuing  500,000  shares  of the
     Company's common stock.














                                       20





<PAGE>



                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

         Not applicable.

Item 2.  Changes in Securities.

     (c)
     (1) On October 9, 1998,  the  registrant  acquired 100% of the  outstanding
         common stock of  privately-held,  UK based,  World Wide  Communications
         (Holdings)  Ltd.  ("WWCH"),  for 5,500,000  shares of its common stock,
         pursuant to the exemption from  registration  set forth in Section 4(2)
         of  the   Securities  Act  of  1933,  as  amended.   The   registrant's
         shareholders of record on October 9, 1998 received  396,000  additional
         shares  of  common  stock,  as a stock  dividend  and,  therefore,  the
         distribution  of such shares of common stock did not  constitute a sale
         that  required  registration  under  the  Securities  Act of  1933,  as
         amended.  As a result of the  acquisition  and issuance of shares,  the
         ("WWCH")  shareholders own approximately 75% of the registrant's issued
         and outstanding common stock.

         Effective as of the closing date, the registrant's  officers and two of
         its directors  resigned.  James F. Smith  remained as a director of the
         registrant.  Paul  Goodman-Simpson  was  elected  President  and  Chief
         Executive Officer, Aaron Goodman-Simpson was elected Vice President and
         Secretary,  and Keith Goodyer was elected Vice President and Treasurer.
         These three  officers were also  appointed to the Board of Directors of
         the registrant.

         Information  regarding  security  ownership,  compensation and business
         background of the registrant's  directors and management as of December
         31,  1998 is  contained  in the  registrant's  report  on  Form  10-KSB
         covering the period from January 23, 1998 through September 30, 1998.

     (2) The Company has  completed  two private  placements  of notes and stock
         purchase warrants in the quarter ended December 31, 1998. See Item 5(a)
         of this Part II. The notes and stock  purchase  warrants were issued to
         private investors pursuant to the exemption from registration set forth
         in Section 4(2) of the Securities Act of 1933, as amended.

Item 3.  Defaults on Senior Securities.

         Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

         Not applicable.

                                       21

<PAGE>


Item 5.  Other Information.

   (a)   On November 30, 1998 the  registrant  completed a private  placement of
         unsecured  notes payable  totaling  $300,000.  Interest on the notes is
         payable monthly at a rate of 10% per annum,  and principal on the notes
         is  due  in  full  on  December  1,  1999  and  earlier  under  certain
         circumstances,  including  the  raising  of  $3.5  million  or  more of
         additional capital.  On December 31, 1998 the registrant  completed the
         placement of an additional $850,000 of notes payable.  The terms of the
         notes are identical to the previous  placement except that the notes in
         the $850,000  placement are  collateralized  by the Company's shares of
         Cherokee Leisure Plc.

         All  holders  of the notes were also  issued  stock  purchase  warrants
         entitling  them to  purchase  an  aggregate  of  575,000  shares of the
         Company's  common stock  between  March 1, 1999 and December 1, 2000 at
         $1.00 per share.  The Company paid a $57,500  consulting fee and issued
         stock purchase warrants, on the same terms described above, to purchase
         182,500 shares of common stock in connection with the offering.

         The holders of such stock  purchase  warrants have the right to require
         the  Company at its  expense to register  under the  Securities  Act of
         1933,  as  amended,  the resale of such  stock  purchase  warrants  and
         underlying  shares of the  Company  common  stock  upon the  request of
         holders of such stock  purchase  warrants to acquire 51% or more of the
         shares of  Company  common stock underlying such purchase warrants.  In
         addition, such holders have certain piggyback registration rights.

   (b)   Effective January 15, 1999, James Christodoulou  ("Christodoulou")  was
         elected Chief Financial Officer of the Company. The Company has reached
         an agreement, in principle with Christodoulou to enter into a three (3)
         year employment agreement,  effective as of January 15, 1999, providing
         for an annual salary of approximately $180,000, provided that until the
         Company has raised a substantial amount of additional capital, one-half
         of Mr.  Christodoulou's  salary will be deferred in a manner similar to
         the  other  executive  officers  as  described  in Note 5 to  Financial
         Statements  above.  The termination  provisions of Mr.  Christodoulou's
         employment agreement have not been fully negotiated, but it is expected
         that the employment  agreement will provide for  termination  for cause
         and the  payment  of the full  amount  remaining  under the  employment
         agreement in the event that  Christodoulou  is  terminated  following a
         change in control of the Company.




                                       22


<PAGE>


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

   (a)   Exhibits.

         2.1      The Plan of  Acquisition  with  WWCH,  which  is  incorporated
                  herein  by  reference  from  Exhibit  2.1 to Form 10-K for the
                  period from January 23, 1998 through September 30, 1998.

         3.1      Certificate of  Incorporation of the registrant and amendments
                  thereto,  which  is  incorporated  herein  by  reference  from
                  Exhibit 3(i) to Form 10 filed on March 26, 1997.

         3.2      Amendment   to   Certificate   of   Incorporation,   which  is
                  incorporated  by  reference  herein from  Exhibit 3(i) to Form
                  8-K, dated October 23, 1998.

         3.3      By-laws of the registrant, which are incorporated by reference
                  herein from Exhibit 3(ii) to Form 10 filed on March 26, 1997.

         10.1     Specimen  of  Promissory  Note  dated  November  30,  1998 and
                  December 31, 1998, Security Agreement dated December 31, 1998,
                  and  Warrant  to  Purchase  Shares of Common  Stock of General
                  American  Royalty,  Inc.  d.b.a.  World  CallNet,  Inc.  dated
                  November  30,  1998  between  the  registrant  and  twenty-two
                  private investors filed herewith.

         10.2     Employment agreements  between the Company  and the  following
                  corporate    officers:     Paul     Goodman-Simpson,     Aaron
                  Goodman-Simpson and Keith Goodyer,  which are  incorported  by
                  reference  herein  from  Exhibit 10(b) to  Form 10KSB/A  filed
                  February 4, 1999.

         10.3     The Company's Stock  Option Plan,  which  is  incorporated  by
                  reference herein from Exhibit 99 to Form 8-K filed January 26,
                  1999.

         27       Financial Data Schedule filed herewith.


   (b)   Reports on Form 8-K.

         One  report on Form 8-K dated  October  9,  1998 was filed  during  the
     period covered by this report.  The registrant  reported the acquisition of
     100% of World Wide Communications  (Holdings) Ltd. and change in control of
     the registrant resulting from the acquisition. The Form 8-K also reported a
     change of fiscal yearend from October 31 to September 30.



                                       23

<PAGE>



                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                                WORLD CALLNET, INC.
                                                -------------------
                                                    (Registrant)


                                                /s/ Paul Goodman-Simpson
                                                -------------------------------
                                                Paul Goodman-Simpson, Director,
                                                President and Chief Executive
                                                Officer

                                                Date: March 15, 1999  



                                                /s/ James Christodoulou
                                                -------------------------------
                                                James Christodoulou, Chief
                                                Financial Officer (Principal
                                                Financial and Accounting
                                                Officer)

                                                Date: March 15, 1999  










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