SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                                   (Mark One)

                Annual Report  Pursuant to Section 13 or 15(d) of the Securities
    [root]      Exchange  Act  of  1934 [Fee required] For the fiscal year ended
                December 31, 1996
---------------
                                            or
                Transition  Report  Pursuant  to  Section  13 or  15(d)  of  the
                Securities Exchange Act of 1934 [No fee required]
---------------
                For the Transition Period from __________ to __________

                        Commission File Number 33-32341-D

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

                              Sage Resources, Inc.
                          (Previous name of Registrant)


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

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

Issuer's telephone number: (281) 615-3233
Securities registered pursuant to Section 12(b) of the Act:
                           None
Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock
                                       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(b) 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      [root]            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. [ [root] ]

         The  Issuer's  revenues for its most recent  fiscal year were  $34,399,
consisting of interest income.

         The Issuer is unable to  calculate  the  aggregate  market value of the
common stock of the Registrant held by  nonaffiliates  because no market for the
common stock has yet developed.

         As of  December  31,  1996,  9,053,667  shares  of  common  stock  were
outstanding.

         Documents incorporated by reference: None.

                                   Transitional Small Business Disclosure Format
                                                   (Check one):

                                               Yes _______ No __X___






<PAGE>



                                     PART I

Item 1.           Description of Business

         General

         WorldPort  Communications,  Inc.  (the  "Company")  is a publicly  held
Delaware  corporation that is implementing a strategy to become an international
telecommunications   services   provider  through   strategic   acquisitions  of
telecommunications  companies and assets. 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.

         Recent Developments

         In March 1997,  the Company closed a private  placement  offering under
Regulation D (the  "Offering") of 3,333,333  shares of common stock at $0.75 per
share  pursuant to an offering  memorandum  dated  November 1, 1996. The Company
received  $2,500,000  of proceeds from the  Offering.  The Offering  granted the
investors  certain  demand  and  incidental  registration  rights.  The  Company
anticipates  using the proceeds from the Offering for possible  acquisitions and
for general working capital  purposes.  Prior to December 31, 1996,  $800,000 of
the proceeds were loaned to Global Star International,  Inc. ("GSI") pursuant to
a letter of intent for the  acquisition of GSI by the Company with an additional
$100,000  loaned in  January  1997 (the "GSI  Note").  On March 3,  1997,  final
negotiations  to acquire GSI were  terminated  and GSI repaid the loaned  amount
plus all accrued interest.

         On April 7, 1997 the Company  agreed to terms on a one year  employment
agreement  with Mr.  W. Dean  Spies to serve as the  Company's  Chief  Financial
Officer  and  Treasurer  commencing  on or before May 1, 1997.  See  "Employment
Agreements."  Concurrently,  Mr.  Jonathan  Hicks resigned as the Company's Vice
President and Treasurer.

         On April 8,1997, the Company  entered into an employment agreement with
Mr. John Dalton,  the Company's new President and Chief Executive  Officer.  See
"Employment Agreements."  Concurrently with the hiring of Mr. Dalton, Mr. Edward
Mooney resigned as the Company's President and Chief Executive Officer.

         On April 4, 1997 the Company entered into a Letter of Intent to acquire
substantially  all  of the  operating  assets,  liabilities  and  operations  of
Telenational    Communications    Ltd,    a   Nebraska    limited    partnership
("Telenational").   The   purchased   assets   are   expected   to   include   a
telecommunications  switch  and other  network  equipment,  customer  and vendor
contracts,  an FCC  section  214  license,  and other  assets  which the Company
believes will be sufficient (a) to continue the ongoing business of Telenational
and (b) to commence the Company's overall telecommunications operating strategy.
Telenational provides domestic and international long distance services and is a
switch-based reseller of interexchange carrier services.  Telenational currently
operates a  telecommunications  switch and operator  services platform in Omaha,
Nebraska.


         In  connection  with the  Letter  of  Intent,  the  Company  loaned  to
Telenational  $650,000  pursuant to a promissory note secured by a pledge of 80%
of the shares of the sole general partner of Telenational  and a guaranty by the
controlling  shareholder  of the general  partner of  Telenational  for the full
payment of the  principal  and  interest of the  promissory  note as well as all
costs and expenses of  collection  and  enforcement,  when and as the same shall
become  due and  payable,  pursuant  to the  terms of the  promissory  note (the



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<PAGE>



"Loan").  The  Letter of Intent is subject to  completion  of an asset  purchase
agreement that will contain certain representations and warranties and customary
closing  conditions.  There  can  be no  assurance  that  the  Company  will  be
successful in acquiring the assets of Telenational.

         Description of Business

         The  Company  is  currently  in  the  development   stage  and  has  no
significant  assets except for the proceeds from the Offering  discussed  above,
the GSI note,  and a note  receivable  from Com Tech  International  Corporation
("Com  Tech").  The  Company  anticipates  using a  significant  portion  of the
proceeds   of  the   Offering  to  acquire  a   telecommunications   company  or
telecommunications assets with which to commence its overall  telecommunications
strategy.

         The  Company  seeks to  identify  potential  acquisition  targets  with
long-term  growth  potential  and  strategic  positions in local,  regional,  or
international  telecommunication  services  markets.  At the present time, other
than the Telenational  letter of intent, the Company has no specific  agreements
with respect to future acquisitions,  but is continually investigating potential
acquisition prospects. See "Recent Developments."

         Strategy for Acquisitions and Business Development

         The Company's  strategy is to become a  facilities-based  international
telecommunications   service  provider  through  the  acquisition  of  operating
telecommunications  companies or strategic  telecommunications  assets, or both,
that will provide the Company  with the  capability  to (a) carry long  distance
traffic between points in the United States, between points in the United States
and points in foreign countries, and between international  destinations and (b)
offer  high-growth,  value-added  telecommunications  services  such as pre-paid
calling card services.

         The Company will primarily seek acquisition candidates that exhibit one
or more of the following  competitive  advantages:  (a) an  established  network
infrastructure  for voice and/or data transmissions  including,  but not limited
to, telecommunications  switches and fiberoptic or satellite routes for domestic
and international telecommunications traffic; (b) carrier, reseller or marketing
agreements  that enable the Company to generate  revenues by providing  services
over networks installed and operated by third parties;  (c) an existing customer
base consisting of: (i) other  telecommunications  carriers and companies,  (ii)
corporate  or  other  high  volume  customers,  and  (iii)  residential,   small
office/home office, mobile and other individual end-user customers; (d) valuable
governmental  licenses,   concessions  and  operating  agreements  with  foreign
carriers  and  other   agreements   enabling   the  Company  to  co-locate   its
telecommunications   equipment  or  to  interconnect  its  circuits  with  other
carriers;  (e) billing systems and other customer  service and support  systems;
and (f) experienced  executive and  operational  management,  particularly  with
proven experience in high growth  international  telecommunications  markets and
business segments.

         Once   the   Company   has   acquired   or   developed    its   initial
telecommunications  network  capabilities,  the Company's strategy is to rapidly
grow its business through both internal  business  development and acquisitions.
Specifically,  the Company will seek to (a) rapidly expand its sales through the
recruitment  and  management of marketing  agents able to originate  significant
traffic volumes for transport over the Company's network;  (b) acquire or deploy
switches and dedicated circuits between points where it has high traffic volumes
in order to maintain the highest level of service  quality while  maximizing its
margins; and (c) acquire additional  telecommunications  businesses that can add
significant  customer  bases,  positive  cash flow,  and  complementary  network
infrastructure.

         Through  one  or  more  acquisitions,  and  through  internal  business
development,   the  Company  seeks  to  position   itself  to  pursue   business
opportunities in niche markets in the United States and in international markets
where  deregulation  and  privatization  are  creating  opportunities  for early
competitive market entry.

         Depending upon,  among other things,  the  target  company's assets and

                                        3



<PAGE>



liabilities,  the Company's  shareholders  will in all likelihood  hold a lesser
percentage   ownership   interest  in  the  Company   following  any  merger  or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company  acquires a target company with  substantial  assets.  Any
merger  or  acquisition  effected  by the  Company  can be  expected  to  have a
significant  dilutive  effect on the  percentage of shares held by the Company's
then-shareholders.

         Management  anticipates  that the Company will have to seek  additional
financing in order to fully implement its acquisition and development  strategy.
See "Strategy for Acquisitions and Business Development."

         The Market Opportunity

         According to TeleGeography, a noted industry research organization, the
international  long distance  market grew from 15.6 billion  minutes per year in
1985 to 53.3  billion  minutes  per year in 1994,  representing  a 15%  compound
annual growth rate. The Company estimates that this  international long distance
market  currently  represents  over $50 billion in annual  revenues.  Initially,
through  acquisitions,  and later through  internal  business  development,  the
Company will likely focus its strategy on developing a presence in the U.S., the
United Kingdom,  Western Europe,  and Mexico,  which regions combine to generate
nearly 75% of all international long distance traffic.

         Competition

         The   Company  is  seeking   to  enter  the  U.S.   and   international
telecommunications  industry  through  one or  more  acquisitions  of  operating
companies   providing   telecommunications   services   such  as  domestic   and
international  long  distance  services.  When and if the  Company  acquires  an
operating  telecommunications company or telecommunications  equipment and other
assets required to provide long distance  services to customers,  it will likely
compete with  numerous  companies,  most of which may have assets and  resources
greater than those of the Company.

         The  telecommunications  industry  is  highly  competitive  and  market
participants  compete  primarily on the basis of price.  The U.S.  long distance
industry,  for  example,  has  relatively  insignificant  barriers  to entry for
resellers, numerous entities competing for the same customers and a high average
end-user attrition rate, as customers  frequently change long distance carriers.
Increasingly,  however,  other factors such as network  transmission quality and
responsiveness  to the service and  financial  needs of  customers  are becoming
important  aspects of  competitiveness  among carriers such as the Company.  The
Company  will seek to identify  acquisition  targets  whose size,  strategy  and
market position enable them to be extremely  flexible and responsive to customer
needs. The Company believes that flexibility and  responsiveness  may enable the
Company to pursue niche market opportunities and new customer relationships that
require  timely  provisioning  of  services  and  uniquely-structured   business
relationships.

         Employees

         The Company  presently has the following five  employees:  John Dalton,
its President and Chief Executive  Officer,  W. Dean Spies,  its Chief Financial
Officer and Treasurer, two administrative personnel, and Jonathan Y.
Hicks, who continues to serve as the Company's Corporate Secretary.

Item 2.           Description of Property

The Company  maintains  its offices at 9601 Katy  Freeway,  Suite 200,  Houston,
Texas 77024,  pursuant to a three-year  lease agreement dated April 9, 1997. The
Company's lease payment for the office space, which includes basic utilities, is
initially $2,000 per month, increasing to $3,906 per month after six months.


                                        4



<PAGE>



Item 3.           Legal Proceedings

         On November 8, 1996,  the Company  filed a lawsuit  against Com Tech in
the United States  District Court in the Northern  District of California  (Case
No. C-96-4055).  The Company filed the lawsuit to collect $500,000 plus interest
and attorney's  fees for amounts that Com Tech borrowed from the Company that is
now due,  owing and unpaid (the "Com Tech  Note").  On February  11,  1997,  the
Company filed and served a motion for summary  judgment  requesting the court to
enter  summary  judgment in the  Company's  favor,  and against Com Tech, on the
grounds that the Company loaned Com Tech $500,000, the maturity date of the loan
has passed,  and the principal and interest,  together with  attorney's fees and
costs in pursuing this action, are now due and owing.

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

         An annual and special  meeting of the  shareholders  of the Company was
held on September 30, 1996. At the meeting,  the  shareholders  approved (a) the
change of domicile and reincorporation of the Company from Colorado to Delaware,
(b) the adoption of the WorldPort Communications,  Inc. Long Term Incentive Plan
for employees and  consultants of the Company,  and (c) the election of Jonathan
Y.  Hicks,  Edward  P.  Mooney,  and  Daniel  P.  McGinnis  as the new  Board of
Directors.

         Effective  February 10, 1997, Mr.  McGinnis  resigned from the Board of
Directors and Mr.  Phillip S. Magiera was appointed to the Board of Directors to
serve  as an  interim  Director  until  the next  annual  meeting  or until  his
successor is elected and qualified.

                                     PART II

Item 5.           Market  for  Company's  Common  Equity and Related Stockholder
                  Matters

         (a) Market Information.  To  date,  no  market for the Company's common
stock has developed.

         (b) Holders.  The number of holders of record of the  Company's  common
stock as of March 25, 1997 was 50. This does not include  shareholders  who hold
stock in nominee or street name. As of March 25, 1997,  10,883,333 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.

Item 6.           Management's Discussion and Analysis or Plan of Operations.

         Plan of Operations

         The  Company is a  development  stage  company  that has not  generated
revenues  other than interest  income since  inception.  The  Company's  current
operations  consist  entirely of  identifying,  analyzing and  negotiating  with
suitable acquisition candidates in the U.S. and international telecommunications
industry.  The Company's  strategy is to develop its business through  strategic
acquisitions  of   telecommunication   services  companies.   Thus,   Management
anticipates  that  the  Company  will  not earn any  revenues  until  after  the
conclusion  of a merger or  acquisition,  if any.  Interest  income for the year
ended  December  31,  1996 was  $34,399  compared to $611 for the same period in
1995.  The increase was due to the interest from (a) the Com Tech Note which has


                                        5



<PAGE>



been  accrued but  currently  not yet been paid,  and (b) the GSI Note which was
paid in full subsequent to year end.

         Liquidity and Capital Resources

         In connection  with the Offering  described  above, as of year end, the
Company had  received  $2,387,750  in exchange  for  3,183,667  shares of common
stock.  See "Recent  Developments."  At year end, the Company had  approximately
$1,500,000 in working  capital,  not including  funds loaned to GSI.  Failure to
obtain  additional  sufficient  capital in the future could adversely affect the
Company's overall acquisition strategy.  Additionally, there can be no assurance
that the  Company  will be able to obtain  additional  financing  on  reasonable
terms, if at all.

         On July 1, 1996 the Company borrowed $500,000 from Maroon Bells Capital
Partners, Inc. (the "Maroon Bells Note") and loaned this amount to Com Tech. The
Maroon  Bells Note bore  interest  at 10% per annum,  was  collateralized  by an
assignment  of the Com Tech Note and was due on April 1,  1997.  On  October  3,
1996,  the Company was  notified by Maroon  Bells that it had  assigned  $80,000
principal  amount of the Maroon Bells Note,  to certain  nonaffiliated  entities
(the  "Assignees").  In March  1997,  the  Maroon  Bells Note was  cancelled  in
exchange for issuance of stock and certain  indemnifications.  See "Management's
Discussion and Analysis or Plan of Operations--Subsequent Events."

         On October 15, 1996, the Company negotiated a conversion of the $80,000
of assigned  debt in exchange for the  issuance of  1,000,000  shares of Company
common stock to the Assignees pursuant to Regulations S.

         The Com Tech Note was due October 26, 1996,  bears  interest at 10% per
annum and is collateralized  by an assignment of all rights,  title and interest
that Com Tech has  pursuant to a joint  venture  agreement  between Com Tech and
DataMax de Mexico,  S.A. de C.V.  The Com Tech Note is  currently in default and
represents a material credit risk. However, Maroon Bells has agreed to indemnify
the  Company  for losses  incurred  in  connection  with the Com Tech Note.  See
"Certain Relationships and Related Transactions." Failure to collect all or part
of the Com Tech  Note  and  accrued  interest  could  result  in a loss of up to
$500,000 plus interest and collection expenses.  The value of the collateral has
not been fully determined. The ultimate resolution of the matter and the related
loss, if any, cannot presently be determined. See "Legal Proceedings."

         On  July  15,  1996,  the  Company  entered  into  certain   consulting
agreements  with  various  consultants,  some  of  whom at the  time  were  also
shareholders of the Company,  in which the consultants  agreed to render certain
consulting  services in exchange for a total of 650,000  shares of common stock.
On October  1, 1996,  two of the  consultants,  Jonathan  Y. Hicks and Edward P.
Mooney,  were  appointed to serve as officers and  directors of the Company.  On
February  8,  1997,  the  Company  filed  a  Form  S-8  registration   statement
registering for resale 650,000 shares of common stock pursuant to the consulting
agreements.

         On October 31, 1996, the Company  entered into an agreement with Dinton
Trader S.A.  ("Dinton  Trader")  under which Dinton Trader will provide  certain
financial  advisory  services to the Company in exchange  for an advisory fee of
$360,000 payable no later than June 30, 1997.

         Subsequent Events

         On March 13, 1997, the Company closed the Offering of 3,333,333  shares
of common  stock at $0.75 per share  pursuant  to an offering  memorandum  dated
November 1, 1996. The Company received $2,500,000 of proceeds from the Offering,
all of which was  received  prior to year end,  except  for  $112,250  which was
received on March 13, 1997.  The Offering  granted the investors  certain demand
and incidental registration rights. See "Recent Developments."

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<PAGE>



         On March 7, 1997,  Maroon Bells agreed to cancel  $420,000 of principal
plus accrued  interest on certain debt and to indemnify the Company with regards
to the Com Tech Note in exchange for 1,680,000  shares of Company  common stock.
See "Certain Relationships and Related Transactions."

         Factors That May Affect Future Results

         There are a number of factors that may affect the future results of the
Company,  including,  but not limited to, (a)  difficulties  in identifying  and
acquiring  profitable  businesses,  (b)  the  Company  lacking  any  significant
operations or assets;  (c) the lack of a public market for the Company's  stock;
and (d) the Company's need to raise significant  future financing.  In addition,
the  telecommunications  industry is subject to national and worldwide  economic
and political influences such as recession and political instability.

         This annual report contains both historical  facts and  forward-looking
statements.  Any  forward-looking  statements  involve risks and  uncertainties,
including,  but not limited to, those mentioned above. Moreover,  future revenue
and margin trends cannot be reliably predicted.

Item 7.           Financial Statements

         Please see pages F-1 through F-15.

Item 8.           Changes  in  and  Disagreements With Accountants on Accounting
                  and Financial Disclosure

         There  have  been  no   disagreements   between  the  Company  and  its
independent  accountants on any matter of accounting  principles or practices or
financial statement disclosure.


                                    PART III

Item 9.           Directors, Executive Officers, and Control Persons

         The Directors and Officers of the Company are as follows:


       NAME               AGE       POSITION                    TENURE

John Dalton               49      President and    April 8, 1997 to Present
                                      Chief
                                    Executive
                                     Officer
Jonathan Y. Hicks         30         Director      September 30, 1996 to Present
Phillip S. Magiera        41         Director      February 10, 1997 to Present
Edward P. Mooney          37         Director      September 30, 1996 to Present
W. Dean Spies             30          Chief        April 7, 1997 to Present
                                    Financial
                                   Officer and
                                    Treasurer


                                        7



<PAGE>



         John Dalton - Mr.  Dalton  agreed to join the Company as its  President
and Chief  Executive  Officer,  effective  April 8, 1997.  From 1990 through the
present,  Mr.  Dalton has 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. In this position,  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 GSI.

         Jonathan Y. Hicks - Since October 1996,  Mr.  Hicks  has  served as the
Vice President,  Secretery,  Treasurer, and Director of the Company; however, as
of April 7, 1997,  Mr.  Hicks  serves  only as  Secretery  and  Director  of the
Company.  Since 1994,  Mr. Hicks has served as an  Associate  Director of Maroon
Bells Capital Partners,  Inc. ("Maroon Bells"),  an international  merchant bank
which  concentrates  on  the  financing  of  emerging   telecommunications   and
technology  businesses.  At Maroon  Bells,  Mr. Hicks  specializes  in strategic
analysis,  business planning and corporate  valuation,  with a focus on emerging
businesses in the United States and Latin America.  In 1993, Mr. Hicks served as
a market  analyst  at ARDIS,  a  wireless  data  operator  now  wholly  owned by
Motorola. Mr. Hicks joined Maroon Bells after completing a Masters of Management
at  Northwestern's  J.L.  Kellogg  Graduate School of Management  (1992 - 1994).
Between 1988 and 1992,  Mr. Hicks was involved in  international  trade  through
positions with Sea-Land Service, Inc., an international transportation operator,
and  Tradefin,  S.A.,  an Argentine  trading  company.  Mr.  Hicks  received his
bachelors degree from Georgetown University in 1988.

         Phillip S. Magiera - Since 1996,  Mr.  Magiera  has been a Principal of
Maroon  Bells.  Mr.  Mageria is the founder and former  president of the Applied
Telecommunications Technologies I-IV Funds which have invested over $100 million
of debt and equity in over thirty-five (35) emerging  telecommunications service
providers and  manufacturers in industries such as cellular service and Internet
access. Prior to founding the Applied Telecommunications  Technologies Fund, Mr.
Magiera was Vice  President of Fidelity  Ventures,  Inc., a wholly owned venture
capital subsidiary of Fidelity Investments.

         Edward P. Mooney - Since 1993,  Mr.  Mooney has served as an  Associate
Director of Maroon Bells. For Maroon Bells, Mr. Mooney  specializes in strategic
planning,  corporate valuations,  corporate governance,  and financial analysis.
From October 1996 to April 7, 1997,  Mr. Mooney served as the  President,  Chief
Executive Officer,  and Director of the Company.  However,  as of April 8, 1997,
Mr. Mooney serves only 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 was responsible for the
creation, development, financing and executive management of 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 which
advises investment funds, banks and other financial  institutions with regard to
asset  allocation,  portfolio  strategies and public policy  trends.  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.

         W.  Dean  Spies - Mr.  Spies  agreed to join the  Company  as its Chief
Financial  Officer  and  Treasurer,  effective  April 7,  1997.  From 1995 until
joining the Company,  Mr. Spies  served as Manager of  Financial  Reporting  for
American  REF-FUEL  Company,  where  he  was  responsible  for a wide  range  of
accounting  and financial  controls,  reporting and audits.  Prior to 1995,  Mr.
Spies served over six years with Arthur Andersen L.L.P. in Houston,  Texas, most
recently as a Manager. His areas of responsibility  included valuation analysis,
financial and business  modeling,  and all aspects of public  company  financial
reporting,  including SEC filings and related regulatory  compliance.  Mr. Spies
graduated  in 1989 from  Baylor  University  Summa Cum Laude with a Bachelor  of
Business  Administration  degree in  Accounting  and  Finance and is a Certified
Public Accountant.



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<PAGE>



Item 10. Executive Compensation

         Executive Compensation

         Edward P. Mooney and Jonathan Y. Hicks each  received  $1,250 per month
from the Company for management  services rendered to the Company until April 7,
1997.  Beginning  April 7,  1997,  Mr.  Hicks will  receive an annual  salary of
$15,000, Mr. Spies will receive an annual salary of $82,000, and Mr. John Dalton
will receive an annual salary of $156,000.  Effective  April 7, 1997, Mr. Mooney
resigned as President and Chief Executive Officer, but will continue to serve as
a Director of the Company.

         Board of Director Meetings and Committees

         The Board of Directors held seven (7) meetings  during 1996,  including
any and all written actions in lieu of a meeting.  All directors attended all of
the meetings of the Board.

         On March 27, 1997,  the  Company's  Board of Directors  established  an
Audit  Committee  and a  Compensation  Committee.  The  function  of  the  Audit
Committee  is to review the  results  and scope of the audit and other  services
provided  by  the  Company's  independent  auditors,  review  and  evaluate  the
Company's internal audit and control functions and monitor  transactions between
the Company and its  employees,  officers  and  directors.  The  function of the
Compensation Committee is to administer the Company's equity incentive plans and
designate compensation levels for officers and directors of the Company.

         Compensation Committee Interlocks and Insider Participation

         The  members  of  the  Compensation Committee of the Company's Board of
Directors  are  Messrs.  Mooney  and  Magiera.  Mr.  Magiera  is a  non-employee
director.  Until April 8, 1997, Mr. Mooney was the President and Chief Executive
Officer,  whose compensation was $15,000 per year.  Beginning April 8, 1997, Mr.
Mooney  will  serve on the  Compensation  Committee  of the  Company's  Board of
Directors as a non-employee director.

         On March 27, 1997, the Board of Directors  granted each director 50,000
stock options and 15,000 stock options for each board  committee  upon which the
director served, all of which shares have an exercise price of $0.75 per share.



                                        9



<PAGE>



         Summary Compensation Table

         The following table sets forth the aggregate cash  compensation paid by
the Company for services  rendered during the last three years to the Company by
its  Chief  Executive  Officer  and to each  of the  Company's  other  executive
officers whose annual salary, bonus and other compensation  exceeded $100,000 in
1996.

<TABLE>
<CAPTION>

                                                       Annual Compensation                 Long-Term Compensation
                                                       -------------------                 ----------------------
                                                                                              Awards            Payouts
                                                                                              ------            -------
                                                                           Other
                                                                          Annual      Restricted
                                                                          Compen-        stock      Options/     LTIP
                                                                          sation       Award(s)       SARs      Payouts
     Name and Principal Position      Year    Salary ($)    Bonus ($)     ($)(1)         ($)          (#)        ($)
     ---------------------------      ----    ----------    ---------     ------      ----------    --------    -------- 
<S>                                   <C>      <C>          <C>           <C>           <C>        <C>          <C>
Edward P. Mooney
   President and CEO                  1996     $ 2,500      $ 2,500       $   ---       $   ---    25,000       $   ---
</TABLE>

-------------------
(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. John Dalton.  See  "Employment  Agreements" and "Certain  Relationships  and
Related Transactions."


         Compensation of Directors

         During the 1996 fiscal year,  directors who were also Company employees
received no additional or special  remuneration  for serving as directors  other
than out-of-pocket expenses, if any, for each meeting of the Board of Directors.
Beginning March 27, 1997, all directors of the Company,  including  non-employee
directors and employee directors, will receive stock options.



                                       10



<PAGE>



         Employment Agreements

         Until April 7, 1997,  the Company had employment agreements with Edward
P. Mooney and  Jonathan Y. Hicks,  which were  effective  as of October 7, 1996.
Pursuant to these  agreements,  the Company paid $1,250 per month to Mr.  Mooney
and to Mr.  Hicks for  management  services,  beginning  November  1, 1996.  The
Company  paid Mr.  Mooney  and Mr.  Hicks an initial  bonus of $2,500  each upon
execution of the  employment  agreements.  Effective  April 7, 1997,  Mr. Mooney
resigned as President  and Chief  Executive  Officer of the Company.  Mr. Hicks'
employment agreement is still effective with an annual salary of $15,000.

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

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

         The Company has no other employment agreements.

         Long-Term Incentive Plan

         On October 1, 1996, the Company  adopted the WorldPort  Communications,
Inc.  Long-Term   Incentive  Plan  (the  "Incentive  Plan")  for  employees  and
consultants  of the Company.  The Company will use the Incentive Plan as a means
to promote the success and enhance the value of the Company  through (a) linking
the personal  interests of its key  employees  and  consultants  to those of the
shareholders,   (b)  providing  employees  with  an  incentive  for  outstanding
performance, and (c) providing the Company flexibility in its ability to attract
and retain the services of its employees  and  contractors.  The Incentive  Plan
authorizes grants of Incentive Stock Options, Non-qualified Stock Options, Stock
Appreciation  Rights,   Restricted  Stock,   Performance  Shares,  and  Dividend
Equivalents.  The Company has reserved  2,000,000 shares of the Company's common
stock for use as grants under the  Incentive  Plan.  As of March 25,  1997,  the
Company had issued stock  options  under the  Incentive  Plan to acquire  50,000
shares of common stock.



                                       11



<PAGE>



Item 11. Security Ownership of Certain Beneficial Owners and Management

         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 25, 1997.

                                                       Amount and
          Name and Address                           Nature of Bene-    Percent
         of Beneficial Owner                         ficial Ownership  of Class
Maroon Bells Capital Partners, Inc.                     2,280,000       20.59%
United Overseas Bank                                    1,670,000       15.34%
Theodore H. Swindells1                                    766,666        7.04%
DuLac Consultants, Ltd.                                   700,000        6.43%
BNP International Financial Services                      667,000        6.13%
Paul A. Moore1                                            500,000        4.59%
Phillip S. Magiera1                                       300,000        2.76%
Jonathan Y. Hicks2                                         50,000        0.46%
Edward P. Mooney3                                          50,000        0.46%

Officers and Directors as
a Group 1,2,3                                             400,000        3.66%




--------
         1Excludes 2,280,000 shares held by Maroon Bells Capital Partners, Inc.,
of which Messrs.  Swindells,  Moore, and Magiera disclaim beneficial  ownership.
Messrs.  Swindells,  Moore,  and Magiera are the sole principals of Maroon Bells
Capital Partners, Inc.
         2Includes 25,000 shares which are subject to an option to purchase such
shares from the Company at $0.08 per share.
         3Includes 25,000 shares which are subject to an option to purchase such
shares from the Company at $0.08 per share.

                                       12



<PAGE>



Item 12. Certain Relationships and Related Transactions

         All of the  Company's  directors  and  Jonathan  Y.  Hicks  are  either
employees or affiliates of Maroon Bells.  The Company and Maroon Bells have been
parties to the transactions identified below.

         Stock Purchase Agreement

         On June  26,  1996,  Maroon Bells,  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,  Maroon  Bells  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 Maroon Bells received no additional compensation from the Company.

         Office Space

         From October 1, 1996 until April 10, 1997,  the Company  maintained its
offices in space provided at no charge to the Company by Maroon Bells,  pursuant
to a  month-to-month  agreement,  at 100  California  Street,  Suite  1400,  San
Francisco,  California  94111.  The Company paid no rental or lease payments for
the office space, basic telephone expenses, supplies or utilities.

         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
Maroon  Bells  and  Messrs.  Hicks  and Mooney are  employees  of Maroon  Bells.
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, 1997,  Maroon Bells loaned to the Company $500,000  pursuant
to the Maroon Bells Loan.  The Maroon Bells Loan was  collateralized  by the Com
Tech Note. On October 15, 1996, $80,000 of the Maroon Bells 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 Maroon
Bells was due and payable on November 1, 1996. Maroon Bells subsequently  agreed
to an  extension  of the  maturity  date of the Maroon Bells Loan until April 1,
1997.  As  consideration  for such an  extension,  the Company  agreed to pay to
Maroon Bells all accrued  interest under the Maroon Bells Loan as of January 16,
1997.

         On March 7, 1997,  Maroon  Bells and the Company  entered  into a Stock
Issuance and Indemnification Agreement whereby Maroon Bells agreed to (a) 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,  (b) indemnify the Company for an amount up to $460,000
(payable either in (i) cash, (ii) the Indemnification Shares, (iii) by return of
other Company shares (based on $0.25 per share), or (iv) a combination  thereof,
in the event that the Company is unsuccessful in securing repayment from the Com
Tech Loan, and (c) 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.  Maroon  Bells also  agreed to refrain  from
transferring  or  selling  the  Indemnification  Shares  until  such time as the
disposition of the Com Tech Loan is determined.


                                       13



<PAGE>



         Management

         Edward P. Mooney,  the  Company's  former  Chief  Executive Officer and
President,  is an employee of Maroon  Bells.  Jonathan Y. Hicks,  the  Company's
former Vice  President  and  Treasurer  and current  Secretary is an employee of
Maroon  Bells.  Mr.  Mooney and Mr. Hicks  continue to serve as directors of the
Company.

         On October 10, 1996, Mr. Mooney and Mr. Hicks were each granted options
to purchase 25,000 shares of the Company's  common stock at an exercise price of
$0.08 per share.  On February 10, 1997,  Phillip S. Magiera  joined the Board of
Directors of the Company to fill a vacancy  created by the resignation of Daniel
McGinnis. Mr. Magiera is a principal of Maroon Bells.

         Advisory Agreements

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

         Familial Relationships

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


                                     PART IV

Item 13. Exhibits and Reports on Form 8-K


         (a)      Exhibits
<TABLE>
<CAPTION>


  Exhibit No.                              Description                                 Location
  -----------                              -----------                                 --------
<S>   <C>        <C>                                                                   <C>
      3.1        Certificate of Incorporation for WorldPort Communications,            1
                 Inc.,  previously filed with Form 10-QSB for the fiscal quarter
                 ended September 30, 1996, and incorporated herein by reference.
      3.2        Bylaws of WorldPort Communications, Inc., previously                  1
                 filed with Form 10-QSB for the fiscal quarter ended
                 September 30, 1996, and incorporated herein by reference.
      10.1       Financial Advisory Agreement between the Registrant and               1
                 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.
</TABLE>


                                       14



<PAGE>


<TABLE>
<CAPTION>

  Exhibit No.                              Description                                 Location
  -----------                              -----------                                 --------
<S>   <C>        <C>                                                                   <C>
      10.2       Loan Agreement between Com Tech International                         1
                 Corporation and the Registrant 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                   1
                 Tech International Corporation and the Registrant 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                       1
                 Registrant 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.
      10.5       Loan Agreement between the Registrant and Maroon Bells                1
                 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                   1
                 Registrant 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 Registrant and Com                1
                 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            1
                 WorldPort Communications, Inc. dated March 7, 1997.
      10.9       Stock Issuance and Indemnification Agreement by and                   1
                 between Maroon Bells Capital Partners, Inc. and WorldPort
                 Communications, Inc. dated March 7, 1997.
     10.10       Pledge Agreement, Secured Promissory Note, and Guaranty               1
                 between Edmund Blankenau and the Registrant dated April
                 4, 1997.
     10.11       Letter Agreement by and between W. Dean Spies and the                 1
                 Registrant dated April 7, 1997.
</TABLE>


                                       15



<PAGE>


<TABLE>
<CAPTION>

  Exhibit No.                              Description                                 Location
  -----------                              -----------                                 --------
<S>  <C>         <C>                                                                   <C>
     10.12       Employment Agreement by and between John Dalton and                   1
                 the Registrant dated April 8, 1997.
      22.1       Notice of Annual and Special Meeting of Shareholders and              1
                 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 Schumacher & Associates, Inc., Independent                 1
                 Certified Public Accountant.
       27        Financial Data Schedule                                               1
</TABLE>

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



                                       16



<PAGE>



                                   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 15th day of April, 1997

                                       WORLDPORT COMMUNICATIONS, INC.


                                       By  /s/John Dalton
                                           -------------------------------------
                                           John Dalton
                                           President 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/John Dalton
----------------------    President, Chief Executive Officer     April 15, 1997
John Dalton               (Principal Executive Officer)


/s/Edward P. Mooney
----------------------    Director                               April 15, 1997
Edward P. Mooney


/s/Jonathan Y. Hicks
----------------------    Director and Secretary                 April 15, 1997
Jonathan Y. Hicks         


/s/Phillip S. Magiera
----------------------    Director                               April 14, 1997
Phillip S. Magiera


/s/W. Dean Spies
----------------------    Chief Financial Officer and            April 15, 1997
W. Dean Spies             Treasurer (Principal Financial
                          Officer and Principal Accounting
                          Officer).
                                       17
<PAGE>

                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS
                                      with
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



                           December 31, 1996 and 1995





                                                                            Page

Financial Statements:

         Report of Independent Certified Public
          Accountants                                                        F-2

         Balance Sheet                                                       F-3

         Statements of Operations                                            F-4
 
         Statement of Stockholders' Equity                                   F-5

         Statements of Cash Flows                                            F-7

         Notes to Financial Statements                                       F-8


                                       F-1

<PAGE>




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



The Board of Directors
WorldPort Communications, Inc. (A Development Stage Company)
San Francisco, California

We have audited the accompanying balance sheet of WorldPort Communications, Inc.
(A  Development  Stage  Company)  as of  December  31,  1996,  and  the  related
statements of operations,  stockholders' equity and cash flows for the two years
then ended and from inception to December 31, 1996.  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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of WorldPort Communications,  Inc.
(A  Development  Stage  Company) as of December  31, 1996 and the results of its
operations,  changes in its stockholders'  equity and its cash flows for the two
years then ended  December 31, 1996 and 1995, and from inception to December 31,
1996 in conformity with generally accepted accounting principles.



                                    Schumacher & Associates, Inc.
                                    Certified Public Accountants
                                    12835 E. Arapahoe Road, Tower II, Suite 110
                                    Englewood, CO 80112


March 27, 1997








                                       F-2

<PAGE>




                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                December 31, 1996
<TABLE>
<CAPTION>

                                     ASSETS                                     

Current Assets:
<S>                                                                               <C>       
  Cash                                                                            $1,552,829
  Note receivable (Notes 2 and 6)                                                    800,000
  Other                                                                                6,329
                                                                                  ----------
      Total Current Assets                                                         2,359,158

Other Assets:
  Note receivable, including accrued
   interest (Note 6)                                                                 527,806
  Deferred offering costs (Note 9)                                                     2,068
                                                                                  ----------
      Total Assets                                                                $2,889,032
<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
<S>                                                                               <C>       
  Accounts payable                                                                $   75,936
  Accrued interest payable (Note 2)                                                   23,706
  Other                                                                                  100
                                                                                  ----------
      Total Current Liabilities                                                       99,742

Note payable (Notes 2 and 6)                                                         420,000
                                                                                  ----------
      Total Liabilities                                                              519,742
                                                                                  ----------

Stockholders' Equity (Note 10):
  Preferred stock, $.0001 par value,
      10,000,000 shares authorized,
      none issued and outstanding                                                          -
  Common Stock, $.0001 par value,
   65,000,000 shares authorized,
   9,053,667 shares issued and
   outstanding                                                                           905
  Additional paid-in capital                                                       2,664,291
  Deficit accumulated during
    development stage                                                               (295,906)

Total Stockholders' Equity                                                         2,369,290

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

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

                                       F-3

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                             January 6,
                                                                                               1989
                                                             Year             Year          (Inception)
                                                             ended            ended             to
                                                           December         December          December
                                                           31, 1996         31, 1995          31 ,1996

Revenue:
<S>                                                      <C>             <C>                <C>       
      Interest income                                    $   34,399      $       611        $   40,871
                                                         ----------      -----------        ----------

Operating Expenses:
      Consulting fees, related party                        110,000                -           110,000
      Stock issued for consulting fees                       36,740                -            36,740
      Legal and accounting                                  105,461            2,540           120,065
      Interest                                               23,706                -            23,706
      Salaries                                               10,000                -            10,000
      Rent (Note 2)                                           1,000            3,000            20,750
      Travel                                                      -            1,832             3,292
      Other                                                   7,390              271            12,224
                                                         ----------      -----------        ----------
Total Operating Expenses                                    294,297            7,643           336,777
                                                         ----------      -----------        ----------

Net (Loss)                                               $ (259,898)      $   (7,032)       $ (295,906)
                                                         ==========       ==========        ==========

Per Share                                                $     (.11)      $     (.12)       $     (.86)
                                                         ==========       ==========        ==========

Weighted Average Shares Outstanding                       2,358,334           60,000           344,003
                                                         ==========       ==========        ==========
</TABLE>







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

                                       F-4

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                                                                              Deficit
                                                                                            Accumulated
                                                     Common Stock           Additional        During
                                             -------------------------        Paid-in        Development
                                              Shares           Amount         Capital          Stage               Total
                                             --------         --------     -------------   -------------      -------------

<S>                                           <C>             <C>           <C>             <C>                <C>        
Balances at inception January 6, 1989                -        $      -      $        -      $         -        $         -

Issuance of stock to officers and
 directors January, 1989 (note 3)
 for cash ($.005 per share)                     40,000             200               -                -                200

Issuance of stock April, 1989
 for cash ($1.00 per share)                      8,000           8,000               -                -              8,000

Net loss for period ended
 December 31, 1989                                   -               -               -           (1,551)            (1,551)
                                             ---------        --------      ----------       ----------         ----------
Balance at December 31, 1989                    48,000           8,200               -           (1,551)             6,649

Issuance of stock in public
 offering, net of expenses
 of $17,653                                     12,000          42,347               -                -             42,347

Net (loss) for year ended
 December 31, 1990                                   -               -               -           (4,398)            (4,398)
                                             ---------       ---------     -----------      -----------         ----------
Balance at December 31, 1990                    60,000          50,547               -           (5,949)            44,598

Net (loss) for year ended
 December 31, 1991                                   -               -               -           (4,670)            (4,670)
                                             ---------       ---------     -----------      -----------         ----------
Balance at December 31, 1991                    60,000          50,547               -          (10,619)            39,928

Net (loss) for year ended
 December 31, 1992                                   -               -               -           (5,281)            (5,281)
                                             ---------       ---------     -----------      -----------         ----------
Balance at December 31, 1992                    60,000          50,547               -          (15,900)            34,647

Net (loss) for year ended
 December 31, 1993                                   -               -               -           (5,644)            (5,644)
                                             ---------       ---------     -----------      -----------         ----------
Balance at December 31, 1993                    60,000          50,547               -          (21,544)            29,003

Net (Loss) for year ended
 December 31, 1994                                   -               -               -           (7,432)            (7,432)
                                            ----------     -----------   -------------      -----------         ----------
Balance at December 31, 1994                    60,000          50,547               -          (28,976)            21,571

Net (Loss) for year ended
 December 31, 1995                                   -               -               -           (7,032)            (7,032)
                                            ----------     -----------   -------------      -----------         ----------
Balance at December 31, 1995                    60,000          50,547               -          (36,008)            14,539

Reorganization, October 1, 1996                      -         (50,541)         50,541                -                  -

Issuance of stock June, 1996
 for cash ($.0275 per share)                 4,000,000             400         109,600                -            110,000

Issuance of stock July, 1996
 for services ($.0275 per share)               160,000              16           4,384                -              4,400

Issuance of stock July, 1996
 for services ($.05 per share)                 650,000              65          32,435                -             32,500

Issuance of stock October, 1996
 for cash ($.08 per share)                   1,000,000             100          79,900                -             80,000

</TABLE>


                                       F-5

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                                                                             Deficit
                                                                                           Accumulated
                                                   Common Stock            Additional         During
                                             -------------------------       Paid-in       Development
                                               Shares         Amount         Capital          Stage               Total
                                             ---------     -----------    ------------     ------------         ---------- 


<S>                                          <C>           <C>             <C>              <C>                 <C>
Issuance of stock November, 1996 
 for cash ($.75 per share)                     446,667              45         334,955                -            335,000

Issuance of stock December, 1996
 for cash ($.75 per share)                   2,737,000             273       2,052,476                -          2,052,749

Net (Loss) for year ended
 December 31, 1996                                   -               -               -         (259,898)          (259,898)
                                            ----------     -----------   -------------      -----------         ----------
Balance at December 31, 1996                 9,053,667     $       905   $   2,664,291      $  (295,906)        $2,369,290
                                            ==========     ===========   =============      ===========         ==========

</TABLE>







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

                                       F-6

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                            January 6,
                                                                                              1989
                                                                                           (Inception)
                                                          Year ended       Year ended          to
                                                            December         December        December
                                                           31, 1996         31, 1995         31, 1996
                                                          ----------       ----------       ---------


Cash flows from operating activities:
<S>                                                       <C>               <C>            <C>        
 Net (Loss)                                               $ (259,898)       $  (7,032)     $ (295,906)
 Adjustments to reconcile net (loss) to net
  cash used by operating activities:
   Amortization                                                    -                -             200
   Changes in liabilities:
    (Increase) in accrued interest receivable                (34,135)               -         (34,135)
    Increase (decrease) in accounts payable
     and accrued expenses                                     97,674           (1,334)         97,674
                                                          ----------       ----------      ----------
Net Cash (Used in) Operating Activities                     (196,359)          (8,366)       (232,167)
                                                          ----------       ----------      ----------

Cash flows from investing activities:
 Investment in notes receivable                           (1,300,000)               -      (1,300,000)
 Organization costs                                                                 -            (200)
                                                          ----------       ----------      ----------
Net Cash (Used in) Investing Activities                   (1,300,000)                      (1,300,200)
                                                          ----------       ----------      ----------

Cash flows from financing activities:
 Proceeds from note payable                                  500,000                -         500,000
 Proceeds from issuance of common stock                    2,534,649                -       2,602,849
 Deferred offering costs                                           -                -         (17,653)
                                                          ----------       ----------      ----------
Net Cash Provided by Financing Activities                  3,034,649                        3,085,196
                                                          ----------       ----------      ----------

Net increase (decrease) in cash
 and cash equivalents                                      1,538,290           (8,366)      1,552,829

Cash at Beginning of Period                                   14,539           22,905               -
                                                          ----------       ----------      ----------

Cash at End of Period                                     $1,552,829       $   14,539      $1,552,829
                                                          ==========       ==========      ==========

Interest Paid                                             $        -       $        -      $        -
                                                          ==========       ==========      ==========

Income Taxes Paid                                         $        -       $        -      $        -
                                                          ==========       ==========      ==========
</TABLE>

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

                                       F-7

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This   summary  of   significant   accounting   policies  of  WorldPort
         Communications,  Inc. (formerly Sage Resources, Inc.) (Worldport or the
         Company)  is  presented  to  assist  in  understanding   the  Company's
         financial   statements.   The  financial   statements   and  notes  are
         representations  of the Company's  management  who is  responsible  for
         their integrity and objectivity.  These accounting  policies conform to
         generally  accepted  accounting  principles and have been  consistently
         applied in the preparation of the financial statements.

         Organization

         The  Company  is  a  publicly   held  Delaware   corporation   that  is
         implementing a strategy to become an  international  telecommunications
         service provider through strategic  acquisitions of  telecommunications
         companies and assets. 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. The
         Company's current strategy is to develop its business through strategic
         acquisitions of telecommunication services companies.

         The Company is currently in  development  stage.  As such,  there are a
         number of factors  that may affect the future  results of the  Company,
         including,  but not  limited to (a)  difficulties  in  identifying  and
         acquiring   profitable   businesses,   (b)  the  Company   lacking  any
         significant  operations or assets,  (c) the lack of a public market for
         the Company's  stock,  and (d) the Company's need to raise  significant
         future  financing.  In  addition,  the  telecommunications  industry is
         subject to national and  worldwide  economic and  political  influences
         such as recession and political instability.

         Organizational Costs

         Organizational  costs are being amortized on a straight-line basis over
         five years.





                                       F-8

<PAGE>





                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
         CONTINUED

         Deferred Offering Costs

         The Company has incurred  offering costs in connection with an offering
         memorandum (Note 9). Upon successful completion of the offering,  these
         costs will be charged as a reduction of the offering proceeds.

         Cash and Cash Equivalents

         For purposes of the Statements of Cash Flows, the Company considers all
         highly  liquid  debt  instruments  purchased  with a maturity  of three
         months or less to be cash equivalents.

         Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make 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 and the reported  amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from those estimates.

         Fair Value of Financial Instruments

         The  carrying  amount  approximates  fair value of cash and  short-term
         financial  instruments (all of which are held for nontrading purposes).
         The Company has no long-term financial instruments.

         Concentrations of Credit Risks

         Financial   instruments  that   potentially   subject  the  Company  to
         concentrations  of credit risk consist  principally  of temporary  cash
         investments  and cash  equivalents and trade accounts  receivables.  At
         December  31,  1996,  the Company had  $1,552,829  of its cash and cash
         equivalents in financial  institutions,  all but $100,000 of which were
         in excess of amounts  insured by agencies of the U.S.  Government.  All
         secured  notes  receivable  are from  companies  where the  Company had
         entered  into letters of intent for  acquisition  which are involved in
         the telecommunication industry.

                                       F-9

<PAGE>





                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

2.       RELATED PARTY TRANSACTIONS

         All of the Company's  officers and  directors  are either  employees or
         affiliates  of Maroon Bells  Capital  Partners,  Inc.  (Maroon  Bells).
         WorldPort   and  Maroon  Bells  have  been  parties  to  the  following
         transactions and/or agreements:

         Stock Purchase Agreement. On June 25, 1996, Maroon Bells entered into a
         stock  purchase  agreement  to purchase  4,000,000  shares of WorldPort
         common stock for an aggregate purchase price of $110,000.

         Maroon Bells Loan to WorldPort.  On July 1, 1996 Maroon Bells loaned to
         WorldPort  $500,000  pursuant to a  promissory  note (the Maroon  Bells
         Note).  The Maroon Bells Note was  collateralized  by a promissory note
         between WorldPort and Com Tech International Corp. (the Com Tech Note).
         On October 3, 1996,  the Company was  notified by Maroon  Bells that it
         had assigned  $80,000  principal  amount of the Maroon  Bells Note,  to
         certain non affiliated entities (the Assignees).

         On October  15,  1996,  $80,000  of the  Maroon  Bells Note held by the
         Assignees  was  converted  into  shares  of  WorldPort   common  stock,
         resulting  in the  issuance of  1,000,000  shares of  WorldPort  common
         stock.

         The remaining $420,000 principal amount due to Maroon Bells was due and
         payable  November 1, 1996.  Beginning  on October 31, 1996 Maroon Bells
         agreed to  extensions  of the  maturity  date of the Maroon Bells Note,
         including an agreement  between  Maroon Bells and  WorldPort on January
         16, 1997 whereby Maroon Bells agreed to extend the maturity date of the
         Maroon  Bells Note until April 1, 1997.  As  consideration  for such an
         extension, WorldPort agreed to pay to Maroon Bells all accrued interest
         under the Maroon Bells Note as of January, 1997.

         On March 7,  1997  Maroon  Bells  and  WorldPort  entered  into a Stock
         Issuance and Indemnification  Agreement whereby (a) Maroon Bells agreed
         to cancel the $420,000 outstanding principal and all accrued but unpaid
         interest  as of  that  date  in  exchange  for  1,680,000  shares  (the
         "Indemnification  Shares") of WorldPort  common stock, (b) Maroon Bells
         agreed to indemnify WorldPort for an amount up to $460,000 in cash, the
         Indemnification  Shares or other  WorldPort  shares  (based on $.25 per
         share),  or a  combination  thereof,  in the event  that  WorldPort  is
         unsuccessful in securing repayment from the Com

                                      F-10

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

2.       RELATED PARTY TRANSACTIONS, CONTINUED

         Tech Note, and (c) Maroon Bells and WorldPort  agreed to divide equally
         any proceeds,  assets or other consideration received by WorldPort as a
         result of the Com Tech Note in excess of $540,000.  Maroon Bells agreed
         to refrain  from  transferring  or selling the  Indemnification  Shares
         until such time as the disposition of the Com Tech Note is determined.

         Management Agreements. Mr. Edward Mooney (the Company's Chief Executive
         Officer, President and Director) and Mr. Jonathan  Hicks (the Company's
         Vice President, Secretary and Treasurer) are  employees of Maroon Bells
         and  each  also  hold employment agreements with WorldPort whereby they
         are  each  paid  $1,250  per month for providing management services to
         WorldPort.  These agreements expire on October 1, 1997.  Mr. Mooney and
         Mr.  Hicks  were  each  granted  options  to  purchase 25,000 shares of
         WorldPort  common  stock  during  1996 at an exercise price of $.08 per
         share.  Management  believes  that the fair value of the shares did not
         exceed $.08 per share on the date of the grant.  In  1997,  Mr. Phillip
         Magiera joined the Board of  Directors to fill a vacancy created by the
         resignation of Mr. Daniel McGinnis.   Mr.  Magiera  is  a  principal of
         Maroon Bells.

         Offices.  From  October 1, 1996 until  April 10,  1997 the  Company has
         utilized as its  corporate  headquarters  the offices of Maroon  Bells.
         During this period,  Maroon Bells has not assessed WorldPort any rental
         or lease  charges for office  space,  telephone  expenses,  supplies or
         utilities. Prior to October 1, 1996, the Company maintained its offices
         in space provided by the Company's former president pursuant to an oral
         agreement for $250 per month including basic telephone and receptionist
         services commencing June 1, 1989. For the years ended December 31, 1996
         and 1995, rent of $1,000 and $3,000 respectively was paid to the former
         president.

         Consulting Agreements.  In July, 1996 WorldPort 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 Maroon  Bells,  and Messrs.  Mooney and
         Hicks  are  employees  of  Maroon  Bells.  Pursuant  to the  consulting
         agreements,  a total of 650,000  shares of WorldPort  common stock were
         earned by the  Consultants  for services  rendered to the  Company.  On
         February 8, 1997 WorldPort filed a form S-8 registration  statement for
         these 650,000 shares.  These shares were valued at $.05 per share based
         upon other stock transactions at the time the services were rendered.



                                      F-11

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

2.       RELATED PARTY TRANSACTIONS, CONTINUED

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

3.       STOCKHOLDER'S EQUITY

         Preferred Stock

         The Company authorized  10,000,000 shares of $.0001 par value preferred
         stock. No preferred stock is issued or outstanding.

         Common Stock

         In  January  of 1989,  the  Company  sold  40,000  Units to its  former
         officers and directors for $200. Each Unit consisted of one share of no
         par value restricted  common stock, one Class A Warrant and one Class B
         Warrant.  The Class A and Class B Warrants  were included in the public
         offering (Note 4).

         Long-Term Incentive Plan

         The  Company  adopted  an  incentive  stock  option  plan  for  Company
         employees and  consultants.  The Company has reserved  2,000,000 common
         shares for  issuance  pursuant to the plan.  As of December  31,  1996,
         there were  50,000  outstanding  options  under the Plan at an exercise
         price of $.08 per share.

         Other

         Additionally,  prior to year end, the Company issued 25,000  additional
         stock options which had been previously  authorized pursuant to a grant
         by the Board of  Directors.  In March 1997,  the Company  authorized  a
         total of 210,000 stock options for directors  with an exercise price of
         $.75 per share.





                                      F-12

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

4.       PUBLIC OFFERING

         In October of 1990, the Company  completed a public  offering of 12,000
         Units at $5.00 per Unit through an officer and director.

                  Gross proceeds from offering                         $ 60,000
                  Offering costs paid directly,
                    e.g. legal, accounting, etc.                        (17,653)
                  Net stockholders' equity from
                    the offering                                       $ 42,347
                                                                       ========

         Each Unit consisted of one share of the Company's  common stock and one
         Class C Warrant to purchase one share of common stock at $100 per share
         through the period ending April 24, 1997.  The common stock and Class C
         Warrants   included  in  the  Units  became   separately   transferable
         immediately after the closing of the public offering.

         Included in this  offering  were 40,000 Class A Common  Stock  Purchase
         Warrants and 40,000 Class B Common Stock  Purchase  Warrants (the A & B
         Warrants)  offered by certain  warrant holders of the Company (Note 3).
         If the founding  shareholders (present holders of the A and B Warrants)
         were to sell the A & B Warrants,  the Company  would not receive any of
         the proceeds from the sale.

         One Class A Warrant  entitles  the holder to purchase  one share of the
         Company's common stock at $25 per share through the period ending April
         24, 1997. One Class B Warrant entitles the holder to purchase one share
         of the  Company's  common  stock at $50 per share  through  the  period
         ending  April  24,  1997.  The A & B  Warrants  were  sold  at a  price
         determined  by  the  public  demand  therefore,  not to  exceed  $5 per
         warrant.  The selling  warrant  holders did not pay any of the offering
         expenses.

         The Company  may redeem the Class C Warrants  at any time,  at $.01 per
         Warrant upon 30 days written notice to the Warrantholders.

5.       INCOME TAXES

         As  of  December  31,  1996,  net  operating  loss   carryforwards   of
         approximately  $296,000 are available to reduce future taxable  income,
         expiring in 2004 through  2010.  Deferred  tax assets of  approximately
         $86,485 (an increase of $79,185  from  December 31, 1995) have not been
         recognized for the tax benefits of the net operating loss carryforwards
         due to the uncertainty of their realization. The Company has provided a
         

                                      F-13

<PAGE>



                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995


5.       INCOME TAXES, CONTINUED

         valuation  allowance for the entire $296,000.   Recent changes in stock
         ownership of the Company could result in limitations  on the  Company's
         ability to utilize the net operating loss carryforward.

6.       NOTES RECEIVABLE

         At December 31, 1996, notes receivable consisted of the following:

                  Com Tech International Corporation,
                  interest at 12.0%, due
                  October 27, 1996, collateralized
                  by borrowers right, title and
                  interest in Datamax de Mexico,
                  S.A. de C.V. including accrued
                  interest of $27,806                                 $  527,806

                  Global Star International, Inc. ("GSI"),
                  interest at 10.0%, secured by pledge
                  of 100% of the stock of GSI                            800,000
                                                                      ----------
                                                                      $1,327,806

         The  Com  Tech  Note  and  accrued  interest  has  been  classified  as
         non-current in the accompanying  financial statements.  As described in
         Note 2, on March 7, 1997, the Company entered into a Stock Issuance and
         Indemnification  Agreement  with Maroon  Bells,  whereby  Maroon  Bells
         agreed to indemnify the Company for an amount up to $460,000 in cash or
         the Company's  $.0001 par value common stock, or a combination of both,
         in event that the Company is  unsuccessful  in securing  repayment from
         the Com Tech Note.

         The Global Star International,  Inc. note receivable was repaid in full
         on March 6, 1997.

7.       ADVISORY AGREEMENT

         On October 31, 1996,  the Company  entered  into an advisory  agreement
         with Dinton Trader S.A. (Dinton Trader).  The agreement  provides among
         other  things,  that  Dinton  Trader  will  assist  the  Company in the
         identification  of  potential  merger or  acquisition  candidates,  and
         assist in the development and  implementation of a corporate  financial
         strategy.  The Company  agreed to pay Dinton  Trader an advisory fee of
         $360,000 for services provided, when and if such services are completed
         


                                      F-14

<PAGE>


                         WORLDPORT COMMUNICATIONS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           December 31, 1996 and 1995

7.       ADVISORY AGREEMENT, CONTINUED

         in a manner satisfactory to the Company, payable no later than June 30,
         1997. On January 14, 1997, the Company paid Dinton Trader $150,000.

8.       CHANGE IN CONTROL

         On June 26, 1996, the Company  entered into a stock purchase  agreement
         with Maroon Bells and certain  other  investors  to purchase  4,000,000
         shares  of  the  Company's  common  stock,  approximately  98%  of  the
         outstanding common stock of the Company after issuance.

9.       SUBSEQUENT EVENT

         In March 1997,  the  Company  closed the  offering  (the  Offering)  of
         3,333,333  shares of common  stock at $ .75 per  share  pursuant  to an
         offering  memorandum dated November 1, 1996. The Company received total
         proceeds  of  $2,500,000  from  the  offering,   of  which   $2,387,750
         (3,183,667 shares) had been raised as of December 31, 1996.

10.      COMMON STOCK SUBSCRIBED

         At December 31,  1996,  the Company was  obligated  to issue  3,833,667
         shares of its common stock for services rendered in 1996 and for common
         stock  subscribed  in connection  with the  Offering.  These shares are
         shown as outstanding in the accompanying financial statements.

                                      F-15