SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549

                                    FORM 10-KSB

                                    (Mark One)

                   Annual Report Pursuant to Section 13
       X           or 15(d) of the Securities Exchange
                   Act of 1934 for the fiscal year
                   ended December 31, 1997

                                  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 33-32341-D

                          WORLDPORT COMMUNICATIONS, INC.
          (Name of Small Business Registrant as Specified in its Charter)


               Delaware                       84-1127336
   (State or other jurisdiction of     (IRS Employer ID Number)
    incorporation of organization)

    3610 Kennesaw North Industrial Parkway,         30144
    Suite 200, Kennesaw, Georgia                  (Zip Code)
   (Address of principal executive offices)

   Registrant's telephone number: (770) 792-3774
   Securities registered pursuant to Section 12(b) of the Act: None
   Securities registered pursuant to Section 12(g) of the Act: None
                                Name of each exchange on which registered
                                                       N/A

       Check whether the issuer (1) filed all reports required to be filed by
       Section 13 or 15(d) of the Securities Exchange Act of 1934 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.

                                  YES      X   NO

       Check if there is no disclosure of delinquent filers in response to Item
       405 of Regulation S-B is not contained in this form, and no disclosure
       will be contained, to the best of registrant's knowledge, in definitive
       proxy or information statements incorporated by reference in Part III of
       this Form 10-KSB or any amendment to this Form 10-KSB [ X ]

       The Registrant's revenues for its most recent fiscal year were
       $2,777,575.

       The approximate aggregate market value of common stock of the Registrant
       held by non-affiliates of the Registrant is $68,459,181, computed on the
       basis of $6 7/8 per share, average bid/ask price of the common stock on
       the OTC Bulletin Board on March 30, 1998.

       The number of shares of the Registrant's common stock, $0.0001 par value
       per share, outstanding as of March 30, 1998 was 17,383,333.
       Documents incorporated by reference: None.

                   Transitional Small Business Disclosure Format
                                   (Check one):

                            Yes _______      No __X___


                          WORLDPORT COMMUNICATIONS, INC.

                                 TABLE OF CONTENTS


                                                                       Page
          Item                                                         Number
                                        PART I

            1.  Description of Business . . . . . . . . . . . . . .        1
            2.  Description of Properties . . . . . . . . . . . . .       10
            3.  Legal Proceedings . . . . . . . . . . . . . . . . .       11
            4.  Submission of Matters to a Vote of Security Holders       11


                                       PART II

            5.  Market for Company's Common Equity and Related            11
                Stockholder Matters  . . . . . . . . . . .
            6.  Management's Discussion and Analysis of Operations .      12
            7.  Financial Statements  . . . . . . . . . . . . . . .       19
            8.  Changes in and Disagreements with Accountants on          36
                Accounting and Financial Disclosure  . .

                                       PART III

            9.  Directors, Executive Officers and Control Persons .       37
           10.  Executive Compensation . . . . . . . . . . . . . . .      40
           11.  Security Ownership of Certain Beneficial Owners and       44
                Management . . . . . . . . . . . . .
           12.  Certain Relationships and Related Transactions  . .       47


                                       PART IV

           13.  Exhibits and Reports on Form 8-K  . . . . . . . . .       50




                                      PART I

  NOTE ON "FORWARD-LOOKING" STATEMENTS

  This Annual Report contains certain "forward-looking statements" within the
  meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E
  of the Securities Act of 1934, as amended, and the Private Securities
  Litigation Reform Act of 1995, including, among others (i) expected changes
  in the Company's revenues and profitability (ii) prospective business
  opportunities and (iii) the Company's strategy for expanding its business.
  Forward-looking statements are statements other than historical information or
  statements of current condition.  Some forward-looking statements may be
  identified by use of terms such as "believes", "anticipates", "intends" or
  "expects".  These forward-looking statements relate to the plans, objectives
  and expectations of WorldPort Communications, Inc. (the "COMPANY") for future
  operations.  Although the Company believes that its expectations with respect
  to the forward-looking statements are based upon reasonable assumptions
  within the bounds of its knowledge of its business and operations, in light
  of the risks and uncertainties inherent in all future projections, the
  inclusion of forward-looking statements in this report should not be regarded
  as a representation by the Company or any other person that the objectives or
  plans of the Company will be achieved.

  The Company's revenues and results of operations could differ materially from
  those projected in the forward-looking statements as a result of numerous
  factors, including, but not limited to, the following:  (i) changes in
  external competitive market factors, (ii) termination of certain operating
  agreements or inability to enter into additional operating agreements, (iii)
  inability to satisfy anticipated working capital or other cash requirements,
  (iv) changes in or developments under domestic or foreign laws, regulations,
  licensing requirements or telecommunications standards, (v) changes in the
  availability of transmission facilities, (vi) changes in the Company's
  business strategy or an inability to execute its strategy due to
  unanticipated changes in the market, (vii) various competitive factors that
  may prevent the Company from competing successfully in the marketplace,
  (viii) the Company's lack of liquidity and its ability to raise additional
  capital, (ix) loss of services of key executive officers and (x) loss of a
  customer which provides significant revenues to the Company.  In light of
  these risks and uncertainties, there can be no assurance that actual results,
  performance or achievements of the Company will not differ materially from
  any future results, performance or achievements expressed or implied by such
  forward-looking statements.  The foregoing review of important factors should
  not be construed as exhaustive.  The Company undertakes no obligation to
  release publicly the results of any future revisions it may make to forward-
  looking statements to reflect events or circumstances after the date hereof
  or to reflect the occurrence of unanticipated events.


  ITEM 1.  DESCRIPTION OF BUSINESS

  Overview

  The Company, a publicly held Delaware corporation, is a global, facilities-
  based telecommunications services provider offering a full range of voice and
  value-added services to carriers and corporate customers worldwide.  The
  Company is focusing on expanding its network infrastructure in the United
  States and in major markets in Europe, Asia-Pacific and Latin America.
  Together, these regions generate approximately 95% of all international long
  distance traffic.  According to Telegeography, Inc. ("TELEGEOGRAPHY"), an
  independent research and publishing company, total revenues from
  international long distance services worldwide were estimated at $60 billion
  in 1996 and are estimated to exceed $80 billion by 2000.

  The Company has targeted geographic regions where it believes privatization
  and liberalization will enable it to gain early market entry and achieve
  rapid growth.  The Company is seeking to increase its global market share
  through internal business development, acquisitions and international
  strategic alliances.  The Company is developing a comprehensive global sales
  and service organization to market competitively priced, carrier-grade voice
  and enhanced telecommunications services to major corporate and business
  customers, telecommunications carriers and resellers, Internet providers and
  other high-volume marketers of long distance services worldwide.

  The Company is developing a global telecommunications network consisting of
  (i) switches, enhanced services platforms, leased circuits and other
  telecommunications equipment ("ON-NET") and (ii) carrier services agreements,
  access and termination agreements, interconnection agreements and other
  facilities-sharing agreements ("OFF-NET").  Together, these
  telecommunications assets and agreements comprise the Company's global
  network.   The Company's customers utilize a combination of local access
  numbers and codes and domestic and international toll-free numbers to access
  the Company's network.  The Company intends to continue to expand its network
  through (i) the purchase and installation of equipment for existing and new
  markets, (ii) additional interconnection, access and termination agreements
  with other carriers and service providers in the U.S. and internationally and
  (iii) additional acquisitions of international telecommunications assets,
  operations and service providers.

  The Company's global network strategy is to strategically deploy
  international gateway switches and other network equipment in the United
  States and in international markets, such as The Netherlands, with high
  international traffic volumes, and physically link these switches, whenever
  possible, via owned or leased circuits on undersea and other fiber optic
  cables. With this global backbone of international gateway switches and
  undersea fiber optic cables, the Company's strategy is to develop network
  facilities within each of the countries where it operates.  In order to
  provide origination and termination services to and from customers in
  targeted geographic markets, the Company enters into one or more
  interconnection agreements in each country where it operates.

  The Company's network also includes a switching center, calling card services
  platform and multi-lingual operator services center located at its facility
  in Omaha, Nebraska.  From this facility, the Company provides a suite of
  value-added telecommunications products and services to carriers, other
  telecommunications services providers and to marketers and distributors of
  international long distance services.  The Company's customers worldwide
  utilize a combination of local access and international toll-free numbers to
  access the Company's calling card platform, which enables them to complete
  higher quality, lower cost international calls.  See "MANAGEMENT'S DISCUSSION
  AND ANALYSIS OF OPERATIONS - ACQUISITIONS".

  The Company has targeted Tier I and Tier II U.S. long distance carriers,
  foreign PTTs, internationally focused long distance resellers and other high-
  volume marketers of long distance services as its primary wholesale
  customers.  While most Tier I carriers and PTTs operate their own networks
  and have operating agreements worldwide with other PTTs for the termination
  of international calls, they can utilize the Company's network, either on a
  dedicated circuit or switched circuit basis, for carrying overflow traffic
  from their own networks or to take advantage of least cost routing to markets
  where the Company has developed a distinct price or service quality
  advantage.

  In addition to carriers that operate their own international networks, the
  Company intends to provide international long distance services to U.S. and
  international switch-based and switchless resellers who will utilize the
  Company's international long distance services to provide high quality
  international services to their wholesale or retail customers. According to
  Telegeography 1997/1998, the market share of U. S.-originated international
  traffic carried directly by facilities-based Tier II U. S. carriers increased
  by over 50% between 1995 and 1996 to nearly 700 million minutes.  In
  addition, switched-based resellers accounted for 34% of all U. S.-originated
  outbound traffic, with the top 15 Tier II switched resellers carrying over 5
  billion minutes in 1996.   As a result of telecommunications deregulation in
  Europe, there are now growing numbers of switched-based and switchless
  resellers competing with incumbent PTTs, all of which are potential customers
  for the Company.  The Company's reseller and distributor customers typically
  purchase the Company's services and then resell these long distance services
  to their own wholesale or retail customers.

  The Company is licensed to operate in the United States as a facilities-based
  international carrier under a Section 214 license granted by the U.S. Federal
  Communications Commission.  Also, the Company, through its wholly-owned
  operating subsidiaries, is in the process of acquiring or applying for
  telecommunications licenses in the international markets where the Company
  intends to operate.

  Recent Developments

  During the first quarter of 1998, the Company has:

  o  Signed an advisory agreement with a major Wall Street investment-banking
     firm pursuant to which the investment banker intends to advise the Company
     with regard to future financing options.

  o  Entered into an agreement to acquire an International Simple Resale ("ISR")
     license in the United Kingdom which will permit the Company to deploy
     network infrastructure and commence the marketing of international long
     distance voice, data and multimedia services in the U. K.  Additionally,
     the Company plans to immediately apply for an International Facilities
     License ("IFL") which will enable it to own international network
     facilities such as trans-Atlantic fiber optic cable capacity that land in
     the United Kingdom.

  o  Received proceeds of approximately $10.1 million in connection with the
     sale of its Series B Convertible Preferred Stock. See "LIQUIDITY AND
     CAPITAL RESOURCES" AND "SUBSEQUENT EVENTS".

  o  Commenced operations in The Netherlands through the acquisition of a local
     company, the hiring of in-country management and the purchase and
     installation of network equipment.  See "SUBSEQUENT EVENTS".

  o  Through its wholly-owned subsidiary, WorldPort Communications Europe B.V.
     ("WORLDPORT EUROPE"), entered into an interconnection agreement with PTT
     Telecom, the national telephone company of The Netherlands.  This agreement
     enables the Company to physically connect its network with the network of
     PTT Telecom, and to originate and terminate traffic throughout The
     Netherlands via the PTT Telecom network.

  0  Entered into a service agreement with N.V. Casema ("CASEMA"), The
     Netherlands' largest cable television network operator, pursuant to which
     Casema will provide the Company with fiber optic capacity connecting the
     Company's switching equipment in the cities of Amsterdam, The Hague,
     Rotterdam and Utrecht.  Casema operates a nationwide infrastructure of
     fiber optic cables in The Netherlands for voice, multimedia and other
     telecommunications services, with an active maximum network capacity of 2.4
     Gb/s.

  o  Executed a definitive agreement to acquire the assets of InterContinental
     Exchange, Inc. ("ICX"), a California-based provider of international long
     distance services primarily to customers in the U.S., Asia-Pacific and
     Latin America.  See "SUBSEQUENT EVENTS".

  o  Committed to purchase an indefeasible right of use ("IRU") providing the
     Company with STM-1 transmission capacity on Atlantic Crossing 1 ("AC-1"), a
     state-of-the-art, trans-Atlantic fiber optic cable which is scheduled to
     commence service in mid-1998.  See "LIQUIDITY AND CAPITAL RESOURCES".

  o  Increased its existing lease financing facility with Forsythe McArthur
     Associates, Inc. ("FORSYTHE") to an aggregate $13,000,000 to finance
     additional infrastructure equipment.  See "LIQUIDITY AND CAPITAL RESOURCES"
     AND "SUBSEQUENT EVENTS".

  o  Expanded its executive management team in the following areas:  (i) global
     network development, (ii) network operations, (iii) sales and marketing and
     (iv) finance and administration.  See "DIRECTORS, EXECUTIVE OFFICERS, AND
     CONTROL PERSONS".

  Strategy

  The Company's overall objective is to be a low-cost global provider of long
  distance services in the expanding worldwide telecommunications marketplace,
  with a focus on providing transmission, termination and value-added services
  in newly deregulating markets where opportunities exist for early market
  entry, rapid market penetration and significant gross margins. In all cases,
  the Company will seek to be the lowest cost operator in a given market niche
  by (i) carrying customer traffic over its own network facilities (On-Net)
  whenever and wherever possible, (ii) leveraging its favorable network rate
  structures with EQUANT Network Services Inc. ("EQUANT") and other service
  providers to offer seamless, low-cost services on a global basis, (iii)
  leveraging its global network expansion in emerging markets to negotiate, on
  a reciprocal basis, low transmission, access and termination rates for the
  use of the networks of other carriers (Off-Net) in areas where the Company
  does not yet have its own facilities, (iv) identifying cost effective sales
  agents, marketing partners and distribution channels in new markets and (v)
  implementing a network design and technology strategy that blends the optimal
  least cost routing capabilities of traditional circuit switching, frame
  relay, asynchronous transfer mode ("ATM") and Internet Protocol ("IP").

  The key elements of the Company's business strategy are as follows:

  EXPAND THE COMPANY'S NETWORK FACILITIES IN ORDER TO INCREASE OPERATING
  MARGINS   The Company intends to continue to expand its network in the U.S.,
  Europe, Latin America and Asia-Pacific in order to carry an ever increasing
  portion of its traffic On-Net.  The Company believes that carrying customer
  traffic over its own network facilities enables it to control quality and to
  achieve higher gross margins.   The Company intends to continue to install
  major international gateway switches in strategic sites around the world and
  plans to deploy routers, network nodes, points of presence ("POPS") and other
  equipment in key metropolitan areas in the countries where it operates.  The
  Company intends to link these globally-deployed switches and nodes via a
  combination of owned capacity on undersea fiber optic cables (i.e. the
  Company's ownership interest in an STM-1 circuit on the AC-1 trans-Atlantic
  fiber optic cable), leased domestic fiber optic circuits (i.e. the Company's
  access to a nationwide 34 megabit fiber optic loop in The Netherlands) and
  other leased terrestrial and satellite-based circuits.

  TARGET HIGH-VOLUME CUSTOMERS TO MAXIMIZE RETURN ON NETWORK INVESTMENTS - In
  the United States, the Company intends to target Tier I and Tier II
  facilities-based carriers and other resellers as its primary "carrier's
  carrier" international long distance transmission and termination customers.
  The Company also intends to target other high-volume customers in the United
  States such as competitive local exchange carriers ("CLECS") and distributors
  of telecommunications services. In international markets, the Company will
  seek to target PTTs, emerging alternative carriers and long distance
  resellers as its primary "wholesale" customers.  In addition, the Company
  plans to target high-volume corporate and business customers in selected
  international markets. The Company intends to market its services to these
  customers through its expanding organization of direct sales personnel,
  distributors and agents.  In each market that it enters, the Company strives
  to select the combination of direct sales and distribution that most
  effectively provides uniform service quality, maximum customer retention,
  reduced market entry cost and local market expertise.

  OFFER "VALUE-ADDED" PRODUCTS AND SERVICES FOR SELECTED NICHE MARKETS - In the
  United States, the Company intends to develop value-added products such as
  prepaid calling cards, targeted primarily at ethnic consumers.  The Company
  plans to utilize concentrations of international traffic to selected
  international markets (i.e. Mexico, Dominican Republic) generated by these
  domestic U.S. marketing programs to negotiate volume discounts to these
  markets. Internationally, the Company intends to take advantage of early
  market entry opportunities to develop products and services including prepaid
  calling cards, debit cards and other international long distance services.
  The Company plans to sell these products through distributors, sales agents
  and other alternative sales channels that have demonstrated their ability to
  (i) generate high sales volumes and (ii) implement rigorous loss prevention
  controls.  The Company also intends to develop certain "value-added" or
  "premium" services for carriers and long distance resellers including
  international private lines, international operator assistance and disaster
  recovery services.

  LEVERAGE STRATEGIC ALLIANCES AND BUSINESS RELATIONSHIPS TO EFFICIENTLY EXPAND
  SCOPE OF NETWORK AND PRODUCTS - The Company plans to continue to develop
  network access agreements, operating agreements, co-location agreements,
  interconnect agreements, origination/termination agreements and other network
  or facilities-sharing agreements in order (i) to extend its service reach to
  markets and customer bases not yet directly served by the Company's On-Net
  capabilities and (ii) to continually reduce the Company's operating costs for
  Off-Net origination, transmission and termination.   To date, the Company has
  entered into (i) an International Strategic Agreement with EQUANT, operator
  of one of the world's largest telecommunications networks and (ii) an
  Interconnection Agreement with PTT Telecom, the national telephone company of
  The Netherlands.  These relationships provide the Company with lower cost
  transport services in areas where it has not yet deployed its own network
  infrastructure, the ability to physically interconnect the Company's network
  to worldwide private and public switched networks and the ability to install
  the Company's network equipment in close proximity to the network equipment
  of other carriers. These business relationships may also enable the Company
  to efficiently offer a complete, global service solution to carriers and
  corporate customers with wide ranging service requirements.

  DEVELOP NEW ROUTES TO AND FROM KEY MARKETS - The Company believes that one of
  the most effective means to capture market share in the overall international
  telecommunications marketplace is to develop proprietary routes to strategic
  markets.  These new routes can be based on either (i) proprietary circuits
  and international private lines leased or otherwise contracted for by the
  Company or (ii) strategic relationships with owners or operators of
  proprietary circuits. The Company continues to negotiate with carriers and
  with licensed local partners in key markets in order to achieve a combination
  of low rates, consistent and cost effective local access and high quality
  connectivity that will enable it to introduce an alternative least cost route
  to and from a key market.

  INCREASE OWNERSHIP IN UNDERSEA FIBER OPTIC CABLES - In order to better
  control its operating costs and quality assurance for long distance services
  between North America, Europe, Latin America and Asia-Pacific, the Company
  intends to expand its capacity on undersea fiber optic cables.  The Company
  has committed to purchase STM-1 capacity on AC-1.  The Company intends to
  increase ownership on one or more trans-Pacific cables and on cables
  providing connectivity between the United States and the Caribbean based on
  (i) customer demand, (ii) market rates and (iii) current and projected
  capacity constraints.

  UTILIZE NEW TRANSMISSION TECHNOLOGIES SUCH AS IP TO REDUCE COSTS AND ENTER
  NEW MARKETS   Another of the Company's strategic objectives is to
  aggressively develop a strong mix of network products and transport
  capabilities utilizing the most efficient and highest quality mix of
  traditional voice services and emerging digital voice technologies,
  specifically voice over frame relay and voice over IP.  Packet switched data
  transmission technologies, (specifically frame relay, IP and ATM) are
  increasingly utilized to transmit voice traffic at significantly lower cost
  than traditional, circuit- switched analog networks. The Company's strategy
  is to use these emerging technologies to (i) reduce its cost basis for
  international voice transport, (ii) support the sale of traditional voice
  services, (iii) lower its costs of access, (iv) generate additional revenue
  streams and (v) enter new markets.  The Company will seek to develop and
  deploy emerging digital voice technologies in its network while maintaining a
  core network of traditional voice transport capability.

  Pursue Additional Strategic Acquisitions - The Company plans to continue to
  identify and negotiate strategic acquisitions that provide the Company with
  one or more of the following: (i) strategic network facilities or other
  valuable telecommunications assets, (ii) licenses, interconnection
  agreements, and/or operating agreements in key markets, (iii) proprietary
  circuits or IRUs, (iv) large customer bases in key markets, (v) experienced
  management personnel or (vi) business strategies or products that complement
  those of  the Company.

  DESCRIPTION OF BUSINESS

  The Company offers international long distance services over its own network
  and over the networks of other carriers through interconnection agreements,
  facilities-sharing agreements, carrier services agreements and strategic
  agreements and alliances.   Through its own network deployment and these
  various network access and termination agreements, the Company has the
  ability to provide seamless international long distance services at
  competitive rates to nearly every country in the world. Whenever possible,
  the Company transports its wholesale international traffic On Net over its
  own network facilities or over other networks that provide the Company with a
  similar On Net pricing structure.

  Through strategic network deployment and international strategic agreements
  (i.e. EQUANT), which provide the Company with a low cost structure for
  international transport, the Company is developing highly competitive,
  proprietary routes to a growing number of key international markets.  In
  other markets, the Company is able to achieve a competitive cost structure
  (i) through volume discounts from other carriers or (ii) by exchanging
  network and transmission capacity on an "at-cost" basis with other carriers
  with cost advantages to markets where the Company has not yet developed its
  own facilities.

  The Company primarily provides international long distance services on a
  "wholesale" basis to other carriers and telecommunications service providers
  and to high-volume marketers of long distance services.  In addition, the
  Company provides "retail" international and domestic long distance services
  in certain markets to corporations, businesses and individuals, marketed
  through international distributors.  The Company has also developed the
  ability to offer a suite of enhanced, value-added services to carriers and
  other marketers of long distance services including international calling
  cards, operator services and international call reorigination.

  During 1997 and the first three months of 1998, the Company, through its
  wholly-owned operating subsidiaries in the U.S and Europe, has concentrated
  its efforts on the following network development and business development
  activities in its targeted markets:

  United States  - The Company's network infrastructure in the United States
  has been developed to provide international gateway switches serving Europe,
  Asia-Pacific and Latin America, and access and termination agreements that
  provide the Company with cost effective origination and termination services
  throughout the United States. The Company is deploying an international
  gateway switch in New York.  The Company may deploy one or more additional
  international gateway switches in the United States if, by doing so, the
  Company is able to significantly reduce its operating costs and thereby
  increase margins on international traffic originated, terminated or transited
  through the United States.  The Company's U.S. network infrastructure also
  includes a switching center, a calling card services platform and
  international operator services center in Omaha, Nebraska (See "MANAGEMENT'S
  DISCUSSION AND ANALYSIS OF OPERATIONS   TNC ACQUISITION").   The value-added
  services provided by the Company from its enhanced services platform in Omaha
  enable the Company to offer carriers, corporations and international
  distributors a suite of products in addition to international transport or
  termination.  From its Omaha switching center, the Company is able to provide
  U.S. dial tone for international callers, thus enabling international callers
  to access lower cost, higher quality circuits than if the caller had used
  direct dial services from their local carrier or national carrier.

  Europe -The Company has commenced operations in Europe by entering The
  Netherlands telecommunications market through the installation of an
  international gateway switch and the deployment of Cisco/Stratacom ATM
  network nodes in Amsterdam, Utrecht, The Hague and Rotterdam.  The Company's
  switches and ATM nodes are linked via a nationwide fiber optic network.  In
  addition, WorldPort Europe, the Company's wholly-owned operating subsidiary
  in The Netherlands, has entered into an interconnection agreement with PTT
  Telecom, the national telephone company of The Netherlands.  This
  interconnection agreement provides the Company with competitive origination
  and termination throughout The Netherlands. In the United Kingdom, the
  Company's wholly-owned operating subsidiary, WorldPort Communications, Ltd.
  ("WORLDPORT U.K.") has agreed to acquire an ISR and intends to file an
  application for an IFL.

  LATIN AMERICA AND CARIBBEAN - The Company has entered into carrier services
  agreements that will enable it to provide long distance services to and from
  the United States, Mexico and the Dominican Republic.   These carrier
  services agreements will provide the Company with an opportunity to provide
  origination and termination services to carriers, resellers and to
  distributors of calling cards and other enhanced services.

  ASIA-PACIFIC - During the first quarter of 1998, the Company entered into a
  definitive agreement to acquire the telecommunications assets and operations
  of ICX, which, upon closing of the acquisition in early April, will extend
  its network and sales reach to Asia-Pacific.   ICX operates a trans-Pacific
  leased circuit and a node located in a major Asian market.  The Company
  believes that this network will provide it with additional least cost routing
  alternatives to points throughout Asia-Pacific.  See "SUBSEQUENT EVENTS".

  Trans-Atlantic Fiber Optic Capacity - The Company has committed to purchase
  an IRU on a trans-Atlantic fiber optic cable. The Company will own STM-1
  capacity on the AC-1 cable, which will link the U.S. and the United Kingdom
  beginning in mid-1998.  Extensions of the AC-1 cable to The Netherlands and
  Germany are expected by 1999.  By the year 2000, the Company expects to own
  undersea fiber optic cable capacity linking North America, Europe, Latin
  America and Asia-Pacific.    The Company intends to (i) utilize this capacity
  for its own On-Net traffic, (ii) market excess capacity to other carriers and
  (iii) leverage the capacity into additional cost-based network reach through
  its existing and future facilities-sharing agreements.

  Interconnection, Termination, Network Services and Other Strategic Agreements
  - The Company has entered into a number of interconnection, termination and
  other network services agreements that broaden the Company's Off-Net reach in
  markets where it has not yet deployed its own network facilities. The Company
  plans to utilize the following major agreements to provide seamless
  international long distance services in the United States and to nearly every
  country in the world:

     International Strategic Agreement with EQUANT Network Services, Inc.
     In September 1997, the Company entered into an international strategic
     agreement with EQUANT Network Services, Inc.  EQUANT is the commercial
     operator of one of the world's largest telecommunications networks, with
     geographic reach into 225 countries worldwide.

     Agreement with ProTel S.A. de C.V. (Mexico)
     The Company has an agreement with ProTel, S.A. de C.V., one of the twelve
     currently licensed Mexican long distance carriers, which provides the
     Company with national and international long distance services for calls
     originated within Mexico.

     Agreement with All American Cables & Radio, Inc. (Dominican Republic)
     The Company has an agreement with All American Cables & Radio, Inc., one of
     the three international long distance network operators in the Dominican
     Republic.  This agreement provides the Company with competitively priced
     termination of international long distance calls destined for the Dominican
     Republic.

     Agreement with Unisource (Netherlands and Other European Countries)
     Through its subsidiary, WorldPort Europe (Netherlands), the Company has an
     agreement with Unisource for the provision of virtual private network
     services.

     Agreement with N.V. Casema (Netherlands)
     The Company has a fiber optic network transport agreement with N.V. Casema,
     The Netherlands' national cable television operator.  The Company utilizes
     the Casema network to link its Netherlands switching and ATM network
     equipment and to provide switching and high bandwidth services within The
     Netherlands.

     Interconnection Agreement with PTT Telecom (Netherlands)
     The Company has an interconnection agreement with PTT Telecom, the national
     telephone company of The Netherlands, which enables the Company to
     originate and terminate calls on a competitive basis via PTT Telecom's
     nationwide telecommunications infrastructure.

  TARGET MARKETS AND CUSTOMERS

  By focusing on selected markets in Western Europe, Latin America and Asia-
  Pacific where it can install network facilities and establish proprietary
  circuits, the Company believes that it is able to (i) better control its
  operating costs, (ii) maintain consistent and high transmission qualities and
  (iii) clearly establish the Company as a long-term participant in markets
  that should continue to exhibit rapid growth. The Company has focused its
  business development and acquisition strategies on the following target
  markets:

       o  European-Originated Long Distance Traffic to the U.S. and Latin
          America   Based on statistics published by Telegeography 1997/1998,
          the Company estimates that this market will reach a total of 2.9
          billion minutes in 1998.   The Company intends to generate revenues in
          this market through carrier sales contracts and agreements entered
          into with emerging alternative carriers and service providers in
          deregulating European markets.  The Company also intends to provide
          calling card services to distributors within Europe.  In addition, the
          Company anticipates that it will generate revenues from Internet-
          related traffic between Europe and the United States over its trans-
          Atlantic fiber optic cable.

       o  Intra-European Long Distance Traffic - Based on statistics published
          by Telegeography 1997/1998, the Company estimates that this market
          will reach a total of 28 billion minutes in 1998.   The Company
          intends to generate revenues in this market through sales contracts
          and agreements entered into with emerging alternative carriers and
          service providers in deregulating European markets, including wireless
          service providers, resellers and intra-European network operators. The
          Company intends to also generate significant revenues in this market
          through calling card services marketed within Europe through various
          distribution channels.

       o  U.S. - Originated Long Distance Traffic to Western Europe, Mexico, the
          Caribbean and other Latin American Destinations - Based on statistics
          published by Telegeography 1997/1998, the Company estimates that this
          market will reach a total of 11 billion minutes in 1998.   The Company
          will seek to generate revenues in this market through carrier sales
          contracts and agreements entered into with long distance carriers,
          local exchange carriers ("LECS"), CLECs, wireless services providers,
          long distance resellers and other service providers.

       o  U.S.-to-Mexico, Intra-Mexico and Mexico-to-U.S. Long Distance Traffic
          - Based on statistics published by Telegeography 1997/1998, the
          Company estimates that this market will reach a combined total of over
          14 billion minutes of long distance traffic in 1998.  The Company will
          seek to generate revenues in this market initially through calling
          card services.  The Company will provide calling card services to
          distributors marketing proprietary prepaid calling cards in the U.S.
          in areas with high concentrations of Hispanic-Americans.  The Company
          will also provide calling card services within Mexico through one or
          more distribution agreements with marketing partners in Mexico.

       o  Enhanced and Value-Added Services Provided to Other Carriers,
          Marketers and International Distributors The Company intends to
          continue to provide calling card services and other value-added
          services such as multi-lingual operator services to carriers, other
          telecommunication service providers and to marketers and global
          distributors of calling cards.

       o  Major Global Corporate Clients   The Company, through its global
          network facilities and its various agreements and global business
          relationships, believes that it has the ability to provide
          multinational corporations with an integrated solution to their
          worldwide telecommunications requirements.

  The Company has targeted Tier I and Tier II U.S. long distance carriers,
  foreign PTTs, internationally focused long distance resellers and other high-
  volume marketers of long distance services as its primary wholesale
  customers.  Other facilities-based carriers may utilize the Company's network
  services for carrying overflow traffic from their own networks or to take
  advantage of least cost routing to markets where the Company has developed a
  distinct price or service quality advantage.  In addition to carriers that
  operate their own international networks, the Company plans to provide
  international long distance services to U.S. and international switch-based
  and switchless resellers who will utilize the Company's international long
  distance services to provide high quality international services to their
  wholesale or retail customers.

  Through international distributors, the Company provides international and
  domestic long distance services to end-user customers in the United States,
  Europe, Latin America and Asia-Pacific.  Calling card and other enhanced
  services customers can access the Company's network for domestic or
  international long distance services in a number of ways including (i)
  dialing a local access number, (ii) utilizing an automated dialing device or
  (iii) dialing a domestic or international toll-free number. In all cases, the
  Company's network of switches and routers selects the most efficient, least
  cost route and transports the call to a local service provider for
  termination.  The Company anticipates that during 1998, it will develop the
  capability in the United States to provide its business and residential
  retail customers with the ability to pre-select the Company as their primary
  long distance service provider.   The Company also intends to introduce this
  service as soon as possible in international markets.

  The Market Opportunity

  In 1996, the international long distance market accounted for $61 billion in
  revenues and 70 billion minutes of use according to Telegeography 1997/1998.
  International long distance revenues are projected to exceed $80 billion by
  the year 2000 based on an estimate of over 100 billion minutes of
  international long distance traffic. According to the International
  Telecommunications Union ("ITU"), the total global telecommunications
  services market is expected to represent $900 billion in revenues in the year
  2000.

  The Company is aggressively entering the global long distance market to take
  advantage of a tremendous growth opportunity created by the concurrence of
  these major growth factors:

  o  DEREGULATION - Countries worldwide have recognized the rapid infrastructure
     development and increased economic growth generated by telecommunications
     market deregulation, and they are moving to open their markets, privatize
     their national operators and create regulatory structures that enhance
     competition.  On January 1, 1998, two major multinational organizations,
     the European Union and the World Trade Organization, enacted legislation
     through which 69 of their members began deregulating their national
     telecommunications markets, permitting free competition by new entrants in
     formerly monopolized markets, allowing foreign investment in
     telecommunications infrastructure and initiating legislation requiring
     incumbent carriers to provide access to their national networks to all
     carriers on an equal and competitive basis.

  o  WORLDWIDE SUBSCRIBER GROWTH - The number of wireline and wireless
     subscriber lines is growing rapidly throughout the world.   According to
     Telegeography and the ITU, the number of fixed (wired) main lines worldwide
     is expected to grow by over 100 million new lines between 1997 and 2000, to
     over 900 million fixed main lines worldwide.  Many of these new lines will
     be installed in developing nations.  In countries with extensive wired-
     switched public networks, wireless technologies are increasing the number
     of total lines on the public switched network.  The ITU estimates that
     mobile subscribers will more than double between 1996 and 2000, to over 325
     million wireless lines worldwide.   As an estimated 50% of the world's
     population has never made a telephone call, this growth is expected to
     increase well beyond 2000.

  o  NEW COMMUNICATION DEVICES - New telecommunications applications such as
     Internet electronic mail, commerce, voice and video communication, as well
     as the proliferation of calling services such as voice mail and automated
     customer service, are forcing millions of people to make telecommunications
     a part of their daily lives.  Rapidly expanding software and computer chip
     capabilities that create multimedia communications applications are also
     dramatically increasing the amount of information that each person
     transmits over the telecommunications infrastructure, thereby further
     increasing the demand for bandwidth on the global telecommunications
     network.

  o  THE INTERNET - The Internet is driving worldwide telecommunications growth
     both as an end-user application (i.e. electronic mail, online services, the
     World Wide Web, etc.) and through breakthroughs in the quality of voice
     over IP technologies, as a viable low cost transmission alternative for
     domestic and international long distance services.

  o  NEW INTERNATIONAL PRICING STRUCTURES   The Company believes that the
     emergence of "market" or "cost based" international rate structures between
     certain international markets creates an opportunity for it to compete with
     major incumbent carriers based on network efficiency and other competitive
     factors due to the weakening, in many of these markets, of the so-called
     "accounting rate" structure for determining the cost of an international
     call based on semi-exclusive operating agreements among government-
     sponsored (monopoly) PTTs and a small group of international carriers (i.e.
     AT&T, MCI and Sprint).

  o  THE GLOBAL ECONOMY   The Company believes that continued globalization and
     integration of the world economy is creating demand for increased
     telecommunications access and higher transmission quality in developing
     economies in Eastern Europe, Latin America, Asia-Pacific and Africa.

  o  MULTIMEDIA APPLICATIONS INCREASE DEMAND FOR BANDWIDTH   The Company also
     believes that rapidly expanding bandwidth requirements for high capacity
     "dedicated" and "on-demand" domestic and international circuits as a result
     of the increased transmission of video, graphics, sound and other
     multimedia communications creates additional growth opportunity in the
     telecommunications market.

  Above all, deregulation of telecommunications markets worldwide creates a
  never before opportunity for an emerging carrier such as the Company to enter
  and compete effectively in markets on a global basis.   The experience of the
  United States and other countries that have opened their telecommunications
  markets to competition suggests that new market entrants such as the Company
  have an opportunity to rapidly capture market share through competitive
  pricing, high quality, customer focused operations and product
  differentiation.   In the United States, new entrant carriers including
  MCI/WorldCom, Sprint and hundreds of smaller carriers have captured 50% of
  the former dominant carrier, AT&T's, international market share.  In the
  U.K., British Telecom's market share of outbound international long distance
  has declined to 60% in 1996 from 95% in 1988.  In Chile, whose market opened
  to competition in December 1994, new entrants now control over 60% of
  outbound international long distance markets.

  Competition

  The international and national telecommunications markets in which the
  Company operates are highly competitive.  In the United States, the Company
  competes against a wide variety of market participants ranging from dominant
  Tier I carriers (AT&T, MCI/WorldCom, and Sprint), large Tier II facilities-
  based carriers, switched and switchless resellers of long distance services
  and hundreds of other marketers and distributors of long distance, calling
  card and other telecommunications services.   In foreign markets, the Company
  will compete with dominant national telephone companies, former monopolies
  and other major incumbent carriers.  In addition, the Company will compete
  with other U.S. and international carriers attempting to enter these markets
  and with local resellers and marketers of long distance services.

  In the U.S. and in every foreign market where it operates, the Company will
  face competition from companies with resources greater than that of the
  Company and with longer operating histories in the local market than the
  Company. To compete effectively, the Company must do so on the basis of
  factors such as: (i) network design and costs, (ii) effective utilization of
  emerging technologies, (iii) competitive pricing and rates, (iv) quality of
  service, (v) ease and convenience of access, (vi) customer service and
  support, (vii) quality of local distributors and sales agents, (viii)
  understanding of the marketplace, (ix) ability to attract and retain
  qualified employees and (x) customer acquisition and retention.

  Acquisitions

  During 1997, the Company acquired substantially all of the telecommunications
  assets and operations of Telenational Communications Limited Partnership
  ("TNC") and completed a merger of The Wallace Wade Company ("WWC") into a
  wholly-owned subsidiary of the Company.  See "MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF OPERATIONS   ACQUISITIONS".

  Organization

  The Company, previously known as Sage Resources, Inc., was originally
  organized as a Colorado corporation on January 6, 1989, to evaluate,
  structure and complete a merger with, or acquisition of other entities.  In
  October 1996, the Company changed its domicile to Delaware and changed its
  name to WorldPort Communications, Inc.

  Employees

  As of March 30, 1998, the Company had approximately 70 employees of which 55
  were full time employees.  None of the Company's employees is subject to a
  collective bargaining agreement.  The Company believes that its relationship
  with its employees is satisfactory.


  ITEM 2.  DESCRIPTION OF PROPERTY

  The Company's principal offices are located in approximately 6,000 square
  feet of space in Houston, Texas leased pursuant to an agreement which expires
  in April 2000.  The Company also leases approximately 11,000 square feet in
  Omaha, Nebraska for its operating center pursuant to an agreement which
  expires in June 2001.

  The Company owns telecommunications switching and peripheral equipment
  located in various sites in the United States and Europe.  Certain of the
  property and equipment of the Company is subject to liens securing payment of
  portions of its indebtedness.  See Note 5 of Notes to Consolidated Financial
  Statements for information with respect to lien and lease obligations on
  these properties.

  The Company believes that its property and equipment are well maintained and
  adequate to support its current needs, although substantial investments are
  expected to be made in additional property and equipment for expansion and in
  connection with corporate development activities.  See "OVERVIEW",
  "STRATEGY", DESCRIPTION OF BUSINESS" AND "LIQUIDITY AND CAPITAL RESOURCES".


  ITEM 3.  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
  consolidated financial statements or results of operations of the Company.


  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  No matter was submitted during the fourth quarter of the year ended December
  31,1997 to a vote of shareholders of the Company, through the solicitation of
  proxies or otherwise.


                                      PART II


  ITEM 5.  MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

  (a)  Market Information  - The Company's common stock is traded on the OTC
       Bulletin Board.  Trading in the Company's common stock commenced on June
       17, 1997.  The table below sets forth by fiscal quarter, from the date
       stock commenced trading through the end of the fiscal year ended
       December 31, 1997, the high and low bid prices for the Company's common
       stock on the OTC Bulletin Board, as reported by Prophet Information
       Services, Inc.  These prices reflect inter-dealer prices, without retail
       mark-up, mark-down or commission and may not represent actual
       transactions.

  <TABLE>
  <CAPTION>
                                                                                        1997
                                                                                  High          Low

                                    <S>                                          <C>         <C>
                                    Second Quarter (from June 17, 1997)          $ 3-5/8     $  2
                                    Third Quarter                                $ 4-3/4     $  3-1/4
                                    Fourth Quarter                               $ 7-3/8     $  4-1/2
    </TABLE>

  (b)  Holders  - The number of holders of record of the Company's common stock
       as of March 30, 1998 was 107. This does not include shareholders who
       hold stock in nominee or street name.  As of March 30, 1998, 17,383,333
       shares of the Company's common stock were issued and outstanding.

  (c)  Dividend Policy - The Company has not declared or paid cash dividends on
       its common stock.  The Company currently intends to retain any future
       earnings to finance the growth and development of its business and
       therefore does not anticipate paying cash dividends in the foreseeable
       future.  Any future determination to pay cash dividends will be made by
       the Board of Directors in light of the Company's earnings, financial
       position, capital requirements and such other factors as the Board of
       Directors deems relevant.  Payment of any dividends on the Company's
       common stock is restricted until such time as all dividends associated
       with the Company's Series A Preferred Stock and Series B Convertible
       Preferred Stock have been paid.

  The following securities have been issued or sold without registration under
  the Securities Act of 1933, as amended, (the "SECURITIES ACT") during the
  past three fiscal years.  Each of the offers and sales or issuances described
  below were to "accredited investors" as defined in Regulation D promulgated
  under the Securities Act and were exempt under Section 4(2) of the Securities
  Act:

  On June 26, 1996 Maroon Bells Capital Partners, Inc. ("MBCP"), its principals
  and certain non-affiliated investors entered into a stock purchase agreement
  to purchase newly-issued shares of the Company's common stock representing
  approximately 98.5% of the outstanding shares of the Company as of the date
  of the Agreement for $110,000 in cash. See "CERTAIN RELATIONSHIPS AND RELATED
  TRANSACTIONS".

  On October 15, 1996, the Company issued 1,000,000 shares of common stock to
  two non-affiliated offshore entities in payment of a promissory note in the
  amount of $80,000.  See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".

  On March 7, 1997, the Company issued 1,680,000 shares of common stock to MBCP
  in payment of a promissory note in the amount of $420,000.  See "CERTAIN
  RELATIONSHIPS AND RELATED TRANSACTIONS".

  In March 1997, the Company closed a private placement offering of 3,333,333
  shares of its common stock (the "OFFERING") at $0.75 per share pursuant to an
  offering memorandum dated November 1, 1996.  The Company received gross
  proceeds of $2.5 million from the Offering, of which, approximately $2.4
  million was received as of December 31, 1996.  The Company paid approximately
  $100,000 in offering costs related to the Offering.

  In June 1997, the Company issued 3,750,000 shares of common stock in
  connection with the acquisition of the assets and operations of TNC.  See
  "MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS - ACQUISITIONS".

  In July 1997, the Company issued 1,400,000 shares of common stock in
  connection with the acquisition of WWC.  See "MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF OPERATIONS - ACQUISITIONS".

  In November 1997, the Company closed a private placement offering of its
  Series A Preferred Stock (the "SERIES A PREFERRED STOCK OFFERING") at $2.25
  per share pursuant to an offering memorandum dated May 8, 1997. The Company
  received gross proceeds of approximately $1.1 million from the Series A
  Preferred Stock Offering in exchange for 493,889 shares of Series A Preferred
  Stock and paid approximately $114,000 in offering expenses in connection with
  the offering.  Holders of Series A Preferred Stock are 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.  The Series A Preferred Stock
  is convertible into an equal number of shares of common stock at any time, at
  the option of the holder, and is convertible by the Company upon the
  occurrence of certain events.  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.

  During the first quarter of 1998, the Company initiated a private placement
  offering of its Series B Convertible Preferred Stock (the "SERIES B PREFERRED
  STOCK OFFERING") at $5.36 per share.  The Series B Convertible Preferred
  Stock is convertible into shares of the Company's common stock at any time at
  the option of the holder at a rate of 4 shares of common stock for each share
  of preferred stock.  Holders of Series B Convertible Preferred Stock have
  voting rights equal to 40 votes per share on all matters submitted to a vote
  of the stockholders of the Company.  No public market exists for the
  Company's Series B Convertible Preferred Stock and none is expected to
  develop as a result of the Series B Preferred Stock Offering.  As of March
  30, 1998, the Company has received approximately $10.1 million in proceeds
  from the sale of the Series B Convertible Preferred Stock and has converted
  approximately $1.2 million of notes payable and accrued interest into the
  Series B Convertible Preferred Stock in exchange for 2,112,106 shares of the
  Company's Series B Convertible Preferred Stock.  The Company is continuing to
  offer its Series B Preferred Stock to accredited investors.  See "SUBSEQUENT
  EVENTS" AND "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".


  ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

  Overview

  The Company is a global facilities-based telecommunications services provider
  offering a full range of voice and value-added services to carriers and
  corporate customers worldwide.  The Company is focusing on expanding its
  network infrastructure in targeted geographic regions where privatization and
  liberalization enable it to gain early market entry and achieve rapid growth.
  The Company is developing a global telecommunications network consisting of
  (i) switches, enhanced services platforms, leased circuits and other
  telecommunications equipment (On-Net) and (ii) carrier services agreements,
  access and termination agreements, interconnection agreements and other
  facilities-sharing agreements (Off-Net).  Together, these telecommunications
  assets and agreements comprise the Company's global network.   The Company's
  customers utilize a combination of local access numbers and codes and
  domestic and international toll-free numbers to access the Company's network.
  The Company is continuing to expand its network through (i) the purchase and
  installation of equipment for existing and new markets, (ii) additional
  interconnection, access and termination agreements with other carriers and
  service providers in the U.S. and internationally and (iii) through
  additional acquisitions of international telecommunications assets,
  operations and service providers.

  During 1997, the Company primarily provided calling card and other enhanced
  services products from its facility in Omaha, Nebraska (see "TNC
  ACQUISITION").  As the Company expands its global network and enters into new
  international service agreements, the Company intends to provide long
  distance services primarily to carriers, corporate customers and to
  distributors, marketers and resellers of telecommunications services.  For
  products and services such as dedicated international circuits, the Company's
  customers will typically pay a flat monthly fee based on the amount of
  bandwidth purchased, the distance of the transport required and other
  factors.  Such services are typically invoiced on a monthly basis. For
  switched domestic and international services, the Company will create
  invoices based on detailed call records created by the Company's switches.
  Switched minute customers are typically billed on a weekly, semi-monthly or
  monthly basis. The Company also offers calling card and other long distance
  services, which can be (i) prepaid in advance by the Company's customers,
  (ii) invoiced to the customer for payment or (iii) paid for by regular debits
  by the Company from the customer's credit card or bank draft accounts.   In
  some cases, the Company requires customers to post deposits, letters of
  credit or other financial instruments in order to reduce the Company's
  exposure to bad debts and non-payment.  Similarly, the Company is billed
  either on a flat fee basis or on a per-minute basis by its underlying carrier
  vendors, based on the type of services required by the Company from the
  particular vendor.

  The Company operates through a number of wholly-owned operating subsidiaries
  that its has established in the United States and Europe to acquire
  telecommunications assets and operations.  The acquisitions completed by the
  Company during 1997 are described below.

  Acquisitions

  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 an 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 consolidated 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 1,250,000 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.

  On July 3, 1997, the Company merged WWC into a wholly-owned subsidiary of the
  Company pursuant to an 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.  The Company's former President
  and Chief Executive Officer was the sole shareholder of WWC.

  In connection with the WWC Acquisition, the Company delivered (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 in cash and (iii) a promissory note in the
  amount of $175,000.

  WWC's operating revenues and expenses did not have a material impact on the
  operating revenues and expenses of the Company in fiscal 1997.

  The Company valued the stock issued in connection with the TNC Acquisition
  and the WWC Acquisition based on the price received by the Company in
  connection with its private placement of common stock which closed in March
  1997.

  Results of Operations

  Prior to its acquisition of the assets and ongoing operations of TNC, the
  Company was a development stage company that had not generated revenues other
  than interest income since inception. In 1997 the Company incurred losses of
  $(3,492,767) compared to $(259,898) in 1996.  Included in the losses incurred
  during 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.  Subsequent to the closing of the TNC Acquisition, revenues
  from the operations declined, primarily as a result of the Company's shift in
  focus toward higher-margin product lines in new international markets.

  To address and remedy these historical operating losses and to increase the
  competitiveness, revenues and gross margins of the assets and operations
  acquired in the TNC Acquisition, over the past six months, the Company has
  sought to (i) institute new financial controls, (ii) enhance the technical
  capabilities of its switching center, calling card platform and operator
  services center in Omaha, (iii) negotiate more favorable carrier vendor
  contracts, (iv) recruit additional qualified operational and technical
  management for its Omaha facility, (v) develop new calling card distribution
  channels in ethnic markets in the U.S. and in new international markets such
  as Mexico and (vi) develop new products and services such as multi-lingual
  operator services targeted at carrier customers.    While the Company
  believes these cost-reduction and revenue-enhancing initiatives will have a
  positive impact on its future operating results, the Company anticipates that
  it will continue to incur operating losses and cash flow deficiencies for the
  foreseeable future. See "LIQUIDITY AND CAPITAL RESOURCES".

  Revenues

  Revenues increased to $2,777,575 from $0 for the years ended December 31,
  1997 and 1996, respectively.  The increase in revenues was due solely to the
  inclusion of the results of operations of the TNC assets subsequent to the
  closing of the TNC Acquisition on June 20, 1997.

  Gross Margin

  Gross margin increased to $171,599 from $0 for the years ended December 31,
  1997 and 1996, respectively.  The increase in gross margin was due solely to
  the inclusion of the results of operations of the TNC assets subsequent to
  the closing of the TNC Acquisition on June 20, 1997.

  Selling, General and Administrative Expenses

  Selling, general and administrative expenses increased to $2,723,577 from
  $270,591 for the years ended December 31, 1997 and 1996, respectively.  The
  increase was due to primarily 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 associated with the operation of the TNC assets
  subsequent to the closing of the TNC Acquisition on June 20, 1997.

  Depreciation and Amortization

  Depreciation and amortization expense increased to $818,939 from $0 for the
  years ended December 31, 1997 and 1996, respectively.  The increase was due
  to (i) depreciation on the assets acquired in connection with the TNC
  Acquisition, (ii) amortization of goodwill and other intangible assets
  associated with the TNC Acquisition and the WWC Acquisition and (iii)
  depreciation on additional switching and peripheral equipment acquired during
  1997.

  Other Income (Expense)

  Interest income increased to $65,028 from $34,399 for the years ended
  December 31, 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 during 1997, (ii) a note receivable from
  Com Tech International Corporation (the "COM TECH NOTE") which was paid in
  full during 1997 and (iii) a note receivable from TNC prior to the TNC
  Acquisition.

  Interest expense increased to $192,722 from $23,706 for the years ended
  December 31, 1997 and 1996, respectively. The increase in interest expense is
  due to (i) the debt assumed by the Company in connection with the TNC
  Acquisition, (ii) the acquisition of switching equipment subject to capital
  lease and (iii) borrowings pursuant to certain short-term promissory notes
  for working capital purposes. See "LIQUIDITY AND CAPITAL RESOURCES".

  Liquidity and Capital Resources

  The Company is an emerging international telecommunications service provider
  which is executing a global business plan which requires substantial capital.
  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 and
  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 debt and/or 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
  "SUBSEQUENT EVENTS".  See Notes 5,7 and 10 of Notes to Consolidated Financial
  Statements.

  As of December 31, 1997, the Company has a working capital deficit of
  $4,142,742 compared to a working capital surplus of $2,787,222 at December
  31, 1996.  The working capital deficit at December 31, 1997 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 a note payable in connection with the WWC Acquisition, (iii)
  the acquisition of additional switching and peripheral equipment, the
  majority of which is being financed pursuant to a lease, (iv) borrowings
  pursuant to certain short-term promissory notes and (v) the operating losses
  of the Company. Trade receivables increased to $368,848 at December 31, 1997
  from $0 at December 31, 1996 due to the TNC Acquisition.

  Operations used $2,904,692 during 1997 compared to $196,359 in 1996 due
  primarily to the (i) operating losses associated with the operation of the
  TNC assets subsequent to the TNC Acquisition (ii) increased business
  development and acquisition activity and (iii) the establishment and staffing
  of the Company's corporate offices.

  Investing activities used $700,715 during 1997 compared to $1,300,000 in
  1996.  Investing activities in 1997 consisted primarily of collection of the
  GSI Note and the Com Tech Note offset by (i) cash advances to TNC to fund
  working capital prior to the closing of the TNC Acquisition (ii) cash paid to
  WWC in connection with the closing of the WWC Acquisition and (iii) increased
  capital expenditures associated with the purchase of additional switching and
  peripheral equipment.  Investing activities in 1996 consisted of advances
  pursuant to the GSI Note and the Com Tech Note.

  Financing activities generated $2,231,849 during 1997 compared to $3,034,649
  during 1996.  Financing activities during 1997 consisted primarily of (i)
  payments on short-term debt and capital lease obligations assumed in
  connection with the TNC Acquisition, (ii) proceeds from the issuance of notes
  payable to related parties and (iii) proceeds from the issuance of 493,889
  shares of the Company's Series A Preferred Stock.  Financing activities
  during 1996 consisted of proceeds from the issuance of notes payable to
  related parties and the issuance of common stock.

  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. ("VALUE PARTNERS") 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.  The Company
  has made none of the scheduled payments on this note and as of March 30,
  1998, Value Partners has not demanded payment on the note.  The Company is
  currently negotiating with Value Partners to restructure this obligation on
  more favorable terms to the Company; however, no assurance can be given that
  the Company will be able to restructure these obligations.

  In connection with the WWC Acquisition, the Company was obligated to pay
  $75,000 cash at closing to its former President and Chief Executive Officer
  of which $52,500 has been paid as of December 31, 1997.  In addition to the
  cash paid at closing, the Company issued a promissory note in the amount of
  $175,000.  The Company is currently negotiating with its former President and
  Chief Executive Officer to restructure the remaining unpaid portion of the
  cash due as well as the unpaid payments on the promissory note which were due
  on October 1, 1997 and February 1, 1998. 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 of its
  affiliated 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 December 31, 1997, the Company had
  $1,556,250 in Bridge Notes outstanding.  During the first quarter of 1998,
  approximately $1.2 million of the Bridge Notes and accrued interest were
  converted into equity in the Company.  The remaining portion of the Bridge
  Notes were repaid in cash.  See "RELATED PARTY TRANSACTIONS" and "SUBSEQUENT
  EVENTS".

  In October 1997, the Company purchased approximately $3.6 million of network
  and switching equipment to be installed in various cities in the United
  States and Europe as part of its global network strategy.  The equipment was
  purchased pursuant to a lease financing facility with Forsythe.  The lease
  associated with this equipment calls for monthly payments in the amount of
  $121,701 for a period of 36 months commencing on March 1, 1998.  See
  "SUBSEQUENT EVENTS".

  On November 14, 1997, the Company closed a private placement offering of its
  Series A Preferred Stock.  The Company received total gross proceeds of
  $1,111,250 in exchange for 493,889 shares of the Company's Series A Preferred
  Stock. The Company paid $113,485 in offering costs in connection with the
  Series A Preferred Stock Offering.

  As described in "RECENT DEVELOPMENTS" and "DESCRIPTION OF BUSINESS", the
  Company has entered into a number of agreements, contracts and other business
  relationships which will require the Company to expend capital resources.  In
  the case of carrier services contracts and network access agreements, the
  impact on the Company's requirements for working capital and capital
  expenditures cannot be determined at this time, due to variables associated
  with the scope and timing of implementation of these contracts and
  agreements.   In other cases, such as the Company's multi-million dollar
  commitment to purchase STM-1 capacity on the AC-1 cable, the financial impact
  on the Company cannot be determined until such time as the Company has
  selected its method of financing for the purchase of the STM-1 on AC-1. These
  financing options include (i) obtaining vendor financing, (ii) obtaining
  third party financing or (iii) financing the purchase internally from the
  proceeds of future offerings by the Company.

  As described in "RECENT DEVELOPMENTS" and elsewhere herein, the Company has
  received approximately $10.1 million in proceeds from the sale of its Series
  B Convertible Preferred Stock.  In addition, Forsythe has recently increased
  the Company's lease financing facility to $13 million. These proceeds and
  financial resources, while significant, may be insufficient to enable the
  Company to meet its obligations pursuant to the business relationships as
  described in "RECENT DEVELOPMENTS" and elsewhere herein.  Further, the
  Company does not currently generate positive cash flow and will not do so
  until it has completed a significant portion of its global network
  development and has implemented its sales and marketing strategy.  As such,
  the Company believes that it will be required to seek additional financing in
  order to implement its business plan and to meet its obligations pursuant to
  the business relationships as described in "RECENT DEVELOPMENTS" and
  elsewhere herein.  Accordingly, the Company has recently signed an advisory
  agreement with a Wall Street investment-banking firm, pursuant to which the
  investment banker intends to advise the Company with regard to future
  financing options.

  Year 2000 Issue

  The Year 2000 issue exists because many computer systems and applications
  currently use two-digit fields to designate a year.  As the century date
  change occurs, date-sensitive systems will recognize the year 2000 as 1900 or
  not at all. The inability to recognize or properly treat the Year 2000 may
  cause systems to process critical financial and operational information
  incorrectly.  The Company's management has assessed the impact of the Year
  2000 issue on the Company's computer hardware and software systems.  Based on
  this assessment, management currently believes that the costs of resolving
  the Year 2000 issues will not be material to the Company's results of
  operations or financial condition.

  Subsequent Events

  During the first quarter of 1998, the Company initiated a private placement
  offering of its Series B Convertible Preferred Stock (the "SERIES B PREFERRED
  STOCK OFFERING") at $5.36 per share.  The Series B Convertible Preferred
  Stock is convertible into shares of the Company's common stock at any time at
  the option of the holder at a rate of 4 shares of common stock for each share
  of preferred stock.  Holders of Series B Convertible Preferred Stock have
  voting rights equal to 40 votes per share on all matters submitted to a vote
  of the stockholders of the Company.  As of March 30, 1998, the Company has
  received approximately $10.1 million in proceeds from the sale of the Series
  B Convertible Preferred Stock and has converted approximately $1.2 million of
  notes payable and accrued interest into the Series B Convertible Preferred
  Stock.  See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS".

  In February 1998, the Company commenced operations in The Netherlands through
  the acquisition of all of the outstanding stock of MathComp B.V.
  ("MATHCOMP").  The Company changed the name of MathComp to WorldPort
  Communications Europe, B. V. and commenced its operations in The Netherlands.
  In connection with this acquisition, the Company issued 150,000 shares of the
  Company's common stock and will pay $250,000 in cash, payable within 45 days
  of the closing of the acquisition.  The former shareholder of MathComp is
  eligible to earn an additional 2,350,000 shares of the Company's common stock
  contingent upon the attainment of certain future revenue and gross margin
  requirements during the first and second quarters of 1999.  In connection
  with the acquisition, the Company entered into a three-year employment
  agreement with the former shareholder of MathComp for an annual salary of
  approximately $90,000.

  In March 1998, the Company successfully negotiated an increase in its lease
  financing facility with Forsythe increasing the aggregate facility to
  $13,000,000.  In connection with the increase in the lease financing
  facility, the Company purchased additional switching equipment to be
  installed in New York and The Netherlands.

  On March 25, 1998, the Company entered into a definitive agreement for the
  acquisition of the telecommunications assets and operations of ICX, a
  licensed provider of international telecommunications services headquartered
  in the San Francisco Bay area in exchange for 400,000 shares of the Company's
  common stock (of which 200,000 shares will be held pursuant to an escrow
  agreement for a period of eighteen months following the closing subject to
  the attainment of certain future revenue requirements and to indemnify the
  Company for certain representations and warranties).  In addition, the
  Company will enter into two-year employment agreements with three employees
  of ICX providing for annual salaries of $84,000 and issue options to purchase
  120,000 shares of common stock at exercise prices ranging from $7.00 to
  $10.00 per share with a vesting period of one to two years.  The ICX
  acquisition is currently scheduled to close early in the second quarter of
  1998.



                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


  To the Board of Directors
  of WorldPort Communications, Inc.:

  We have audited the accompanying consolidated balance sheets of WorldPort
  Communications, Inc. and subsidiaries (a Delaware corporation), as of
  December 31, 1997 and 1996, and the related consolidated statements of
  operations, stockholders' equity and cash flows for the years then ended.
  These financial statements are the responsibility of the Company's
  management.  Our responsibility is to express an opinion on these financial
  statements based on our audits.

  We conducted our audits in accordance with generally accepted auditing
  standards.  Those standards require that we plan and perform the audit to
  obtain reasonable assurance about whether the financial statements are free
  of material misstatement.  An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and
  significant estimates made by management, as well as evaluating the overall
  financial statement presentation.  We believe that our audits provide a
  reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
  present fairly, in all material respects, the financial position of WorldPort
  Communications, Inc. and subsidiaries as of December 31, 1997 and 1996, and
  the results of their operations and their cash flows for the years then
  ended, in conformity with generally accepted accounting principles.

  The accompanying consolidated financial statements have been prepared
  assuming that the Company will continue as a going concern.  As discussed
  more fully in Note 1 to the consolidated financial statements, the Company is
  an emerging international telecommunications service provider which is
  attempting to execute a global business plan which requires substantial
  capital.  During 1997, the Company's first year of operations as an
  international telecommunications services provider, the Company incurred
  losses of approximately $3.5 million, expects to continue to incur operating
  losses in the near future, has an accumulated deficit of approximately $3.8
  million and a working capital deficit of approximately $4.1 million at
  December 31, 1997, all of which raises substantial doubt about the Company's
  ability to continue as a going concern.  Management's plans in regard to
  these matters, which include raising additional capital, are also described
  in Note 1.  During the first quarter of 1998, the Company has raised
  approximately $10.1 million in additional capital from the sale of its Series
  B Convertible Preferred Stock and was successful in increasing its existing
  lease financing facility to provide up to $13 million in infrastructure
  financing.  In addition, during the first quarter of 1998, the Company
  retained the services of a major New York-based investment banker to advise
  the Company with regard to future financing options.  The consolidated
  financial statements do not include any adjustments relating to the
  recoverability and classification of asset carrying amounts, including
  goodwill, or the amount and classification of liabilities that might result
  should the Company be unable to continue as a going concern.



  ARTHUR ANDERSEN LLP

  Houston, Texas
  March 30, 1998




  ITEM 7.  FINANCIAL STATEMENTS

  <TABLE>
                  WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
  <CAPTION>


                                                                   ASSETS
                                                                                                                December 31,
                                                                                                      1997                  1996


                 <S>                                                                               <C>                <C>
                 CURRENT ASSETS:
                      Cash                                                                         $      179,271      $ 1,552,829
                      Accounts receivable, net of allowance for doubtful accounts
                            of $14,610 and $0, respectively                                               368,848             -
                      Notes receivable                                                                       -           1,300,000
                      Prepaid expenses  and other current assets                                           67,438           34,135
                                     Total current assets                                                 615,557        2,886,964

                 PROPERTY AND EQUIPMENT, net                                                            5,031,858             -
                 OTHER ASSETS:
                      Goodwill, net                                                                     6,292,411             -
                      Other assets, net                                                                 1,257,451            2,068
                                     TOTAL ASSETS                                                     $13,197,277      $ 2,889,032

                                                    LIABILITIES AND STOCKHOLDERS' EQUITY

                 CURRENT LIABILITIES:
                      Accounts payable                                                                $1,391,519       $    99,742
                      Accrued expenses                                                                 1,292,261              -
                      Short-term note payable                                                            500,000              -
                      Current portion of notes payable   related parties                                 540,000              -
                      Current portion of obligations under capital leases                                936,992              -
                      Other current liabilities                                                           97,527              -

                                     Total current liabilities                                         4,758,299            99,742
                 NOTES PAYABLE   RELATED PARTIES, net of current portion                               1,191,250           420,000

                 LONG-TERM OBLIGATIONS UNDER CAPITAL LEASES, net of current portion                    3,005,894              -
                 OTHER LONG-TERM LIABILITIES                                                              86,584              -

                 COMMITMENTS AND CONTINGENCIES
                 STOCKHOLDERS' EQUITY
                      Undesignated preferred stock, $0.0001 par value, 9,250,000 shares
                         authorized,  no shares issued and outstanding                                      -                 -
                      Series A preferred stock, $0.0001 par value, 750,000 shares
                         authorized, 493,889 and no shares issued and outstanding in
                         1997 and 1996, respectively                                                          49              -
                      Common stock, $0.0001 par value, 65,000,000 shares authorized,
                         16,033,333 and 9,053,667 shares issued and outstanding, in
                         1997 and 1996, respectively                                                       1,603              905
                      Additional paid-in capital                                                       7,953,631        2,664,291
                      Accumulated deficit                                                             (3,800,033)        (295,906)

                                     Total stockholders' equity                                        4,155,250        2,369,290
                                     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $ 13,197,277      $ 2,889,032


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

  </TABLE>

  <TABLE>
                  WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
  <CAPTION>



                                                                                                 Year Ended
                                                                                                 December 31,
                                                                                            1997              1996

                       <S>                                                            <C>             <C>

                       REVENUES                                                       $  2,777,575   $        -


                       COST OF SERVICES                                                  2,605,976            -


                            Gross margin                                                   171,599            -

                       OPERATING EXPENSES:
                            Selling, general and
                               administrative expenses                                   2,723,577          270,591
                            Depreciation and amortization                                   818,939            -


                            Operating loss                                              (3,370,917)        (270,591)

                       OTHER INCOME (EXPENSE):
                            Interest income                                                 65,028           34,399
                            Interest expense                                              (192,722)         (23,706)
                            Other                                                             5,844            -

                                                                                          (121,850)          10,693

                       LOSS BEFORE PROVISION
                            FOR INCOME TAXES                                            (3,492,767)        (259,898)

                       PROVISION FOR INCOME TAXES                                          -                  -


                       NET LOSS                                                       $ (3,492,767)   $    (259,898)

                       NET LOSS PER SHARE,
                          BASIC AND DILUTED                                           $      (0.26)     $     (0.11)

                       SHARES USED IN NET LOSS PER SHARE
                           CALCULATION, BASIC AND DILUTED                               13,244,681        2,358,334


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

  </TABLE>



                  WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

  <TABLE>
  <CAPTION>
                                                                                            Additional      Accumulated
                                       Preferred Stock          Common Stock            Paid-in-Capital      Deficit     Total
                                       Shares    Amount       Shares     Amount
     <S>                               <C>        <C>         <C>           <C>          <C>             <C>            <C>

     Balance, December 31, 1995         -         $     -         60,000    $      6    $    50,541     $   (36,008)   $    14,539

     Issuance of common stock           -            -         4,000,000         400        109,281      -                 109,681

     Issuance of common stock
       in connection with exercise
       of stock options                 -           -            160,000          16          4,384      -                   4,400

     Issuance of common stock
       for services                     -            -           650,000          65         32,435      -                  32,500

     Issuance of common stock in
       connection with conversion of
       promissory note payable          -            -         1,000,000         100         79,900      -                  80,000

     Issuance of common stock           -           -          3,183,667        318       2,387,750      -               2,388,068

     Net loss                                -          -             -           -           -            (259,898)      (259,898)

     Balance, December 31, 1996         -           -           9,053,667        905      2,664,291        (295,906)     2,369,290

     Issuance of common stock,
       net of offering costs            -           -            149,666          15         10,167      -                  10,182

     Issuance of common stock in
       connection with conversion of
       promissory note payable           -          -          1,680,000         168        419,832      -                 420,000

     Issuance of common stock in
       connection with acquisitions     -           -          5,150,000         515      3,861,985      -               3,862,500

     Issuance of Series A preferred
       stock, net of offering costs     493,889          49    -             -              997,356      -                 997,405

     Dividends on Series A
       preferred stock                  -           -          -             -            -                (11,360)        (11,360)

     Net loss                           -           -          -             -            -             (3,492,767)     (3,492,767)

     Balance, December 31, 1997          493,889    $    49    16,033,333   $  1,603    $ 7,953,631     $(3,800,033)   $ 4,155,250



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

  </TABLE>

  <TABLE>
                  WORLDPORT COMMUNICATIONS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
  <CAPTION>

                                                                                                           Year Ended
                                                                                                          December 31,
                                                                                                      1997             1996

            <S>                                                                                    <C>              <C>
            CASH FLOWS FROM OPERATING ACTIVITIES:
            Net loss                                                                               $  (3,492,767)   $    (259,898)
            Adjustments to reconcile net loss to net cash
                 used by operating activities -
                      Depreciation and amortization                                                      818,939         -
                      Decrease in accounts receivable                                                    185,325         -
                      Increase in prepaid expenses and other assets                                     (624,106)         (34,135)
                      Increase in accounts payable and accrued
                           expenses and other liabilities
                                                                                                         207,917           97,674
                                Net cash used by operating activities                                 (2,904,692)        (196,359)

            CASH FLOWS FROM INVESTING ACTIVITIES:
                      Cash paid in connection with acquisitions                                       (1,229,941)       -
                      Change in notes receivable                                                       1,300,000       (1,300,000)
                      Capital expenditures                                                              (770,774)       -

                                Net cash used by investing activities                                   (700,715)      (1,300,000)

            CASH FLOWS FROM FINANCING ACTIVITIES:
                      Principal payments on short-term debt                                             (262,278)       -
                      Payments on obligations under capital leases                                       (69,710)       -
                      Proceeds from issuance of notes payable   related parties                        1,556,250          500,000
                      Proceeds from issuance of preferred stock, net of offering expenses                997,405        -
                      Proceeds from issuance of common stock, net of offering expenses
                                                                                                          10,182        2,534,649
                                Net cash provided by financing activities                              2,231,849        3,034,649

            NET (DECREASE) INCREASE IN CASH                                                           (1,373,558)       1,538,290

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

            CASH, end of the period                                                                $     179,271     $  1,552,829
            CASH PAID DURING THE PERIOD FOR INTEREST                                               $      73,006   $         -

            CASH PAID DURING THE PERIOD FOR TAXES                                                 $        -       $         -


            SUPPLEMENTAL SCHEDULE OF NON-CASH
            INVESTING AND FINANCING ACTIVITIES:
                      Conversion of note payable for 1,680,000 shares of common stock               $    420,000   $         -

                      Conversion of note payable for 1,000,000 shares of common stock             $      -          $       80,000

                      Acquisition of property and equipment under capital lease                    $   3,558,604   $        -

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

  </TABLE>

                  WORLDPORT COMMUNICATIONS INC. AND SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENT

  (1)  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       Organization

       WorldPort Communications, Inc. and subsidiaries (the "COMPANY") is a
       global, facilities-based telecommunications services provider offering a
       full range of voice and value-added services to carriers and corporate
       customers worldwide. The Company is focusing on expanding its network
       infrastructure in the United States and in major markets in Europe,
       Asia-Pacific and Latin America.

       Prior to the closing of the acquisitions of Telenational Communications
       Limited Partnership ("TNC") and The Wallace Wade Company ("WWC") in 1997
       (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 is no longer a development stage enterprise and, accordingly,
       the financial statement presentation and disclosures required for
       development stage enterprises have been omitted.

       Financial Condition

       The Company is subject to various risks in connection with the operation
       of its business including, among other things, (i) changes in external
       competitive market factors, (ii) termination of certain operating
       agreements or inability to enter into additional operating agreements,
       (iii) inability to satisfy anticipated working capital or other cash
       requirements, (iv) changes in or developments under domestic or foreign
       laws, regulations, licensing requirements or telecommunications
       standards, (v) changes in the availability of transmission facilities,
       (vi) changes in the Company's business strategy or an inability to
       execute its strategy due to unanticipated changes in the market, (vii)
       various competitive factors that may prevent the Company from competing
       successfully in the marketplace, (viii) the Company's lack of liquidity
       and its ability to raise additional capital, (ix) loss of services of
       key executive officers and (x) loss of a customer which provides
       significant revenues to the Company.  During 1997, the Company's first
       year of operations as an international telecommunications services
       provider, the Company incurred losses of approximately $3.5 million and
       expects to continue to incur operating losses in the near future and has
       an accumulated deficit of approximately $3.8 million as of December 31,
       1997 as well as a working capital deficit of approximately $4.1 million.
       Funding of the Company's working capital deficit, current and future
       operating losses and expansion of the Company will require substantial
       continuing capital investment.  As a result of the aforementioned
       factors and related uncertainties, there is substantial doubt about the
       Company's ability to continue as going concern.  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 financings will include debt and/or equity placements; however,
       no assurance can be given that the Company will be able to obtain
       additional financing on reasonable terms, if at all.  During the first
       quarter of 1998, the Company has raised approximately $10.1 million in
       connection with the sale of its Series B Convertible Preferred Stock
       (see Note 10) and was successful in increasing its existing lease
       financing facility to provide up to $13,000,000 in infrastructure
       financing.  The Company has also converted approximately $1.2 million
       in notes payable to related parties into its Series B Convertible
       Preferred Stock (see Note 5). In addition, during the first quarter of
       1998, the Company retained the services of a major New York-based
       investment banker to assist the Company in raising additional capital
       through debt and/or equity offerings.  The Company has currently made
       none of its scheduled payments on its debt obligation to Value
       Partners, Ltd. (see Note 5).

       Consolidation

       The accompanying consolidated financial statements include the accounts
       of the Company and its wholly-owned subsidiaries. All significant
       intercompany accounts and transactions have been eliminated.

       Use of Estimates

       The Company's financial statements are prepared in accordance with
       generally accepted accounting principles ("GAAP").  Financial statements
       prepared in accordance with GAAP require the use of management estimates
       and assumptions that affect the reported amounts of assets and
       liabilities and disclosure of contingent assets and liabilities at the
       date of the financial statements.  Additionally, management estimates
       affect the reported amounts of revenues and expenses during the
       reporting period.  Actual results could differ from those estimates.

       Goodwill

       Goodwill represents the total consideration the Company paid to acquire
       TNC and WWC in excess of the fair market value of the net tangible and
       identifiable assets acquired.  Goodwill is being amortized on a
       straight-line basis over 10 years, which represents management's
       estimation of the related benefit to be derived from the acquired
       businesses.  The Company periodically evaluates whether events and
       circumstances after the acquisition date indicate that the remaining
       balance of goodwill may not be recoverable.  If factors indicate that
       goodwill should be evaluated for possible impairment, the Company would
       compare estimated undiscounted future cash flow from the related
       operations to the carrying amount of goodwill.  If the carrying amount
       of goodwill were greater than undiscounted future cash flow, an
       impairment loss would be recognized.  Any impairment loss would be
       computed as the excess of the carrying amount of goodwill over the
       estimated fair value of the goodwill (calculated based on discounting
       estimated future cash flows). Accumulated amortization of goodwill was
       $344,955 and $0 as of December 31, 1997 and 1996, respectively.

       Realization of Long-Lived Assets

       The Company reviews the realization of its long-lived assets pursuant to
       Statement of Financial Accounting Standards ("SFAS") No. 121,
       "Accounting for the Impairment of Long-Lived Assets and Long-Lived
       Assets to be Disposed Of." SFAS No. 121 requires that long-lived assets
       be probable of future recovery in their respective carrying amounts as
       of each balance sheet date.  Management believes its long-lived assets
       are realizable and that no impairment allowance is necessary pursuant to
       the provisions of SFAS No. 121.

       Revenue Recognition

       The Company records revenues from its telecommunications services when
       customer calls are completed, based on minutes (or fractions thereof) of
       customer usage.  Payments received in advance for prepaid services are
       recorded as deferred revenues until such related services are provided.

       Concentration of Credit Risk

       The Company is subject to significant concentrations of credit risk,
       which consist primarily of trade accounts receivable. The Company sells
       a significant portion of its services to other carriers and resellers
       and, consequently, maintains significant receivable balances with
       certain customers.  If the financial condition and operations of these
       customers deteriorate below critical levels, the Company's operating
       results could be adversely affected. For the year ended December 31,
       1997, three customers accounted for approximately 33%, 32% and 26%,
       respectively, of total Company revenues.  All revenues are from
       unaffiliated customers.

       Accounting for Stock-Based Compensation

       In 1995, the Financial Accounting Standards Board ("FASB") issued SFAS
       No. 123, "Accounting for Stock-Based Compensation.  SFAS No. 123 allows
       the Company to adopt either of two methods for accounting for stock
       options. The Company has elected to account for its stock-based
       compensation plans under Accounting Principles Board, Opinion No. 25,
       "Accounting for Stock Issued to Employees" ("APB NO. 25").  In
       accordance with SFAS No. 123, certain pro forma disclosures are provided
       in Note 7.

       New Accounting Pronouncements

       In March 1997, the FASB issued SFAS No. 128, "Earnings Per Share".  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.  The Company adopted SFAS No. 128 in 1997 and all prior
       years presented in the accompanying consolidated financial statements
       have been restated in accordance with SFAS No. 128.

       In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
       Income".  SFAS No. 130 requires the presentation of comprehensive income
       in an entity's financial statements.  Comprehensive income represents
       all changes in equity of an entity during the reporting period,
       including net income and charges directly to equity which are excluded
       from net income (such as additional minimum pension liability changes,
       currency translation adjustments, unrealized gains and losses on
       available for sale securities, etc.).  The Company will adopt SFAS No.
       130 during the year ended December 31, 1998 and has not yet determined
       what additional disclosures may be required in connection with adopting
       SFAS No. 130.

       In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
       of an Enterprise and Related Information".  SFAS No. 131 requires the
       reporting of profit and loss, specific revenue and expense items and
       assets for reportable segments.  It also requires the reconciliation of
       total segment revenues, total segment profit or loss, total segment
       assets and other amounts disclosed for segments to the corresponding
       amounts in the general purpose financial statements. The Company will
       adopt SFAS No. 131 during the year ended December 31, 1998 and has not
       yet determined what additional disclosures may be required in connection
       with adopting SFAS No. 131.

       Year 2000 Issue

       The Year 2000 issue exists because many computer systems and
       applications currently use two-digit fields to designate a year.  As the
       century date change occurs, date-sensitive systems will recognize the
       year 2000 as 1900 or not at all. The inability to recognize or properly
       treat the Year 2000 may cause systems to process critical financial and
       operational information incorrectly.  The Company's management has
       assessed the impact of the Year 2000 issue on the Company's computer
       hardware and software systems.  Based on this assessment, management
       currently believes that the costs of resolving the Year 2000 issues will
       not be material to the Company's results of operations or financial
       condition.

       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") in exchange for (i) 3,750,000 shares of the Company's
       common stock (of which 1,250,000 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 working capital obligations and
       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.

       The results of operations of TNC are included in the consolidated
       financial statements of the Company from the date of acquisition, June
       20, 1997.

       The TNC 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 TNC Acquisition is summarized as follows:

  <TABLE>
  <CAPTION>
                                   <S>                                                        <C>
                                   Current assets                                             $  540,000
                                   Property and equipment                                      1,121,000
                                   Other long-term assets                                        189,000
                                   Goodwill                                                    5,850,000

                                   Assets acquired, net of cash                                7,700,000

                                   Less:   Assumed liabilities and transaction costs           4,887,000
                                              Common stock issued                              2,813,000

                                   Cash paid                                                $       -
                                                                                                   __
    </TABLE>

       Prior to the TNC Acquisition, the Company advanced $1,178,000 to TNC for
       working capital purposes.  This amount was included as part of the $4.6
       million of liabilities assumed in connection with the transaction.

       WWC Acquisition

       On July 3, 1997, the Company acquired WWC (the "WWC ACQUISITION").  WWC
       was a telecommunications marketing consulting firm that produced and
       implemented marketing strategies for clients ranging from small
       companies to large corporate clients.  The results of operations of WWC
       are included in the consolidated financial statements of the Company
       from the date of acquisition, July 3, 1997.  The Company's former
       President and Chief Executive Officer was the sole shareholder of WWC
       and sold WWC to the Company in exchange for: (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 purchase price adjustments,
       (ii) $75,000 cash of which $52,500 has been paid as of December 31, 1997
       and (iii) a promissory 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
       Company is currently negotiating with its former President and Chief
       Executive Officer to restructure the remaining portion of the cash due
       at closing as well as the payments on the promissory note which were due
       on October 1, 1997 and February 1, 1998.

       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:

  <TABLE>
  <CAPTION>


                                   <S>                                                       <C>
                                   Property and equipment                                    $    3,000
                                   Goodwill and other intangible assets                       1,313,000

                                   Assets acquired, net of cash                               1,316,000

                                   Less:   Promissory note                                      175,000
                                               Deferred cash payment                             23,000
                                               Assumed liabilities and transaction costs         15,000
                                               Common stock issued                            1,050,000

                                   Cash paid                                                  $  53,000

    </TABLE>

       The pro forma unaudited consolidated results of operations of the
       Company, as though the TNC Acquisition and the WWC Acquisition took
       place on January 1, 1996, are as follows:

  <TABLE>
  <CAPTION>
                                                                                                      December 31,
                                                                                               1997               1996


                                   <S>                                                  <C>                    <C>
                                   Revenues                                             $    6,335,000       $12,548,000

                                   Net loss                                              $  (5,761,000)     $ (2,629,000)

                                   Diluted net loss per share                            $       (0.37)     $      (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.

  (3)  NOTES RECEIVABLE

       The Company had notes receivable at December 31, 1997 and 1996
       consisting of the following:

  <TABLE>
  <CAPTION>
                                                                                             December 31,

                                                                                     1997              1996

                                  <S>                                            <C>                  <C>

                                  Com Tech International Corporation,
                                     interest at 12%, collected in full in      $      -           $  500,000
                                  1997
                                  Global Star International, Inc.,
                                     interest at 10%, collected in full in             -              800,000
                                  1997
                                                                                $      -           $1,300,000

    </TABLE>

  (4)  PROPERTY AND EQUIPMENT

       Property and equipment are carried at cost.  Expenditures for additions,
       improvements and renewals, which add significant value to the asset or
       extend the life of the asset, are capitalized.  Expenditures for
       maintenance and repairs are charged to expense as incurred.  The Company
       provides for depreciation of property and equipment using the straight-
       line method based on the estimated useful lives of the assets ranging
       from three to seven years.

       Following is a summary of property and equipment at December 31, 1997:

  <TABLE>
  <CAPTION>

                     <S>                                                        <C>
                     Switching equipment                                        $  4,841,305
                     Leasehold improvements                                          318,071
                     Office and computer equipment                                   159,320
                     Vehicles                                                          8,500
                     Furniture and Fixtures                                          126,146
                               Total property and equipment                        5,453,342
                     Less: accumulated depreciation and amortization                (421,484)
                               Property and equipment, net                      $  5,031,858
    </TABLE>

       Depreciation expense charged to operations was $421,484 and $0 for the
       years ended December 31, 1997 and 1996, respectively.

  (5)  DEBT AND CAPITAL LEASE OBLIGATIONS

       Notes Payable

       The December 31, 1997 short-term note payable 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.
       The note is secured by all of the assets acquired by the Company in
       connection with the TNC Acquisition.  As of December 31, 1997, the
       Company has made none of the scheduled payments on this note.  As of
       March 30, 1998, the note holder has not demanded payment.

       On July 1, 1996, Maroon Bells Capital Partners, Inc. ("MBCP") loaned the
       Company $500,000 pursuant to a promissory note, collateralized by a
       promissory note between the Company and Com Tech (see Note 3).  In
       October 1996, MBCP assigned $80,000 principal amount of the note to
       certain non-affiliated entities, which in turn was converted into shares
       of the Company's common stock resulting in the issuance of 1,000,000
       shares of common stock. In March 1997, MBCP exchanged the $420,000
       outstanding principal for 1,680,000 shares of the Company's common
       stock.

       Notes Payable   Related Parties

       Notes payable   related parties at December 31, 1997 consists of the
       following:

  <TABLE>
  <CAPTION>
                                   <S>                                                      <C>
                                   Bridge Notes                                            $  1,556,250
                                   Note payable to officer (see Note 2)                         175,000
                                                                                           $  1,731,250
    </TABLE>

       In September 1997, the Company entered into an arrangement with MBCP
       (see Note 8) whereby MBCP would arrange for the Company to borrow from
       MBCP and certain of its affiliated entities under certain promissory
       notes (the "BRIDGE NOTES").  The Bridge Notes bear interest at 10% per
       annum.  As of March 6, 1998, $1,191,250 of the Bridge Notes and accrued
       interest were converted into 230,627 shares of the Company's Series B
       Convertible Preferred Stock.  The remaining Bridge Notes were repaid in
       cash in March 1998.  (see Note 10)

       Capital Leases

       In connection with the TNC Acquisition, the Company assumed capital
       lease obligations relating to a switch and related network equipment
       located in Omaha, Nebraska.  The leases expire in March 2000 and July
       2000, respectively, and call for monthly payments in the amount of
       $14,097 and $2,129, respectively.  Additionally, on October 31, 1997,
       the Company entered into a lease agreement to purchase certain network
       and switching 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.  This
       lease is accounted for as a capital lease and is capitalized using the
       appropriate interest rate at the inception of the lease.  Future minimum
       annual lease payments applicable to assets held under capital lease
       obligations for years subsequent to December 31, 1997 are as follows:

  <TABLE>
  <CAPTION>
            Year Ending
             December 31,

            <S>                                    <C>
            1998                                   $ 1,411,721
            1999                                     1,655,123
            2000                                     1,517,606
            2001 and thereafter                        243,402
            Total minimum lease obligations          4,827,852
            Less interest                             (884,966)
            Present value of future minimum
              lease obligations                     $3,942,886

  </TABLE>

       Assets held under the capital leases aggregated $3,999,341 at December
       31, 1997.  The related accumulated depreciation was $254,401.

  (6)  COMMITMENTS AND CONTINGENCIES

       Service Agreements

       The Company is obligated under various service agreements with long
       distance carriers to pay minimum usage charges of approximately
       $13,088,000, $31,867,000, $20,069,000 and $1,400,000 for the twelve
       months ending December 31, 1998, 1999, 2000 and 2001, respectively.  The
       Company anticipates exceeding the minimum usage volume with these
       vendors.  The Company's obligations under the service agreements
       commence upon connectivity to the various vendors.  The Company has not
       yet incurred obligations under such contracts.  Management believes
       connectivity to the vendors will be completed during the second quarter
       of 1998.

       Operating Leases

       The Company and its subsidiaries lease their office facilities under
       various noncancelable operating lease agreements.  Future minimum
       commitments under the leases as of December 31, 1997 are as follows:

  <TABLE>
  <CAPTION>
                             Year Ending
                              December 31,
                             <S>                               <C>
                             1998                              $ 175,000
                             1999                                183,000
                             2000                                127,000
                             2001 and thereafter                  54,000
                             Minimum future lease payments     $ 539,000


    </TABLE>

       Total rental expense for operating leases for the years ended December
       31, 1997 and 1996 was $90,474 and $0, respectively.

       Employment Agreements

       During 1997, the Company has entered into employment agreements with
       various officers providing for employment terms of one to three years
       for salaries of $82,000 to $156,000 with additional provisions for
       discretionary bonuses based upon performance.  Additionally, the Company
       has granted options to purchase 320,000 shares of common stock to these
       officers at exercise prices ranging from $0.75 to $2.00 per share.  Such
       options vest over a two-year period.

       Consulting Agreement

       In connection with the TNC Acquisition, the Company executed an
       eighteen-month consulting agreement with the CEO of the General Partner
       of TNC who is also a director of the Company.   The agreement provides
       for monthly compensation in the amount of $7,000 plus reasonable expense
       reimbursement and incentive compensation for completed acquisitions and
       business opportunities to be determined on a case-by-case basis.  As of
       December 31, 1997, the Company has paid $28,000 under this agreement.

       Legal

       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 consolidated financial statements or results of
       operations of the Company.

  (7)  STOCKHOLDERS' EQUITY

       Series A Preferred Stock

       The Company has designated 750,000 shares of its preferred stock to be
       Series A Preferred Stock.  The Series A Preferred Stock is cumulative
       and bears dividends at the rate of 8% per annum, payable in cash or
       shares of the Company's common stock at the option of the Company.  The
       Series A Preferred Stock is convertible at any time, at the option of
       the holder, and is convertible at the option of the Company upon the
       occurrence of certain events, into an equal number of shares of the
       Company's common stock and such holders have the same voting rights as
       those of the common stock.  In November 1997, the Company issued 493,889
       shares of Series A Preferred Stock for total gross proceeds of
       $1,111,250, and paid offering costs of $113,845.  Accrued dividends at
       December 31, 1997 were $11,360.

       Common Stock

       On June 26, 1996, MBCP, its principals and certain non-affiliated
       investors entered into a stock purchase agreement to purchase newly-
       issued shares of the Company's common stock representing approximately
       98.5% of the outstanding shares of the Company as of the date of the
       agreement for $110,000 in cash.  Prior to the stock purchase agreement,
       the Company had no operations and little or no assets or liabilities.
       Effective upon this change of control, the Company adopted a business
       strategy to enter the international telecommunications services
       industry.

       On March 13, 1997, the Company closed a private placement offering (the
       "OFFERING") of 3,333,333 shares of common stock at $0.75 per share
       pursuant to which the Company received gross proceeds of $2,500,000, of
       which $2,387,750 was received in 1996.  The Company incurred $102,068 in
       offering costs in connection with the Offering.  In connection with the
       Offering, the Company paid an affiliated organization $100,000 for
       services rendered in connection with the Offering pursuant to an
       advisory agreement between the affiliate and the Company.

       Long-term Incentive Plan

       The Company adopted an incentive stock option plan for employees and
       consultants in September 1996.  The Company has reserved 2,000,000
       shares of common stock for issuance pursuant to the plan.  As of
       December 31, 1997, there were 410,000 outstanding options under the plan
       at exercise prices ranging from $0.08 to $2.00 per share which vest over
       a period ranging from one to three years.  In the first quarter of 1998,
       the Company authorized an additional 20,000 stock options for an
       employee with an exercise price of $3.50 per share and granted 1,200,000
       shares of restricted stock to certain officers (See Note 10).

       Other Stock Options

       Additionally, the Company has issued stock options to certain employees,
       consultants and directors pursuant to grants by the Board of Directors.
       As of December 31, 1997, there were 515,000 outstanding options
       resulting from grants by the Board of Directors with exercise prices
       ranging from $0.08 to $2.25 per share.  In March 1998, the Company
       issued an additional 1,400,000 stock options to certain employees at
       exercise prices ranging from $1.00 to $4.50 per share.  At the time of
       grant, the options will be recorded in accordance with APB No. 25 (see
       Note 10).

       Stock Options

       A summary of the status of the Company's stock option plan and other
       options at December 31, 1997 and 1996 and changes during the years then
       ended is presented in the table and narrative below:

  <TABLE>
  <CAPTION>
                                                                                      1997                              1996
                                                                                    Weighted                          Weighted
                                                                                     Average                           Average
                                                                       Shares        Exercise Price     Shares      Exercise Price
                           <S>                                     <C>                  <C>            <C>             <C>
                           Outstanding at beginning of year            75,000           $ 0.08         -               $   -

                                Granted                             1,100,000             1.74           75,000             0.08

                                Exercised                            -                   -             -                   -

                                Forfeited                            (250,000)            1.25         -                   -
                                Expired                                -                 -               -                 -

                           Outstanding at end of year                 925,000             1.27           75,000             0.08
                           Exercisable at end of year                 505,000             0.95           75,000             0.08

                           Weighted average fair value
                                of options granted                     $ 0.65                             $0.72

    </TABLE>

       The options outstanding at December 31, 1997 have exercise prices
       between $0.08 and $2.25, with a weighted average remaining contractual
       life of 9.3 years.

       Had compensation cost for stock options been determined under SFAS No.
       123, the Company's net loss and net loss per share would have been the
       following pro forma amounts:

  <TABLE>
  <CAPTION>
                                                                                                Year ended December 31,
                                                                                                1997                 1996
                                  <S>                                                       <C>                  <C>
                                  Net loss
                                       As reported                                         $(3,492,767)          $(259,898)
                                       Pro forma                                            (3,730,727)           (313,523)
                                  Net loss per share
                                       As reported                                               (0.26)              (0.11)
                                       Pro forma                                                 (0.28)              (0.13)

    </TABLE>

       Under SFAS No. 123, the fair value of each option grant was estimated on
       the date of grant using the Black-Scholes option pricing model.   The
       following weighted average assumptions were used for grants in 1997 and
       1996, respectively: risk-free interest rates of 6.8% and 6.7%; dividend
       rates of $0 and $0; expected lives of 10 and 10 years; expected
       volatility of 58.1% since the Company's stock began trading in June
       1997.

       The Black-Scholes option pricing model and other existing models were
       developed for use in estimating the fair value of traded options that
       have no vesting restrictions and are fully transferable.  In addition,
       option valuation models require the input of and are highly sensitive to
       subjective assumptions including the expected stock price volatility.
       The Company's employee stock options have characteristics significantly
       different from those of traded options, and changes in the subjective
       input assumptions can materially affect the fair value estimate.


  (8)  RELATED PARTY TRANSACTIONS

       Advisory Agreements

       On October 31, 1996, the Company entered into an advisory agreement with
       an affiliate of MBCP.  MBCP is a shareholder of the Company and certain
       members of the Company's Board of Directors are principals or employees
       of MBCP.  The agreement provided among other things, that the affiliate
       would assist the Company in the identification of potential merger or
       acquisition candidates, and assist in the development and implementation
       of a corporate financial strategy for which the Company would pay an
       advisory fee of up to $360,000 for services provided, when and if such
       services are completed in a manner satisfactory to the Company, payable
       no later than June 30, 1997.  On January 14, 1997, the Company paid the
       affiliate $150,000 for actual services rendered.  No other amounts are
       owed under the advisory agreement at December 31, 1997.

       On March 7, 1997, the Company and MBCP entered into a twelve (12) month
       agreement (the "ADVISORY AGREEMENT") wherein MBCP agreed to provide
       certain services to the Company in exchange for (i) a monthly retainer
       of $10,000 and (ii) certain success fees payable when and if MBCP
       successfully assists the Company in certain transactions including, but
       not limited to, mergers and acquisitions. The fee includes a base plus
       an additional amount based on a percentage of the value of the
       transaction.  As part of the Advisory Agreement, the Company agreed to
       reimburse MBCP for certain travel and out-of-pocket expenses incurred by
       MBCP on behalf of the Company.   In connection with the TNC Acquisition,
       MBCP earned a fee of $150,000.  On November 17, 1997, MBCP converted the
       unpaid balance of its fee related to the TNC Acquisition, totaling
       $135,000, into a Bridge Note (see Note 5).

       On February 4, 1998, the Company amended the Advisory Agreement with
       MBCP to ensure the continuity of services during its expansion phase by
       renewing the Advisory Agreement for an additional twenty-four months
       with an expiration of March 7, 2000.  Under terms of the amendment, the
       Company agreed to grant MBCP five-year options to purchase 250,000
       shares of the Company's common stock at an exercise price of $2.00 per
       share.   At the time of grant, the options will be valued in accordance
       with SFAS No. 123.

       As of December 31, 1997, there was approximately $182,000 of accrued
       advisory fees and related expenses payable to MBCP under the Advisory
       Agreement.

       Consulting Agreements

       In July 1996, the Company entered into consulting agreements with
       certain principals and employees of MBCP.  Pursuant to the consulting
       agreements, a total of 650,000 shares of common stock were earned by the
       consultants for services rendered to the Company.  The 650,000 shares
       were valued at $0.05 per share, which the Company deemed to be the fair
       market value of the shares at the time of issuance.

       Employment Agreements

       During 1997 and 1996, two employees of MBCP each were paid $1,250 per
       month for providing employment services to the Company.  These
       employment agreements expired in 1997.  Additionally, each was granted
       options to purchase 25,000 shares of the Company's common stock during
       1996 at an exercise price of $0.08 per share, which approximated fair
       market value at the date of grant.

       Series B Convertible Preferred Stock Purchase

       In March 1998, Anderlit, Ltd., a privately-owned investment fund
       ("ANDERLIT"), purchased 746,269 shares of the Company's Series B
       Convertible Preferred Stock for an aggregate purchase price of
       $4,000,000.  Anderlit is an investment fund investing in a portfolio of
       emerging telecommunications companies.  MBCP is the majority investor in
       Anderlit, votes all of its shares and manages the fund's investment
       portfolio.  From time to time, MBCP has advised other shareholders with
       regards to investments in the Company.

       Office Lease

       In connection with the TNC Acquisition, the Company leases its
       facilities in Omaha, Nebraska from a partnership, in which one of the
       Company's directors is a partner.  The four-year lease agreement,
       commencing July 1, 1997, provides for monthly payments in the amount of
       $8,992.

  (9)  TAXES

       The Company has had losses since inception and, therefore, has not been
       subject to federal income taxes.  As of December 31, 1997, the Company
       has net operating loss (NOL) carryforwards for income tax purposes,
       subject to the limitations described below, expiring as follows:

  <TABLE>
  <CAPTION>
                                        <S>                          <C>
                                        Year Expires -
                                        2005                         $         1,551
                                        2006                                   4,398
                                        2007                                   4,670
                                        2008                                   5,281
                                        2009                                   5,644
                                        2010                                   7,432
                                        2011                                   7,032
                                        2012                                 259,898
                                        2013                               3,398,819
                                        Total                           $  3,694,725

    </TABLE>

       The Tax Reform Act of 1986 provided for a limitation on the use of NOL
       carryforwards following certain ownership changes that could limit the
       Company's ability to utilize the NOLs.  Accordingly, the Company's
       ability to utilize the above NOL carryforwards to reduce future taxable
       income and tax liabilities may be limited.  Additionally, because U.S.
       tax laws limit the time during which NOL carryforwards may be applied
       against future taxable income and tax liabilities, the Company may not
       be able to take full advantage of its NOL carryforwards for federal
       income tax purposes.

       The Company accounts for income taxes in accordance with SFAS No. 109,
       "Accounting for Income Taxes."  As the Company has incurred losses since
       inception, and there is no certainty of future profitability, a deferred
       tax asset has been recorded and reserved in full in the accompanying
       consolidated financial statements for the Company's NOL carryforward.

       The tax effects of temporary differences that give rise to significant
       portions of the deferred tax assets and liabilities at December 31, 1997
       and 1996 are as follows:

  <TABLE>
  <CAPTION>
                                                                                                  December 31,
                                                                                          1997               1996
                                     <S>                                                <C>               <C>

                                     Deferred tax assets and (liabilities) -
                                       Net operating loss carryforwards               $ 1,293,154         $  103,657
                                       Property & equipment and intangible assets         (51,261)         -
                                       Accounts receivable                                  4,962          -
                                       Accruals/expenses not currently                                     -
                                          deductible                                       44,625          -
                                               Total deferred tax assets                1,291,480            103,657
                                       Less: Valuation allowance                       (1,291,480)          (103,657)
                                               Net deferred tax asset                $     -            $        -


    </TABLE>

  (10) SUBSEQUENT EVENTS

       Equipment Leases

       In February 1998, the Company entered into two lease agreements through
       which the Company has placed orders for switching and network equipment
       to be installed in New York and The Netherlands.  The leases call for
       aggregate monthly payments of $93,330 for a period of 48 months
       commencing upon installation of the equipment.

       In March 1998, the Company successfully negotiated an increase in its
       lease financing facility from $10,000,000 to $13,000,000.  In connection
       with the increase in the lease financing facility, the Company purchased
       additional switching equipment to be installed in New York and The
       Netherlands.

       Series B Preferred Stock Offering

       During the first quarter of 1998, the Company initiated a private
       placement offering of its par value $0.0001 Series B Convertible
       Preferred Stock (the "SERIES B PREFERRED STOCK OFFERING") at $5.36 per
       share.  The Series B Convertible Preferred Stock is convertible into
       shares of the Company's common stock at any time at the option of the
       holder at a rate of 4 shares of common stock for each share of preferred
       stock.  Holders of Series B Convertible Preferred Stock have voting
       rights equal to 40 votes per share on all matters submitted to a vote of
       the stockholders of the Company.  As of March 30, 1998, the Company has
       received approximately $10.1 million in proceeds from the sale of the
       Series B Convertible Preferred Stock and has converted approximately
       $1.2 million of Bridge Notes and accrued interest into the Series B
       Convertible Preferred Stock in exchange for 2,112,106 shares of the
       Company's Series B Convertible Preferred Stock.

       Employment Agreements

       During the first quarter of 1998, the Company entered into employment
       agreements with seven executives of the Company providing for annual
       salaries ranging from $125,000 to $300,000 with additional provisions
       for discretionary bonuses based upon performance.  In connection with
       these agreements, the Company issued options to purchase 1,400,000
       shares of common stock to these executives at exercise prices ranging
       from $1.00 to $4.50 per share.  Such options vest over a two to three
       year period.  At the time of grant, these options will be recorded in
       accordance with APB No. 25. Additionally, the Company granted three
       executives a total of 1,200,000 shares of common stock which will result
       in a compensation charge of approximately $1.6 million in the first
       quarter of 1998 based on the fair value of the 1,200,000 shares of stock
       granted.

       Acquisitions

       In February 1998, the Company commenced operations in The Netherlands
       through the acquisition of all of the outstanding stock of MathComp B.V.
       ("MATHCOMP").  The Company changed the name of MathComp to WorldPort
       Communications Europe, B.V. ("WORLDPORT EUROPE").  In connection with
       this acquisition, the Company issued 150,000 shares of the Company's
       common stock and will pay $250,000 in cash, payable within 45 days of
       the closing of the acquisition.  The former shareholder of MathComp is
       eligible to earn an additional 2,350,000 shares of the Company's common
       stock contingent upon the attainment of certain future revenue and gross
       margin requirements during the first and second quarters of 1999.  In
       connection with the acquisition, the Company entered into a three-year
       employment agreement with the former shareholder of MathComp for an
       annual salary of approximately $90,000.

       On March 25, 1998, the Company entered into a definitive agreement for
       the acquisition of the telecommunications assets and operations of
       InterContinental Exchange, Inc. ("ICX"), a licensed provider of
       international telecommunications services headquartered in the San
       Francisco Bay area, in exchange for 400,000 shares of the Company's
       common stock (of which 200,000 shares will be held pursuant to an escrow
       agreement for a period of eighteen months following the closing subject
       to the attainment of certain future revenue requirements and to
       indemnify the Company for certain representations and warranties).  In
       addition, the Company will enter into two-year employment agreements
       with three employees of ICX providing for annual salaries of $84,000 and
       issue options to purchase 120,000 shares of common stock at exercise
       prices ranging from $7.00 to $10.00 per share with a vesting period of
       one to two years.  The ICX acquisition is currently scheduled to close
       early in the second quarter of 1998.


  ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

  Upon recommendation of the Audit Committee of the Board of Directors of the
  Company and upon approval of such recommendation by the Board of Directors,
  the Company replaced Schumacher & Associates, Inc. ("SCHUMACHER") as its
  independent public accounting firm on June 30, 1997.  Effective July 1, 1997,
  the Company engaged Arthur Andersen LLP as its independent public
  accountants.  The prior accountant's report of Schumacher on the financial
  statements of the Company for the years ended December 31, 1996 and 1995,
  respectively, and for the period from January 6, 1989 (date of inception) to
  December 31, 1996 was not qualified or modified in any manner and contained
  no disclaimer of opinion or adverse opinion.

  No disagreements exist between the Company and Schumacher on any matter of
  accounting principle or practice, financial statement disclosure or auditing
  scope or procedure related to the financial statements of the Company for the
  years ended December 31, 1996 and 1995, respectively, and for the period from
  January 6, 1989 (date of inception) to December 31, 1996 or for the interim
  period beginning January 1, 1997 through June 30, 1997, the date of
  replacement.


                                     PART III

  ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS

  The executive officers and directors of the Company are as follows:


  <TABLE>
  <CAPTION>
                               Name                Age                  Position                            Tenure

                         <S>                        <C>         <C>                              <C>
                         Paul A. Moore               42     Chairman of the Board of Directors   January 1, 1998 to Present
                                                                and Chief Executive Officer

                         Daniel M. Wickersham        51               President and              March 2, 1998 to Present
                                                                  Chief Operating Officer

                         Phillip S. Magiera          43          Chief Financial Officer,        February 10, 1997 to Present
                                                                  Secretary and Director

                         John W. Dalton              50      President   Diversified Services    April 8, 1997 to Present
                                                                       and Director

                         Daniel G. Lazarek           32               Vice President             March 23, 1998 to Present
                                                                Global Sales and Marketing

                         Jim B. Hendrickson          45              Vice President of           March 9, 1998 to Present
                                                              Technology & Strategic Planning

                         Donald C. Wright            36          Vice President of Finance       March 9, 1998 to Present

                         Edmund H. Blankenau         66                  Director                October 2, 1997 to Present

                         Peter A. Howley             58                  Director                June 11, 1997 to Present

                         Edward P. Mooney            38                  Director                September 30, 1996 to Present
    </TABLE>

  Paul A. Moore - From 1993 to the present, Mr. Moore has been a Principal of
  MBCP, an international merchant banking firm specializing in providing
  corporate finance and advisory services to emerging companies in the
  telecommunications industry.  Mr. Moore has over 15 years experience in
  mergers, acquisitions and investments in the telecommunications industry.
  For eight years prior to co-founding MBCP, Mr. Moore was President of
  Anderson Pacific, a private firm specializing in telecommunications industry
  investments.  Prior to that, Mr. Moore served as Director of Franchising and
  Vice President of New Business Development for Centel.

  Daniel M. Wickersham - From 1996 until joining the Company, Mr. Wickersham
  served as Director of Enterprise Solutions for EQUANT Network Services, Inc.
  where he was responsible for development of EQUANT's strategic relationships
  and outsourcing of private global networks.  Prior to EQUANT, Mr. Wickersham
  served for one year on a special tour-of-duty in the U.S. Army where he
  managed the engineering and development of distance learning and battle
  simulation technology.  From 1993 to 1995, as an executive at AT&T, Mr.
  Wickersham was a member of the Account Strategy and Planning Team,
  responsible for major corporate customers such as Citicorp.  Prior to his
  service at AT&T, Mr. Wickersham served from 1987 to 1993 as a Senior National
  Accounts Manager and Area Business Development Manager for Sprint.

  Phillip S. Magiera - Mr. Magiera has been a Principal of MBCP since 1995.
  From 1990 until 1995, Mr. Magiera was the founder and President of Applied
  Telecommunications Technologies, Inc. ("ATTI").  For ATTI, he managed funds
  totaling $111 million of debt and equity which were invested in over 35
  emerging telecommunications services providers and manufacturers involved in
  technologies such as cellular service, competitive access and Internet
  access. Prior to founding ATTI, Mr. Magiera served as Vice President of
  Fidelity Ventures, Inc., a wholly-owned subsidiary of Fidelity Investments,
  where he managed investments in telecommunications and financial service
  companies.  On January 1, 1998, Mr. Magiera joined the Company as its Chief
  Financial Officer.  Mr. Magiera has also served as a member of the Board of
  Directors of the Company since February 10, 1997.

  John W. Dalton - Mr. Dalton joined the Company as its President and Chief
  Executive Officer on April 8, 1997.  Concurrent with the recent executive
  management changes, Mr. Dalton was appointed President   Diversified
  Services. From 1990 until joining the Company, Mr. Dalton served as President
  of the Wallace Wade Company, a telecommunications marketing consulting firm
  which produced and implemented marketing strategies for clients ranging from
  small companies to large corporate clients.  As President of WWC, Mr. Dalton
  consulted on telecommunications network solutions involving virtual private
  networks, international telecommunications services and data transmission.
  Mr. Dalton is the former chief executive officer and a former director of
  Global Star International, Inc.

  Daniel G. Lazarek - From 1994 to 1998, Mr. Lazarek served as Vice President,
  Sales and Service for Citizens Communications, where he was responsible for a
  staff of over 2,000 people and $450 million in annual revenue.  Mr. Lazarek
  directed the development of a 200 member direct sales force, a 600 agent
  marketing group and a 700 operator telemarketing team.  From 1987 to 1994,
  Mr. Lazarek served in various sales and management positions for Frontier
  Corporation, a major long distance reseller.  Most recently he served as
  Marketing and Business Development Director - U.S. Telephone Operations.  In
  this position Mr. Lazarek was responsible for a $650 million annual revenue
  account base including 37 telephone companies in 14 states.

  Jim B. Hendrickson - From 1996 to 1998, Mr. Hendrickson served as Principal,
  Enterprise Solutions for EQUANT Network Services, Inc. In this position Mr.
  Hendrickson was responsible for the analysis and development of network
  technologies and platforms and strategic account identification and
  development.  From 1994 to 1996, Mr. Hendrickson served as a National Account
  Manager for AT&T.  In that capacity he was responsible for a complex
  international customer account including management of sales and technical
  professionals, budgets, contracts and strategic planning.

  Donald C. Wright - From 1997 to 1998, Mr. Wright served as Director,
  Outsourcing Negotiations and Bid Management for EQUANT International, a
  division of EQUANT Network Services, Inc., where he served as principal in
  the development of numerous joint venture and global outsourcing
  opportunities.  Mr. Wright's professional career includes extensive project
  management, capital investment analysis, transaction analysis, operating and
  capital budget planning and cash management experience gained through
  executive level positions with The Sabre Group where he served from 1991 to
  1994 and Societe International de Telecommunications Aeronautiques ("SITA")
  where he served from 1994 to 1997.

  Edmund H. Blankenau - From 1989 through the present, Mr. Blankenau served as
  the Chairman and CEO of the General Partner of TNC, the assets and operations
  of which were acquired by the Company during 1997.  Prior to founding TNC,
  Mr. Blankenau founded MidAmerican Long Distance Company to compete with AT&T,
  MCI and Sprint for newly opened long distance business.  He sold MidAmerican
  in 1988, with revenues of $85 million per year, to LDDS (now WorldCom).
  Prior to founding MidAmerican, Mr. Blankenau, starting in 1975, purchased
  and/or acquired franchises and started a group of cable television stations
  serving military bases and small towns in 20 states.  These were sold from
  1986 to 1988.  Mr. Blankenau attended Creighton University in Omaha,
  Nebraska, and Johann Wolfgang Goethe University in Frankfurt, Germany.

  Peter A. Howley - From 1994 to the present, Mr. Howley has been a private
  investor and a member of various boards of directors.  From 1985 until 1994,
  Mr. Howley served as Chief Executive Officer of Centex Telemanagement, Inc.,
  a U.S. company specializing in the outsourcing of telecommunications
  management for small to medium-sized businesses.  From 1976 until 1985 Mr.
  Howley was Vice President and General Manager of the Arizona Telephone
  Operations of Citizens Utilities Company.  Prior to 1976, Mr. Howley served
  in various capacities at both MCI and AT&T.  Mr. Howley also currently serves
  on the boards of FaxSAV, Inc. and DOS Communications.  Mr. Howley has served
  on the NASDAQ Corporate Advisory Board and the American Business Conference.
  Previously, Mr. Howley served as an officer in the United States Air Force
  and is a graduate of New York University.

  Edward P. Mooney - From October 1996 to April 7, 1997, Mr. Mooney served as
  the President, Chief Executive Officer and Director of the Company.  Since
  1993, Mr. Mooney has served as an Associate Director of MBCP.  For MBCP, Mr.
  Mooney specializes in strategic planning, corporate valuations, corporate
  governance, and financial analysis. Mr. Mooney now serves as a Director of
  the Company. From 1989 until 1992, Mr. Mooney served as Director of Research
  for American Business Ventures, Inc., a business development and management
  consulting firm that served publicly traded and privately-held companies.
  From 1984 to 1989, Mr. Mooney was a research assistant for A.B. Laffer
  Associates, an economic research and consulting firm.  Mr. Mooney holds a
  Bachelor of Arts degree in Geography from San Francisco State University and
  a Master of Arts degree in Education from California State University, Long
  Beach.

  The Company's officers, directors and 10% beneficial owners are not required
  to file reports pursuant to Section 16(a) of the Securities Exchange Act of
  1934, as amended, (the "EXCHANGE ACT") since the Company has no equity
  securities registered pursuant to Section 12 of the Exchange Act.


  ITEM 10.  EXECUTIVE COMPENSATION

  EXECUTIVE COMPENSATION

  The following summary compensation table sets forth information concerning
  cash and non-cash compensation paid by the Company during the fiscal years
  ended December 31, 1995, 1996 and 1997 to each person who served as the
  Company's Chief Executive Officer in 1997. No other executive officers of the
  Company received compensation for services in all capacities to the Company
  in excess of $100,000 in either year.

  <TABLE>
                            SUMMARY COMPENSATION TABLE
  <CAPTION>
                                                                                                     Long-Term Compensation
                                                 Annual Compensation                            Awards        Payout
                                                                  Other                      Securities
                                                                  Annual       Restricted     Underlying                All Other
        Name and                                                  Compen         Stock         Options/       LTIP       Compen-
     Principal Position    Year      Salary ($)     Bonus ($)    sation ($)    Award(s)($)       SARs (#)    Payouts    sation ($)
  <S>                      <C>       <C>            <C>             <C>           <C>            <C>           <C>         <C>
  Edward P. Mooney (1)     1997      $ 5,000          -                            -            65,000          -           -
    Chief Executive        1996      $ 2,500        $ 2,500          -             -            50,000          -           -
    Officer (Former)       1995         -                            -             -               -            -           -
  John W. Dalton (1)       1997     $104,451           -             -             -            265,000         -           -
    Chief Executive        1996         -             -              -             -               -            -           -
    Officer                1995         -              -             -             -               -            -           -

   ___________________
   (1) Mr. Mooney commenced  his employment with the  Company as
       of October 7, 1996 and  was replaced as President  and Chief
       Executive  Officer on  April  8, 1997  by  Mr. Dalton.   See
       "Employment  Agreements"  and  "Certain  Relationships   and
       Related Transactions."

  </TABLE>

  The following table sets forth information concerning grants of stock options
  during the fiscal year ended December 31, 1997 to each person who served as
  the Company's Chief Executive Officer in 1997.

  <TABLE>
  <CAPTION>

                                     Stock Options Granted in Fiscal 1997

                               Number of Securities       % of Total Options/SARs
                              Underlying Options/SARs     Granted to Employees in     Exercise Price
              Name                  Granted (#)                   Fiscal 1997         Per Share (3)       Expiration Date
   <S>                              <C>                           <C>                       <C>                <C>
   Edward P. Mooney                  65,000 (1)                      8.1%                    $0.75               March 2007
   Chief Executive Officer
          (Former)

   John W. Dalton                    65,000 (1)                      8.1%                    $0.75               April 2007
   Chief Executive Officer          200,000 (2)                     24.8%                    $2.00               April 2007

   ___________________
   (1) These options  vested and became exercisable  immediately
       upon grant.

   (2) These options  vest and become  exercisable 50% in April
       1998 and 50% in April 1999.

   (3) All options were granted at  an exercise  price equal to
       or  in excess  of  the fair  market  value of  the Company's
       common stock as  determined by the Board of Directors of the
       Company on  the date of grant.   The  Company's common stock
       was not publicly traded at  the time of the option grants to
       the officers.

  </TABLE>


  The following table sets forth information concerning the exercise of stock
  options during the fiscal year ended December 31, 1997 and the aggregate
  value of all unexercised stock options outstanding as of December 31, 1997
  for each person who served as the Company's Chief Executive Officer in 1997.

  <TABLE>
  <CAPTION>
                                  Aggregate Option/SAR Exercises in Fiscal 1997
                                     and December 31, 1997 Option/SAR Values

                                                                            Number of Securities          Value of Unexercised
                             Shares Acquired                               Underlying Unexercised              In-the-Money
             Name            on Exercise(#)      Value Realized($)           Options/SAR's (#)              Options/SARs($)(1)
                                                                        Exercisable     Unexercisable   Exercisable   Unexercisable
        <S>                       <C>                <C>                <C>           <C>               <C>          <C>
        Edward P. Mooney            -                 -                90,000          -               $ 69,850         -
        Chief Executive Officer
               (Former)

        John W. Dalton              -                 -                 65,000       200,000           $ 38,350         -
        Chief Executive Officer

   ___________________
   (1) Value  is calculated  by subtracting  the exercise  price
       per share for each option from the fair market value of  the
       underlying   common   stock   at  December   31,   1997  and
       multiplying by the  number of shares subject  to the option.
       Fair market  value is based on  an independent  valuation of
       the Company's common stock as of December 31, 1997.

   </TABLE>

  Compensation of Directors

  During 1997, all directors of the Company, including non-employee directors
  and employee directors, received 50,000 stock options in their capacity as
  directors and 15,000 stock options for each board committee upon which the
  director served.  These options vested and became exercisable immediately
  upon grant.  Options to purchase a total of 390,000 shares of stock were
  issued to members of the Board of Directors with exercise prices ranging from
  $0.75 to $1.50 per share.

  Employment Agreements

  Until April 7, 1997, the Company had an employment agreement with Edward P.
  Mooney which was effective as of October 7, 1996.  Pursuant to this
  agreement, the Company paid $1,250 per month to Mr. Mooney, beginning
  November 1, 1996.  The Company also paid Mr. Mooney an initial bonus of
  $2,500 upon execution of the employment agreement.  Effective April 7, 1997,
  Mr. Mooney resigned as President and Chief Executive Officer of the Company.


  In April 1997, the Company entered into a three-year employment agreement
  with Mr. John Dalton whereby Mr. Dalton agreed to serve as the Company's
  President and Chief Executive Officer.   Pursuant to the terms of his
  employment agreement, Mr. Dalton will earn a base salary of $156,000 per
  year, and will be eligible to earn performance incentive bonuses up to
  $100,000 during the first 12 months of his employment based on certain
  business development and growth criteria.  In addition, Mr. Dalton was
  granted an option to purchase 200,000 shares of the Company's common stock at
  an exercise price of $2.00 per share, based on the following schedule:
  100,000 options vested after one year of service to the Company and 100,000
  options vested after two years of service to the Company.

  In April 1997, the Company entered into a one-year employment agreement with
  Mr. W. Dean Spies to serve as the Company's Chief Financial Officer and
  Treasurer.  Pursuant to the terms of his employment agreement, Mr. Spies will
  earn a base salary of $82,000 per year and will be eligible to earn incentive
  bonuses during the next 12 months of up to $20,500 based on criteria to be
  established by the Board of Directors.  In addition, Mr. Spies was granted an
  option to purchase 120,000 shares of the Company's common stock at prices
  ranging from $0.75 - $1.50 per share.  These options vest based on the
  following schedule: 40,000 as of April 7, 1997, 40,000 as of April 7, 1998
  and 40,000 as of April 7, 1999.  Mr. Spies is the nephew of Mr. Dalton.

  In January 1998, the Company entered into a two-year employment agreement
  with Mr. Paul A. Moore whereby Mr. Moore agreed to serve as the Company's
  Chief Executive Officer.  Pursuant to the terms of his employment agreement,
  Mr. Moore will earn a base salary of $300,000 during the first year of his
  employment agreement, increasing to $345,000 in the second year.  Mr. Moore
  will also be eligible to earn an annual bonus of up to 50% of his base salary
  based on criteria to be established by the Board of Directors.  Mr. Moore
  received no cash payments of his salary during the first quarter of 1998.  A
  portion of Mr. Moore's salary is payable in the Company's Series B
  Convertible Preferred Stock at a rate of $5.36 per share and will be deferred
  until the end of Mr. Moore's employment agreement.  In addition, Mr. Moore
  was granted 500,000 restricted shares of the Company's common stock.

  In January 1998, the Company entered into a two-year employment agreement
  with Mr. Phillip S. Magiera whereby Mr. Magiera agreed to serve as the
  Company's Chief Financial Officer. Pursuant to the terms of his employment
  agreement, Mr. Magiera will earn a base salary of $240,000 during the first
  year of his employment agreement, increasing to $276,000 in the second year.
  Mr. Magiera will also be eligible to earn an annual bonus of up to 50% of his
  base salary based on criteria to be established by the Board of Directors.
  Mr. Magiera received no cash payments of his salary during the first quarter
  of 1998.  A portion of Mr. Magiera's salary is payable in the Company's
  Series B Convertible Preferred Stock at a rate of $5.36 per share and will be
  deferred until the end of Mr. Magiera's employment agreement.  In addition,
  Mr. Magiera was granted 500,000 restricted shares of the Company's common
  stock.

  In March 1998, the Company entered into employment agreements with the
  following executives:

  Mr. Daniel M. Wickersham has agreed to serve as the Company's President and
  Chief Operating Officer commencing March 2, 1998.  Pursuant to the terms of
  his employment agreement, Mr. Wickersham received a signing bonus of $60,000,
  will earn a base salary of $175,000 per year and will be eligible to earn
  performance incentive bonuses up to 50% of his base salary during the first
  12 months of his employment based on criteria to be established by the Board
  of Directors.  In addition, Mr. Wickersham was granted 200,000 restricted
  shares of common stock and an option to purchase an additional 400,000 shares
  of the Company's common stock at prices ranging from $1.75 - $4.50 per share.
  These options vest based on the following schedule: 100,000 as of March 2,
  1998, 150,000 as of March 2, 1999 and 150,000 as of March 2, 2000.

  Mr. James M. Sever has agreed to serve as the Company's Senior Vice President
  of Network Operations commencing on or before April 13, 1998.  Pursuant to
  the terms of his employment agreement, Mr. Sever received a signing bonus of
  $50,000, will earn a base salary of $150,000 per year and will be eligible to
  earn performance incentive bonuses up to 50% of his base salary during the
  first 12 months of his employment based on criteria to be established by the
  Board of Directors. In addition, Mr. Sever was granted an option to purchase
  400,000 shares of the Company's common stock at prices ranging from $2.00 -
  $3.50 per share.  These options vest ratably over a three-year period
  commencing on the first anniversary of employment.

  Mr. Daniel G. Lazarek has agreed to serve as the Company's Vice President of
  Global Sales and Marketing commencing March 23, 1998.  Pursuant to the terms
  of his employment agreement, Mr. Lazarek received a signing bonus of $25,000,
  will earn a base salary of $150,000 per year and will be eligible to earn
  performance incentive bonuses up to 50% of his base salary during the first
  12 months of his employment based on criteria to be established by the Board
  of Directors.  In addition, Mr. Lazarek was granted an option to purchase
  300,000 shares of the Company's common stock at prices ranging from $1.00 -
  $2.25 per share.  These options vest based on the following schedule: 75,000
  as of March 23, 1998 and 225,000 ratably over a three-year period commencing
  on the first anniversary of employment.

  Mr. Jim B. Hendrickson has agreed to serve as the Company's Vice President of
  Technology & Strategic Planning commencing on March 9, 1998.  Pursuant to the
  terms of his employment agreement, Mr. Hendrickson received a signing bonus
  of $25,000, will earn a base salary of $125,000 per year and will be eligible
  to earn performance incentive bonuses up to 50% of his base salary during the
  first 12 months of his employment based on criteria to be established by the
  Board of Directors.  In addition, Mr. Hendrickson was granted an option to
  purchase 150,000 shares of the Company's common stock at $3.50 per share.
  These options vest ratably over a three-year period commencing on the first
  anniversary of employment.

  Mr. Donald C. Wright has agreed to serve as the Company's Vice President of
  Finance commencing on March 9, 1998. Pursuant to the terms of his employment
  agreement, Mr. Wright received a signing bonus of $25,000, will earn a base
  salary of $125,000 per year and will be eligible to earn performance
  incentive bonuses up to 50% of his base salary during the first 12 months of
  his employment based on criteria to be established by the Board of Directors.
  In addition, Mr. Wright was granted an option to purchase 150,000 shares of
  the Company's common stock at $3.50 per share.  These options vest ratably
  over a three-year period commencing on the first anniversary of employment.

  Long-Term Incentive Plan

  In 1996, the Company adopted the WorldPort Communications, Inc. Long-Term
  Incentive Plan (the "INCENTIVE PLAN") for employees and consultants of the
  Company as a means to promote the success and enhance the value of the
  Company through (i) linking the personal interests of its key employees and
  consultants to those of the shareholders, (ii) providing employees with an
  incentive for outstanding performance and (iii) providing the Company
  flexibility in its ability to attract and retain the services of its
  employees and contractors.  During 1997, the Company granted stock options
  under the Incentive Plan to acquire 610,000 shares of the Company's common
  stock with exercise prices ranging from $0.75 to $2.00 per share.  During
  1997, options to acquire 250,000 shares of the Company's common stock were
  forfeited.  As of March 30, 1998, the Company had granted 1,200,000 shares of
  restricted stock and options to acquire a total of 430,000 shares of common
  stock with exercise prices ranging from $0.08 to $3.50 per share under the
  Incentive Plan.


  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  Common Stock

  The following table sets forth all individuals known to beneficially own 5%
  or more of the Company's common stock, and all officers and directors of the
  Registrant, with the amount and percentage of stock beneficially owned as of


  March 30, 1998.

  <TABLE>
  <CAPTION>
                                                                                          AMOUNT AND NATURE
                                            NAME AND ADDRESS OF                             OF BENEFICIAL          PERCENT
                                            BENEFICIAL OWNER (1)                             OWNERSHIP            OF CLASS

                       <S>                                                                    <C>                   <C>
                       Phillip S. Magiera(2)                                                  5,006,282             24.09%

                       Paul A. Moore(3)                                                       4,953,354             23.90%

                       Theodore H. Swindells(4)                                               4,576,648             22.11%

                       Maroon Bells Capital Partners, Inc. (5) (6)                            3,876,282             18.72%

                       Anderlit, Ltd.(6)                                                      2,985,076             14.66%

                       Edmund H. Blankenau(8)                                                 1,860,602             10.67%

                       WorldPort Partners, LLC(7)                                             1,882,628              9.77%

                       United Overseas Bank(9)                                                1,670,000              9.61%

                       John W. Dalton(10)                                                     1,565,000              8.92%

                       Edward P. Mooney(11)                                                     165,000              0.94%

                       Peter A. Howley(12)                                                      139,628              0.80%

                       Robert L. McCann, Jr.                                                      -                    -

                       Officers and Directors as a Group (11 people) (2) (3) (8) (10)        10,268,584             47.76%
                       (11) (12) (13)

   ___________________
   (1)  Unless   otherwise  indicated,   the   address  of   the
        stockholder is that of the Company.

   (2)  Includes (i) all  shares beneficially owned by  MBCP and
        (ii) 80,000  shares which  are subject  to an option  to
        purchase  such shares  from  the  Company at  $0.75  per
        share.  Mr. Magiera is a Principal of MBCP.

   (3)  Includes (i) all  shares beneficially owned by  MBCP and
        (ii)  19,072  shares  issuable  upon  conversion of  the
        4,768  shares  of the  Company's  Series  B  Convertible
        Preferred Stock held  in the name of  Moore Investments.
        Mr.  Moore  is  a  Principal  of  MBCP  and  controlling
        stockholder of Moore Investments.

   (4)  Includes  all  shares  beneficially  owned  MBCP.    Mr.
        Swindells is a Principal of MBCP.

   (5)  Includes (i)  all shares beneficially owned by Anderlit,
        Ltd.;  (ii)  250,000  shares which  are  subject  to  an
        option  to purchase shares from the Company at $2.00 per
        share  and (iii) 84,540  shares issuable upon conversion
        of 21,135 shares  of the Company's Series  B Convertible
        Preferred Stock held in the  name of MBCP.  MBCP  is the
        majority investor  in Anderlit,  Ltd. and  votes all  of
        its  shares.     The   stockholder's   address  is   100
        California,   Suite  1160,   San  Francisco,  California
        94111.

   (6)  Includes shares  issuable  upon  conversion  of  746,269
        shares of  the Company's Series  B Convertible Preferred
        Stock.  The  stockholder's address is Palm  Chambers No.
        3,  P. O.  Box 3152, Road  Town, Tortola, British Virgin
        Islands.

   (7)  Includes shares  issuable  upon  conversion  of  470,657
        shares of  the Company's Series B  Convertible Preferred
        Stock.  The stockholder's address is 1999 Avenue  of the
        Stars, Suite 2340, Los Angeles, California 90067.

   (8)  Includes 1,000,000 shares  held in the name of  TNC held
        in escrow in  connection with the TNC  Acquisition which
        Mr.  Blankenau,  as  controlling  party of  the  General
        Partner of  TNC, controls  and 50,000  shares which  are
        subject to an  option to purchase such  shares from  the
        Company at $0.75 per share.

   (9)  The stockholder's address  is 11 Quai des  Bergues, 1211
        Geneve 1, Switzerland.

   (10) Includes  200,000  shares of  stock  currently  held  in
        escrow in  connection with the  Company's acquisition of
        The Wallace  Wade Company and  165,000 shares which  are
        subject  to options  to purchase  such  shares from  the
        Company  at  prices  ranging from  $0.75  to  $2.00  per
        share.

   (11) Includes 90,000 shares  which are subject to  options to
        purchase such shares from the Company  at prices ranging
        from $0.08 to $0.75 per share.

   (12) Includes 65,000 shares which are subject to an option to
        purchase such shares from the Company at $1.50 per share
        and 74,628 shares issuable upon conversion of 18,657 shares
        of the Company Series B Convertible Preferred Stock.

   (13) Includes 225,000 shares which are subject to options to
        purchase such shares from the Company at prices ranging
        from $0.75 to $1.75 per share.

  </TABLE>

  Series A Preferred Stock

  The following table sets forth all individuals known to beneficially own 5%
  or more of the Company's Series A Preferred Stock, and all officers and
  directors of the Registrant, with the amount and percentage of stock
  beneficially owned as of March 30, 1998.

  <TABLE>
  <CAPTION>
                                                                                          AMOUNT AND NATURE
                                            NAME AND ADDRESS OF                             OF BENEFICIAL           PERCENT
                                              BENEFICIAL OWNER                                 OWNERSHIP            OF CLASS

                       <S>                                                                      <C>                  <C>
                       Caisse Centrale des Banques Populaires(1)                               230,000              46.57%

                       Robert Hemm IRA(2)                                                      100,000              20.25%

                       Boston International Partners, L. P.(3)                                  81,945              16.59%

                       Boston International Partners, L. P. II (3)                              81,944              16.59%

                       Edmund H. Blankenau                                                        -                    -

                       John W. Dalton                                                             -                    -

                       Peter A. Howley                                                            -                    -

                       Phillip S. Magiera                                                         -                    -

                       Robert L. McCann, Jr.                                                      -                    -

                       Edward P. Mooney                                                           -                    -

    </TABLE>

  <TABLE>
  <CAPTION>
                                                                                          Amount and Nature
                                            Name and Address of                             of Beneficial           Percent
                                                Beneficial Owner                              Ownership            of Class

                       <S>                                                                       <C>                 <C>
                       Paul A. Moore                                                              -                    -

                       Officers and Directors as a Group (11 people)                              -                    -

   ___________________

   (1)  The  stockholder's  address  is   10/12  Avenue  Winston
        Churchill, 94677 Charenton Le Pont CEDEX, France.

   (2) The  stockholder's address  is c/o  Morgan Stanley &  Co.
       Incorporated, 1221  Avenue of  the Americas,  New York,  New
       York 10020.

   (3) The  stockholder's address  is 84  State Street,  Boston,
       Massachusetts 02109.


  </TABLE>

  Series B Preferred Stock

  The following table sets forth all individuals known to beneficially own 5%
  or more of the Company's Series B Convertible Preferred Stock, and all
  officers and directors of the Registrant, with the amount and percentage of
  stock beneficially owned as of March 30, 1998.

  <TABLE>
  <CAPTION>
                                                                                          AMOUNT AND NATURE
                                            NAME AND ADDRESS OF                             OF BENEFICIAL           PERCENT
                                                BENEFICIAL OWNER (1)                          OWNERSHIP            OF CLASS


                       <S>                                                                     <C>                   <C>
                       Paul A. Moore(2)                                                        772,172              36.56%

                       Maroon Bells Capital Partners, Inc. (3)                                 767,404              36.33%

                       Phillip S. Magiera(4)                                                   767,404              36.33%

                       Theodore H. Swindells(4)                                                767,404              36.33%

                       Anderlit, Ltd.(5)                                                       746,269              35.33%

                       WorldPort Partners, LLC(6)                                              470,657              22.88%

                       Fourteen Hill Capital(7)                                                167,910               7.95%

                       Woodlands Limited (8)                                                   143,912               6.81%

                       Peter A. Howley                                                          18,657               0.88%

                       Edmund H. Blankenau                                                        -                    -

                       John W. Dalton                                                             -                    -

                       Robert L. McCann, Jr.                                                      -                    -

                       Edward P. Mooney                                                           -                    -


                       Officers and Directors as a Group (11 people)                           790,829              37.44%

   ___________________

   (1)  Unless  otherwise   indicated,   the  address   of  the
        stockholder is that of the Company.

   (2)  Includes (i)  all shares beneficially  owned by MBCP and
        (ii)  4,768 shares  held in  the name  of Moore Investments.
        Mr.  Moore   is  a   Principal  of   MBCP  and   controlling
        stockholder of Moore Investments.

   (3)  Includes all shares owned by Anderlit, Ltd.  MBCP  is the
        majority investor  in Anderlit,  Ltd. and  votes all  of its
        shares.  The stockholder's address  is 100 California, Suite
        1160, San Francisco, California 94111.

   (4)  Includes all shares beneficially owned by MBCP.

   (5)  The stockholder's address is  Palm Chambers No. 3,  P. O.
        Box 3152, Road Town, Tortola, British Virgin Islands.

   (6)  The stockholder's address  is 1999  Avenue of the  Stars,
        Suite 2340, Los Angeles, California 90067.

   (7)  The  stockholder's  address  is 1700  Montgomery  Street,
        Suite 250, San Francisco, California 94111.

   (8)  The  stockholder's address  is  Africa House,  Woodborne
        Road, Douglas, Isle of Man, IM99-1AW, British Isles.

  </TABLE>

  ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  Three of the Company's directors and two of the Company's executive officers
  are either employees or principals of MBCP. The Company and MBCP have been
  parties to the transactions identified below.

  Stock Purchase Agreement

  On June 26, 1996 MBCP, its principals and certain non-affiliated investors
  entered into a stock purchase agreement to purchase newly-issued shares of
  the Company's common stock representing approximately 98.5% of the
  outstanding shares of the Company as of the date of the Agreement for
  $110,000 in cash.  Prior to the stock purchase agreement, the Company had no
  operations and little or no assets or liabilities.   Effective upon this
  change of control, the Company adopted a business strategy to enter the
  international telecommunications services industry. Subsequent to its initial
  investment in the Company, MBCP allocated substantial amounts of its own
  internal corporate resources to the development and implementation of the
  Company's overall operating strategy, including legal, travel and other
  expenses and the contribution to the Company of certain business development
  opportunities for which MBCP received no additional compensation from the
  Company.

  Consulting Agreements

  In July 1996, the Company entered into consulting agreements with Paul Moore,
  Theodore Swindells, Phillip Magiera, Edward Mooney and Jonathan Hicks (the
  "CONSULTANTS").  Messrs. Moore, Swindells and Magiera are principals of MBCP
  and Messrs. Hicks and Mooney are employees of MBCP. Pursuant to the
  consulting agreements, a total of 650,000 shares of the Company's common
  stock were earned by the Consultants for services rendered to the Company.
  On February 8, 1997, the Company filed a form S-8 registration statement with
  the Securities and Exchange Commission (Registration No. 333-21549) to
  register these 650,000 shares.

  Maroon Bells Capital Partners, Inc.'s Loan to the Company

  On July 1, 1996, MBCP loaned to the Company $500,000 the ("MBCP LOAN").  The
  MBCP Loan was collateralized by the Com Tech Note.   On October 15, 1996,
  $80,000 of the MBCP Loan, which had been assigned to two non-affiliated
  offshore entities, was converted into shares of the Company's common stock,
  resulting in the issuance of 1,000,000 shares of the Company's common stock.
  The remaining $420,000 principal amount due to MBCP was due and payable on
  November 1, 1996.  MBCP subsequently agreed to an extension of the maturity
  date of the MBCP Loan until April 1, 1997. As consideration for such an
  extension, the Company agreed to pay to MBCP all accrued interest under the
  MBCP Loan as of January 16, 1997.

  On March 7, 1997, MBCP and the Company entered into a Stock Issuance and
  Indemnification Agreement whereby MBCP agreed to (i) cancel the $420,000
  outstanding principal and all accrued, but unpaid, interest as of that date
  in exchange for 1,680,000 shares (the "INDEMNIFICATION SHARES") of the
  Company's common stock, (ii) indemnify the Company for an amount up to
  $460,000 (payable either in (a) cash, (b) the Indemnification Shares, (c) by
  return of other Company shares (based on $0.25 per share) or (d) a
  combination thereof, in the event that the Company is unsuccessful in
  securing repayment from the Com Tech Loan) and (iii) divide equally with the
  Company any proceeds, assets or other consideration in excess of $540,000
  received by the Company as a result of the enforcement of the Com Tech Loan.

  In September 1997, the Company entered into an arrangement with MBCP whereby
  MBCP would arrange for the Company to borrow from MBCP and certain of its
  affiliated 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 December 31, 1997, the Company had
  $1,556,250 in Bridge Notes outstanding.  See "SUBSEQUENT EVENTS".

  Advisory Agreements

  On October 31, 1996, the Company entered into an advisory agreement with an
  affiliate of MBCP.  The agreement provided among other things, that the
  affiliate would assist the Company in identification of potential merger or
  acquisition candidates, and assist in the development and implementation of a
  corporate financial strategy for which the Company would pay an advisory fee
  of up to $360,000 for services provided, when and if such services are
  completed in a manner satisfactory to the Company, payable no later than June
  30, 1997.  On January 14, 1997, the Company paid the affiliate $150,000 for
  actual services rendered.  No other amounts are owed under the advisory
  agreement at December 31, 1997.

  On March 7, 1997, the Company and MBCP entered into a twelve (12) month
  agreement (the "ADVISORY AGREEMENT") wherein MBCP agreed to provide certain
  services to the Company in exchange for (i) a monthly retainer of $10,000 and
  (ii) certain success fees payable when and if MBCP successfully assists the
  Company in certain transactions including, but not limited to, mergers and
  acquisitions.  As part of the Advisory Agreement, the Company agreed to
  reimburse MBCP for certain travel and out-of-pocket expenses incurred by MBCP
  on behalf of the Company.  On February 4, 1998, the Company amended the
  Advisory Agreement with MBCP to ensure the continuity of services during its
  expansion phase by renewing the Advisory Agreement for an additional twenty-
  four months with an expiration of March 7, 2000.  Under terms of the
  amendment, the Company agreed to grant MBCP five-year options to purchase
  250,000 shares of the Company's common stock at an exercise price of $2.00
  per share.

  Series B Convertible Preferred Stock Purchase

  In March 1998, Anderlit, Ltd., a privately-owned investment fund
  ("ANDERLIT"), purchased 746,269 shares of the Company's Series B Convertible
  Preferred Stock for an aggregate purchase price of $4,000,000.  Anderlit is
  an investment fund investing in a portfolio of emerging telecommunications
  companies.  MBCP is the majority investor in Anderlit, votes all of its
  shares and manages the fund's investment portfolio.  From time to time, MBCP
  has advised other shareholders with regards to investments in the Company.

  Other Related Party Transactions

  On July 3, 1997 the Company completed a merger of WWC into a wholly-owned
  subsidiary of the Company.  In connection with the WWC Acquisition, the
  Company delivered to Mr. John W. Dalton, the former President and Chief
  Executive Officer of the Company, who was the sole shareholder of WWC, (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 and (iii) a promissory note in the
  amount of $175,000.

  In connection with the TNC Acquisition, the Company executed an eighteen-
  month consulting agreement with Mr. Edmund H. Blankenau, the CEO of the
  General Partner of TNC who is also a director of the Company.   The agreement
  provides for monthly compensation in the amount of $7,000 plus reasonable
  expense reimbursement and incentive compensation for completed acquisitions
  and business opportunities to be determined on a case-by-case basis.

  The Company leases its facilities in Omaha, Nebraska from a partnership, in
  which Mr. Edmund H. Blankenau, one of the Company's directors, is a partner.
  The four-year lease agreement, which commenced July 1, 1997, provides for
  monthly payments in the amount of $8,992.


  Familial Relationships

  Mr. Spies, the Company's Treasurer and Controller, is the nephew of Mr.
  Dalton, the Company's former President and Chief Executive Officer.




                                      PART IV

  ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K


  (a)  Exhibits

                   Exhibit No.                Description

                       2.1       Agreement and  Plan of Merger by  and
                                 among    the    Company,    WorldPort
                                 Acquisitions, Inc.,  The Wallace Wade
                                 Company, and  John W.  Dalton,  dated
                                 April 20, 1997, previously filed with
                                 Form 8-K  dated  July  7,  1997,  and
                                 incorporated herein by reference.

                       2.2       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.

                       2.3       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.

                       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.

                       4.1       Certificate of  Designation of Series
                                 A  Preferred  Stock  of  the  Company
                                 dated November 12, 1997.

                       10.1      Financial Advisory Agreement  between
                                 the Company  and Dinton  Trader  S.A.
                                 dated  October  31,  1996, previously
                                 filed with Form 10-QSB for the fiscal
                                 quarter ended September 30, 1996, and
                                 incorporated herein by reference.

                       10.2      Loan   Agreement  between   Com  Tech
                                 International  Corporation  and   the
                                 Company   dated    June   27,   1996,
                                 previously filed with Form 10-QSB for
                                 the  fiscal  quarter  ended September
                                 30, 1996, and  incorporated herein by
                                 reference.

                       10.3      Assignment,    Pledge    &   Security
                                 Agreement    between     Com     Tech
                                 International  Corporation   and  the
                                 Company   dated    June   27,   1996,
                                 previously filed with Form 10-QSB for
                                 the  fiscal  quarter  ended September
                                 30, 1996, and  incorporated herein by
                                 reference.

                       10.4      Convertible Secured  Promissory  Note
                                 between the Company  and Maroon Bells
                                 Capital Partners, Inc.  dated July 1,
                                 1996, previously filed  with Form 10-
                                 QSB  for  the  fiscal  quarter  ended
                                 September 30,  1996, and incorporated
                                 herein by reference.




                   Exhibit No.                Description


                       10.5      Loan  Agreement  between  the Company
                                 and  Maroon  Bells  Capital Partners,
                                 Inc. dated July  1, 1996,  previously
                                 filed with Form 10-QSB for the fiscal
                                 quarter ended September 30, 1996, and
                                 incorporated herein by reference.

                       10.6      Assignment,   Pledge    &    Security
                                 Agreement  between  the  Company  and
                                 Maroon  Bells Capital  Partners, Inc.
                                 dated July 1,  1996, previously filed
                                 with  Form  10-QSB   for  the  fiscal
                                 quarter ended September 30, 1996, and
                                 incorporated herein by reference.

                       10.7      Secured  Promissory Note  between the
                                 Company  and  Com  Tech International
                                 Corporation  dated   June  27,  1996,
                                 previously filed with Form 10-QSB for
                                 the  fiscal  quarter  ended September
                                 30, 1996, and  incorporated herein by
                                 reference.

                       10.8      Maroon  Bells Capital  Partners, Inc.
                                 Advisory   Agreement   for  WorldPort
                                 Communications,  Inc. dated  March 7,
                                 1997, previously filed  with Form 10-
                                 KSB  for   the  fiscal   year   ended
                                 December  31, 1996,  and incorporated
                                 herein by reference.

                       10.9      Stock  Issuance  and  Indemnification
                                 Agreement by and between Maroon Bells
                                 Capital Partners,  Inc. and WorldPort
                                 Communications,  Inc. dated  March 7,
                                 1997, previously filed  with Form 10-
                                 KSB  for   the  fiscal   year   ended
                                 December  31, 1996,  and incorporated
                                 herein by reference.

                      10.10      Pledge Agreement,  Secured Promissory
                                 Note,  and  Guaranty  between  Edmund
                                 Blankenau and the Company dated April
                                 4, 1997, previously  filed with  Form
                                 10-KSB  for  the  fiscal  year  ended
                                 December  31, 1996,  and incorporated
                                 herein by reference.

                      10.11      Employment  Agreement by  and between
                                 John W. Dalton and the  Company dated
                                 April 8, 1997,  previously filed with
                                 Form 10-KSB for the fiscal year ended
                                 December  31, 1996,  and incorporated
                                 herein by reference.

                      10.12      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.

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






                   Exhibit No.                Description

                      10.14      Management Services  Agreement by and
                                 between   WorldPort   Communications,
                                 Inc. 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.

                      10.15      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.

                      10.16      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.

                      10.17      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.

                      10.18      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.

                      10.19      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.

                      10.20      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.

                      10.21      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.

                      10.22      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.

                      10.23      Promissory Note  by and  between  the
                                 Company and Cablex Electronique, Ltd.
                                 dated September  11, 1997, previously
                                 filed with Form 10-QSB for the fiscal
                                 quarter ended September 30, 1997, and
                                 incorporated herein by reference.





                   Exhibit No.                Description

                      10.24      Promissory  Note  by and  between the
                                 Company and  Le Chevalier Noir,  Ltd.
                                 dated September  11, 1997, previously
                                 filed with Form 10-QSB for the fiscal
                                 quarter ended September 30, 1997, and
                                 incorporated herein by reference.

                      10.25      Promissory  Note  by and  between the
                                 Company  and  Woodlands,  Ltd.  dated
                                 October  1,  1997,  previously  filed
                                 with  Form  10-QSB  for  the   fiscal
                                 quarter ended September 30, 1997, and
                                 incorporated herein by reference.

                      10.26      Promissory Note  by and  between  the
                                 Company  and   Maroon  Bells  Capital
                                 Partners, Inc. dated October 9, 1997,
                                 previously filed with Form 10-QSB for
                                 the  fiscal  quarter  ended September
                                 30, 1997, and  incorporated herein by
                                 reference.

                      10.27      Agreement   for   the   Provision  of
                                 Corporate     Voice     Communication
                                 Services   between   EQUANT   Network
                                 Services, Inc. and  the Company dated
                                 September  4, 1997,  previously filed
                                 with  Form  10-QSB   for  the  fiscal
                                 quarter ended September 30, 1997, and
                                 incorporated herein by reference.

                      10.28      Master  Equipment Lease  Agreement by
                                 and    between   the    Company   and
                                 Forsythe/McArthur   Associates,  Inc.
                                 dated  October  31,  1997, previously
                                 filed with Form 10-QSB for the fiscal
                                 quarter ended September 30, 1997, and
                                 incorporated herein by reference.

                      10.29      Lease Schedule  A by  and between the
                                 Company     and     Forsythe/McArthur
                                 Associates,  Inc.  dated  October 30,
                                 1997, previously filed  with Form 10-
                                 QSB  for  the  fiscal  quarter  ended
                                 September 30,  1997, and incorporated
                                 herein by reference.

                       16.1      Letter  of  Schumacher  & Associates,
                                 Inc.,  Independent  Certified  Public
                                 Accountant,  previously  filed   with
                                 Form  8-K  dated  July  7, 1997,  and
                                 incorporated herein by reference.

                       22.1      Notice of Annual  and Special Meeting
                                 of  Shareholders and  Proxy Statement
                                 dated September  18, 1996, previously
                                 filed with Form 10-QSB for the fiscal
                                 quarter ended September 30, 1996, and
                                 incorporated herein by reference.

                       23.1      Consent   of  Arthur   Andersen  LLP,
                                 Independent Public Accountants.

                       27.1      Financial Data Schedule


  (b)  No Current Reports on Form 8-K were filed during the last quarter of the
  period covered by this Report.





                                    SIGNATURES


  Pursuant to the requirements of Section 13 of 15(d) of the Securities
  Exchange Act of 1934, the Company has duly caused this Report to be signed on
  its behalf by the undersigned, thereunto duly authorized.

  Dated this 31st day of March, 1998

                                WORLDPORT COMMUNICATIONS, INC.



                                By   /s/

                                    Paul A. Moore

                                    Chairman of the Board of Directors and
                                    Chief Executive Officer

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
  report has been signed below by the following persons on behalf of the
  Company and in the capacities and on the dates indicated.



   Signature                  Capacity              Date




    /s/ Paul A. Moore         Chairman of the       March 31, 1998
   Paul A. Moore              Board of Directors
                              and Chief Executive
                              Officer
                              (Principal Executive
                              Officer)


   /s/ Phillip S. Magiera     Chief Financial       March 31, 1998
   Phillip S. Magiera         Officer, Secretary and
                              Director
                              (Principal  Financial
                              Officer)



   /s/ John W. Dalton         President             March 31, 1998
   John W. Dalton             Diversified  Services
                              and Director


   /s/ W. Dean Spies          Treasurer and         March 31, 1998
   W. Dean Spies              Controller
                              (Principal Accounting Officer)


   /s/ Edmund H. Blankenau    Director              March 31, 1998
   Edmund H. Blankenau


   /s/ Peter A. Howley        Director              March 31, 1998
   Peter A. Howley


   /s/ Edward P. Mooney       Director              March 31, 1998
   Edward P. Mooney