<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 17, 1999
--------------------------------
SMARTALK TELESERVICES, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
California 0-21579 95-4502740
-------------- ----------- --------------
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
5080 Tuttle Crossing Boulevard, Dublin, Ohio 43016-3566
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
The Company's telephone number, including area code (614) 789-8600
-----------------------------
No change
- --------------------------------------------------------------------------------
(Former Name or Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
As previously disclosed in a Current Report on Form 8-K, on January 19,
1999, SmarTalk TeleServices, Inc. and certain of its non-foreign subsidiaries
(collectively, the "Company") filed a voluntary petition under Chapter 11 of the
United States Bankruptcy Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") (Cases
Nos. 99-108 to 99-127).
Pursuant to Bankruptcy Rule 2015 and the United States Trustee's Operating
Guidelines and Reporting Requirements for Chapter 11 cases, on June 17, 1999 the
Company filed its Monthly Operating Report for the period of April 1, 1999
through April 30, 1999 (the "April MOR") with the Office of the United States
Trustee - Region 3 and the Bankruptcy Court.
A copy of the April MOR is attached hereto as Exhibit 99.1, and
incorporated herein by reference./1/
ITEM 7. EXHIBITS
Exhibit No. Description
- ---------- -----------
99.1 Monthly Operating Report for the period of April 1, 1999 through
April 30, 1999
The Exhibit to this Report contains forward-looking statements. The words,
"believe," "expect," and "anticipate" and similar expressions identify such
forward-looking statements. These forward-looking statements reflect the
Company's views with respect to future events and financial performance. In
particular, SmarTalk has not prepared any formal liquidation analysis based on
the assets of the bankruptcy estate, and any such analysis would be premature at
this time. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of their dates. The Company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise (other than
updates that are consistent with the Debtor's obligations to file monthly
operating reports).
- -------------------
/1/ The attachments and exhibits referenced in the April MOR are not attached as
part of Exhibit 99.1, but are available at the Office of the United States
Trustee and the Bankruptcy Court. In addition, the Company agrees that it will
furnish a copy of any omitted schedule or similar attachment to the Commission
upon its request.
(Page 2 of 4 Pages}
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SMARTALK TELESERVICES, INC.
Date: June 17, 1999 By: /s/ Thaddeus Bereday
-------------------------------------------
Name: Thaddeus Bereday
Title: Vice President and General Counsel
(Page 3 of 4 Pages)
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ---------- -----------
99.1 Monthly Operating Report for the period of April 1, 1999 through
April 30, 1999
(Page 4 of 4 Pages)
<PAGE>
EXHIBIT 99.1
- -----------------------------------------------
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS -1
- -----------------------------------------------
- -----------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
- -----------------------------------------------
- -----------------------------------------------
JUDGE: Honorable Mary F. Walrath
- -----------------------------------------------
OFFICE OF THE UNITED STATES TRUSTEE - REGION 3
CONSOLIDATED MONTHLY OPERATING REPORT
FOR THE MONTH ENDING: April 30, 1999
FOR THE PERIOD: April 1, 1999 through April 30, 1999
================================================================================
<TABLE>
<CAPTION>
Document Previously Explanation
Required Attachments Attached Submitted Attached
<S> <C> <C> <C>
1. Tax Receipts (X) ( ) ( )
2. Bank Statements (X) ( ) ( )
3. Most recently filed Income Tax ( ) (X) ( )
Return
4. Most recent Annual Financial ( ) (X) ( )
Statements prepared by accountant
</TABLE>
NOTE: THIS CONSOLIDATED MONTHLY OPERATING REPORT IS FILED ON A CONSOLIDATED
BASIS FOR EACH OF THE 20 ENTITIES THAT IS A DEBTOR-IN-POSSESSION IN THE ABOVE
CAPTIONED CASES.
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I
DECLARE UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING
MONTHLY OPERATING REPORT (ACCRUAL BASIS-1 THROUGH ACCRUAL BASIS-9) AND
THE ACCOMPANYING ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE
DOCUMENTS ARE TRUE, CORRECT AND COMPLETE. DECLARATION OF PREPARER
(OTHER THAN RESPONSIBLE PARTY) IS BASED ON ALL INFORMATION OF WHICH
PREPARER HAS ANY KNOWLEDGE.
RESPONSIBLE PARTY:
/s/ Thaddeus Bereday President
- ----------------------------------------------- ---------------------------
ORIGINAL SIGNATURE OF RESPONSIBLE PARTY TITLE
Thaddeus Bereday 6/15/99
- ----------------------------------------------- ---------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
PREPARER:
/s/ Lois Mannon Chief Accounting Officer
- ----------------------------------------------- ---------------------------
ORIGINAL SIGNATURE OF PREPARER TITLE
Lois Mannon 6/15/99
- ----------------------------------------------- ---------------------------
PRINTED NAME OF PREPARER DATE
Pursuant to an agreement with the office of the United States Trustee,
this report is to be filed no later than the 45th day of the month
following the end of the month covered by the report.
<PAGE>
- -----------------------------------------------
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 2
- -----------------------------------------------
- -----------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
- -----------------------------------------------
SECOND QUARTER
COMPARATIVE BALANCE SHEET
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
MONTH MONTH MONTH
ASSETS
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UNRESTRICTED CASH
RESTRICTED CASH SEE ATTACHED BALANCE SHEET
1. TOTAL CASH
2. ACCOUNTS RECEIVABLE (NET)
3. INVENTORY NOTE: THE APRIL MONTHLY OPERATING REPORT
4. NOTES RECEIVABLE INCLUDES FINANCIAL STATEMENTS FOR THE
5. PREPAID EXPENSES MONTH ENDED MARCH 31, 1999 WHICH WERE
6. OTHER (ATTACH LIST) OMITTED FROM THE PREVIOUS MONTH'S
7. TOTAL CURRENT ASSETS OPERATING REPORT, AS DESCRIBED IN THE
8. PROPERTY, PLANT & EQUIPMENT ADDENDUM TO THE MARCH MONTHLY
9. LESS: ACCUMULATED OPERATING REPORT.
DEPRECIATION / DEPLETION
10. NET PROPERTY, PLANT &
EQUIPMENT
11. DUE FROM AFFILIATES & INSIDERS
AMORTIZATION (ATTACH LIST)
13. OTHER (ATTACH LIST)
14. TOTAL ASSETS
- ---------------------------------------------------------------------------------------------------
POSTPETITION LIABILITIES
- ---------------------------------------------------------------------------------------------------
15. ACCOUNTS PAYABLE
16. TAXES PAYABLE
17. NOTES PAYABLE
18. PROFESSIONAL FEES
19. SECURED DEBT
20. DUE TO AFFILIATES & INSIDERS
21. OTHER (ATTACH LIST)
22. TOTAL POSTPETITION
LIABILITIES
- ---------------------------------------------------------------------------------------------------
PREPETITION LIABILITIES
- ---------------------------------------------------------------------------------------------------
23. SECURED DEBT
24. PRIORITY DEBT
25. UNSECURED DEBT
26. OTHER (ATTACH LIST)
27. TOTAL PREPETITION LIABILITIES
28. TOTAL LIABILITIES
- ---------------------------------------------------------------------------------------------------
EQUITY
- ---------------------------------------------------------------------------------------------------
29. PREPETITION OWNERS' EQUITY
30. POSTPETITION CUMULATIVE
PROFIT OR (LOSS)
DIRECT CHARGES TO EQUITY
(ATTACH EXPLANATION)
31. TOTAL EQUITY
32. TOTAL LIABILITIES &
OWNERS' EQUITY
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SMARTALK TELESERVICES, INC.
DEBTORS - IN - POSSESSION
CONSOLIDATING BALANCE SHEETS
AS OF: APRIL 30, 1999
NOTE: THE FOLLOWING ARE PRELIMINARY FINANCIAL STATEMENTS. A NUMBER OF ESTIMATES
ARE USED IN THE PREPARATION OF THESE FINANCIAL STATEMENTS. ACTUAL FINAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PRESENTED.
<TABLE>
<CAPTION>
NON-DEBTOR SUBSIDIARIES
(Provided for informational
purposes only on a basis consistent
with the Debtors previous public
financial reporting)
TOTAL
SMTK SMTK DEBTORS &
Assets DEBTORS NON-DEBTORS NON-DEBTORS
----------- ----------- -------------
<S> <C> <C> <C>
Current Assets:
Cash 92,883,354 1,096,222 93,979,576
AT&T Holdback Note Receivable 40,000,000 - 40,000,000
Interest Receivable 166,667 - 166,667
Notes Receivable, net 4,583,112 - 4,583,112
Inventory 4,700,005 - 4,700,005
Prepaid Expenses 337,237 - 337,237
----------- ----------- -------------
Total Current Assets 142,670,375 1,096,222 143,766,597
----------- ----------- -------------
Non Current:
Property and equipment, net 1,504,260 - 1,504,260
----------- ----------- -------------
Total Non Current 1,504,260 - 1,504,260
Total Assets 144,174,635 1,096,222 145,270,857
=========== =========== =============
Liabilities and Equity
Current Liabilities:
Post-Petition Accounts Payable 999,045 764,839 1,763,884
Excise & Sales Tax Payable 186,739 - 186,739
Other Accrued 5,722,044 - 5,722,044
----------- ----------- -------------
Total Current Liabilities 6,907,828 764,839 7,672,667
Pre-Petition Liabilities:
Accounts Payable 46,855,140 - 46,855,140
Excise & Sales Tax Payable 2,465,778 - 2,465,778
Other Accrued 19,066,786 - 19,066,786
Secured Debt 10,000,000 - 10,000,000
Accrued Interest 5,295,945 - 5,295,945
Long Term Debt 150,867,550 - 150,867,550
Note Payable Other 4,297,998 - 4,297,998
Intercompany Payable (4,451,955) 4,451,955 -
----------- ----------- -------------
Total Pre-Petition Liabilities 234,397,242 4,451,955 238,849,197
----------- ----------- -------------
Total Liabilities 241,305,071 5,216,794 246,521,865
Shareholder Equity (Deficit):
Common Stock 278,227,663 - 278,227,663
Beginning Accumulated Deficit (170,658,280) (3,695,301) (174,353,581)
Current Year Profit (Loss) (204,699,819) (425,271) (205,125,090)
----------- ---------- -------------
Total Shareholders Equity (97,130,436) (4,120,572) (101,251,008)
----------- ---------- -------------
Total Liabilities and Equity 144,174,635 1,096,222 145,270,857
=========== ========== =============
</TABLE>
Readers are cautioned to read the attached addendum to the financial statements.
<PAGE>
SMARTALK TELESERVICES, INC.
DEBTORS - IN - POSSESSION
CONSOLIDATING BALANCE SHEETS
AS OF: MARCH 31, 1999
NOTE: THE FOLLOWING ARE PRELIMINARY FINANCIAL STATEMENTS. A NUMBER OF ESTIMATES
ARE USED IN THE PREPARATION OF THESE FINANCIAL STATEMENTS. ACTUAL FINAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PRESENTED.
NON-DEBTOR SUBSIDIARIES
(Provided for informational
purposes only on a basis consistent
with the Debtors previous public
financial reporting)
<TABLE>
<CAPTION>
TOTAL
SMTK SMTK DEBTORS &
Assets DEBTORS NON-DEBTORS NON-DEBTORS
------------ ----------- -----------
<S> <C> <C> <C>
Current Assets:
Cash - - -
Accounts Receivable from AT&T 96,456,241 1,200,000 97,656,241
Accounts Receivable Trade - - -
Allowance for doubtful accounts - - -
AT&T Holdback Note Receivable 40,000,000 - 40,000,000
Notes Receivable, net 4,583,112 - 4,583,112
Inventory 4,700,005 - 4,700,005
Prepaid Expenses 418,393 - 418,393
Other Current Assets - - -
------------ ---------- ------------
Total Current Assets 146,157,751 1,200,000 147,357,751
------------ ---------- ------------
Non Current:
Property and equipment, net 1,538,260 - 1,538,260
Intangibles, net - - -
------------ ---------- ------------
Total Non Current 1,538,260 - 1,538,260
Total Assets 147,696,011 1,200,000 148,896,011
============ ========== ============
Liabilities and Equity
Current Liabilities:
Post-Petition Accounts Payable - 808,350 808,350
Deferred Revenue - - -
Excise & Sales Tax Payable 595,169 - 595,169
Accrued Marketing Cost - - -
Other Accrued 4,761,902 - 4,761,902
------------ ---------- ------------
Total Current Liabilities 5,357,071 808,350 6,165,421
Pre-Petition Liabilities:
Accounts Payable 49,688,838 - 49,688,838
Excise & Sales Tax Payable 2,465,777 - 2,465,777
Other Accrued 19,066,785 - 19,066,785
Secured Debt 10,000,000 - 10,000,000
Accrued Interest 4,469,027 - 4,469,027
Long Term Debt 150,867,550 - 150,867,550
Note Payable Other 4,297,999 - 4,297,999
Intercompany Payable (4,451,955) 4,451,955 -
------------ ---------- ------------
Total Pre-Petition Liabilities 236,404,021 4,451,955 240,855,976
------------ ---------- ------------
Total Liabilities 241,761,092 5,260,305 247,021,397
Shareholder Equity (Deficit):
Common Stock 278,227,663 - 278,227,663
Beginning Accumulated Deficit (170,658,280) (3,695,301) (174,353,581)
Current Year Profit (Loss) (201,634,464) (365,004) (201,999,468)
------------ ---------- ------------
Total Shareholders Equity (94,065,081) (4,060,305) (98,125,386)
------------ ---------- ------------
Total Liabilities and Equity 147,696,011 1,200,000 148,896,011
============ ========== ============
</TABLE>
Readers are cautioned to read the attached addendum to the financial statements.
<PAGE>
SMARTALK TELESERVICES, INC. AND SUBSIDIARIES
DEBTORS-IN-POSSESSION
ADDENDUM TO FINANCIAL STATEMENTS
For the month ended April 30, 1999
On March 31, 1999 (the "Closing Date"), pursuant to the terms of an Asset
Purchase Agreement, dated January 19, 1999 (as amended, the "Purchase
Agreement"), among SmarTalk TeleServices, Inc. ("SMTK"), and its Debtor and Non-
Debtor subsidiaries (collectively, the "Company") and AT&T Corp. ("AT&T"), AT&T
purchased substantially all the assets of the Company for aggregate
consideration of approximately $145 million consisting of approximately $96
million in cash and payment of approximately $9 million in indebtedness and
transaction costs and a $40 million promissory note issued by AT&T in favor of
SMTK. The purchase price is subject to downward adjustments pursuant to a post-
closing purchase price adjustment formula and in the event of claims by AT&T.
1. The Company's preliminary financial statements have been prepared based on
the Closing Statements (as defined in the Purchase Agreement) delivered to
the Company by AT&T on or about May 15, 1999. The Closing Statements are
subject to a review period by the Company and its representatives and
become final and binding only after any disagreements between the Company,
its representatives and AT&T have been resolved pursuant to the procedures
set forth in the Purchase Agreement (including the submission of any
disagreements to arbitration by a mutually acceptable public accounting
firm with nationally recognized auditing experience). The final Closing
Statements and the Purchase Price Adjustment Statement (as defined in the
Purchase Agreement) may alter the Company's presentation of its financial
results. The Company intends to work closely with the Official Committee of
Unsecured Creditors and its legal and financial advisors (collectively, the
"Committee") to finalize the Closing Statements and the Purchase Price
Adjustment Statement and, if necessary, will adjust its financial results
in future consolidated monthly operating reports.
2. In connection with the Purchase Agreement, AT&T delivered a $40 million
promissory note (the "Holdback Note") to SMTK as partial consideration for
the purchase of substantially all the Company's assets. The Holdback Note
is subject to adjustment pending completion of the Company's review of the
Closing Statements and the Purchase Price Adjustment Statement as well as
in the event of certain claims by AT&T. Although the Company and AT&T have
not yet finalized the Closing Statements, AT&T has suggested that the
principal amount of the Holdback Note be reduced by $4,578,072 to
$35,421,928. Due to the uncertainty surrounding the amount of offsets, if
any, against the Holdback Note, the Company will continue to report the
value of the Holdback Note as the stated face amount until the Closing
Statements are finalized.
3. In connection with the sale of substantially all of the Company's assets to
AT&T, the Company has recognized a loss on the impairment and anticipated
liquidation values of certain assets that were excluded from the AT&T sale
transaction. The liquidation of such assets has not yet occurred and thus
the actual liquidation value and impairment loss may differ from the
Company's preliminary estimates which have been used to prepare the
financial statements included herein. The Company undertakes no obligation
to update its estimate of the loss or impairment of assets and the related
liquidation losses (other than updates that are consistent with the
Debtors' obligations to file monthly operating reports). The Company will
adjust the carrying amounts of such assets in future reporting periods when
more accurate realizable values are determined.
The foregoing estimates represent the Company's views with respect to
future events and financial performance. These estimates are subject
to risks and uncertainties that could cause actual results and
performance to differ from such statements (including the process set
forth in the Purchase Agreement for finalizing the Closing Statements
and the Purchase Price Adjustment Statement). Readers are cautioned
not to place reliance on such estimates and the Company undertakes no
obligation to update such estimates, whether as a result of new
information, future events or otherwise (other than updates that are
consistent with the Debtors' obligations to file monthly operating
reports).
<PAGE>
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 3
- ---------------------------------------------
- ---------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW) SECOND QUARTER
- --------------------------------------------- ------
INCOME STATEMENT
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
MONTH MONTH MONTH QUARTER
REVENUES TOTAL
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. GROSS REVENUES
2. LESS: RETURNS & DISCOUNTS SEE ATTACHED INCOME STATEMENT
3. NET REVENUE
- ----------------------------------------------------------------------------------------------------------------
COST OF GOODS SOLD
- ----------------------------------------------------------------------------------------------------------------
4. BEGINNING INVENTORY NOTE: THE APRIL MONTHLY OPERATING REPORT
5. ADD: PURCHASES INCLUDES FINANCIAL STATEMENTS FOR THE
6. LESS: ENDING INVENTORY MONTH ENDED MARCH 31, 1999 WHICH WERE
7. TOTAL COST OF GOODS SOLD OMITTED FROM THE PREVIOUS MONTH'S
8. GROSS PROFIT OPERATING REPORT, AS DESCRIBED IN THE
- ----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES ADDENDUM TO THE MARCH MONTHLY
- ----------------------------------------------------------------------------------------------------------------
9. OFFICER/INSIDER COMPENSATION OPERATING REPORT.
10. DIRECT LABOR/SALARIES
11. PAYROLL TAXES
12. RENT & LEASE EXPENSE
13. INSURANCE
14. DEPRECIATION/DEPLETION/AMORTIZATION
15. GENERAL & ADMINISTRATIVE
16. OTHER (ATTACH LIST)
17. TOTAL OPERATING EXPENSES
18. INCOME BEFORE NON-OPERATING
INCOME & EXPENSE
- ----------------------------------------------------------------------------------------------------------------
OTHER INCOME & EXPENSES
- ----------------------------------------------------------------------------------------------------------------
19. NON-OPERATING INCOME (ATT. LIST)
20. NON-OPERATING EXPENSE (ATT. LIST)
21. INTEREST EXPENSE
22. OTHER (ATTACH LIST)
23. NET OTHER INCOME & EXPENSES
- ----------------------------------------------------------------------------------------------------------------
REORGANIZATION EXPENSES
- ----------------------------------------------------------------------------------------------------------------
24. PROFESSIONAL FEES
25. U.S. TRUSTEE FEES
26. OTHER (ATTACH LIST)
27. TOTAL REORGANIZATION EXPENSES
28. INCOME TAX
29. NET PROFIT (LOSS)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SMARTALK TELESERVICES, INC. AND SUBSIDIARIES
DEBTORS-IN-POSSESSION
CONSOLIDATING INCOME STATEMENT
For the month ended April 30, 1999
NOTE: THE FOLLOWING ARE PRELIMINARY FINANCIAL STATEMENTS. A NUMBER OF ESTIMATES
ARE USED IN THE PREPARATION OF THESE FINANCIAL STATEMENTS. ACTUAL FINAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PRESENTED.
<TABLE>
<CAPTION>
NON-DEBTOR SUBSIDIARIES
(Provided for informational
purposes only on a basis consistent
with the Debtors previous public
financial reporting)
SMTK SMTK TOTAL DEBTORS
DEBTORS NON-DEBTORS AND NON-DEBTORS
------------ ----------- ---------------
<S> <C> <C> <C>
Revenue - - -
Cost of revenue - - -
------------ ----------- ---------------
Gross profit - - -
General and administrative 120,885 - 120,885
Reorganization costs:
Professionals costs 2,199,856 60,267 2,260,123
Other 263,888 - 263,888
------------ ----------- ---------------
Operating loss (2,584,629) (60,267) (2,644,896)
Interest expense (101,918) - (101,918)
Interest income 346,192 - 346,192
------------ ----------- ---------------
Net loss (2,340,355) (60,267) (2,400,622)
============ =========== ===============
</TABLE>
Readers are cautioned to read the attached addendum to the financial statements.
<PAGE>
SMARTALK TELESERVICES, INC AND SUBSIDIARIES
DEBTORS-IN POSSESSION
CONSOLIDATING INCOME STATEMENT
For the month ended March 31, 1999
NOTE: THE FOLLOWING ARE PRELIMINARY FINANCIAL STATEMENTS. A NUMBER OF ESTIMATES
ARE USED IN THE PREPARATION OF THESE FINANCIAL STATEMENTS. ACTUAL FINAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE PRESENTED.
<TABLE>
<CAPTION>
NON-DEBTOR SUBSIDIARIES
(Provided for informational
purposes only on a basis consistent
with the Debtors previous public
financial reporting)
SMTK SMTK TOTAL DEBTORS
DEBTORS NON-DEBTORS AND NON-DEBTORS
--------------- --------------- ----------------
<S> <C> <C> <C>
Revenue 8,700,090 1,311,650 10,011,740
Cost of revenue 1,875,237 947,916 2,823,153
--------------- --------------- ---------------
Gross profit 6,824,853 363,734 7,188,587
Sales and marketing 4,727,707 63,116 4,790,823
General and administrative 6,122,543 662,679 6,785,222
Reorganization costs: - - -
Professionals costs 612,070 - 612,070
Other - - -
--------------- --------------- ---------------
Operating loss (4,637,467) (362,061) (4,999,528)
Interest expense (101,012) 2,943 (98,069)
Interest income - - -
Loss on AT&T sale (124,212,445) - (124,212,445)
Loss on asset impairment and
estimated liquidation losses (52,974,250) - (52,974,250)
--------------- --------------- ---------------
Net loss (181,925,174) (359,118) (182,284,292)
=============== =============== ===============
</TABLE>
Readers are cautioned to read the attached addendum to the financial statements.
<PAGE>
SMARTALK TELESERVICES, INC. AND SUBSIDIARIES
DEBTORS-IN-POSSESSION
ADDENDUM TO FINANCIAL STATEMENTS
For the month ended April 30, 1999
On March 31, 1999 (the "Closing Date"), pursuant to the terms of an Asset
Purchase Agreement, dated January 19, 1999 (as amended, the "Purchase
Agreement"), among SmarTalk TeleServices, Inc. ("SMTK"), and its Debtor and Non-
Debtor subsidiaries (collectively, the "Company") and AT&T Corp. ("AT&T"), AT&T
purchased substantially all the assets of the Company for aggregate
consideration of approximately $145 million consisting of approximately $96
million in cash and payment of approximately $9 million in indebtedness and
transaction costs and a $40 million promissory note issued by AT&T in favor of
SMTK. The purchase price is subject to downward adjustments pursuant to a post-
closing purchase price adjustment formula and in the event of claims by AT&T.
1. The Company's preliminary financial statements have been prepared based on
the Closing Statements (as defined in the Purchase Agreement) delivered to
the Company by AT&T on or about May 15, 1999. The Closing Statements are
subject to a review period by the Company and its representatives and
become final and binding only after any disagreements between the Company,
its representatives and AT&T have been resolved pursuant to the procedures
set forth in the Purchase Agreement (including the submission of any
disagreements to arbitration by a mutually acceptable public accounting
firm with nationally recognized auditing experience). The final Closing
Statements and the Purchase Price Adjustment Statement (as defined in the
Purchase Agreement) may alter the Company's presentation of its financial
results. The Company intends to work closely with the Official Committee of
Unsecured Creditors and its legal and financial advisors (collectively, the
"Committee") to finalize the Closing Statements and the Purchase Price
Adjustment Statement and, if necessary, will adjust its financial results
in future consolidated monthly operating reports.
2. In connection with the Purchase Agreement, AT&T delivered a $40 million
promissory note (the "Holdback Note") to SMTK as partial consideration for
the purchase of substantially all the Company's assets. The Holdback Note
is subject to adjustment pending completion of the Company's review of the
Closing Statements and the Purchase Price Adjustment Statement as well as
in the event of certain claims by AT&T. Although the Company and AT&T have
not yet finalized the Closing Statements, AT&T has suggested that the
principal amount of the Holdback Note be reduced by $4,578,072 to
$35,421,928. Due to the uncertainty surrounding the amount of offsets, if
any, against the Holdback Note, the Company will continue to report the
value of the Holdback Note as the stated face amount until the Closing
Statements are finalized.
3. In connection with the sale of substantially all of the Company's assets to
AT&T, the Company has recognized a loss on the impairment and anticipated
liquidation values of certain assets that were excluded from the AT&T sale
transaction. The liquidation of such assets has not yet occurred and thus
the actual liquidation value and impairment loss may differ from the
Company's preliminary estimates which have been used to prepare the
financial statements included herein. The Company undertakes no obligation
to update its estimate of the loss or impairment of assets and the related
liquidation losses (other than updates that are consistent with the
Debtors' obligations to file monthly operating reports). The Company will
adjust the carrying amounts of such assets in future reporting periods when
more accurate realizable values are determined.
The foregoing estimates represent the Company's views with respect to
future events and financial performance. These estimates are subject
to risks and uncertainties that could cause actual results and
performance to differ from such statements (including the process set
forth in the Purchase Agreement for finalizing the Closing Statements
and the Purchase Price Adjustment Statement). Readers are cautioned
not to place reliance on such estimates and the Company undertakes no
obligation to update such estimates, whether as a result of new
information, future events or otherwise (other than updates that are
consistent with the Debtors' obligations to file monthly operating
reports).
<PAGE>
ACCRUAL BASIS -4
- -------------------------------------------
DEBTORS: WORLDWIDE DIRECT, INC., et al. SECOND QUARTER
- ------------------------------------------- ------
Bank: FIRSTAR
- ------------------------------------------- -------
CASE NUMBERS: 99-108 to 99-127 (MFW) Account no.: 4889-40040
- ------------------------------------------- ----------
Account type: Operating
---------
NOTE:
ALL CASH DISBURSEMENTS, EXCLUDING INTER-ACCOUNT TRANSFERS, ARE DISBURSED OUT
OF THE FIRSTAR OPERATING ACCOUNT #4889-40040 FROM SMTK EXPEDITE CO., INC.
(f.k.a. SMARTALK TELESERVICES, INC.) CASE NUMBER 99-109.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CASH RECEIPTS AND MONTH
------------------------------------------
DISBURSEMENTS 4/1/99 - 4/30/99
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. CASH - BEGINNING OF MONTH $ -
- -----------------------------------------------------------------------------------------------------------------------------------
RECEIPTS FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
2. CASH SALES (FROM MERCHANT CARD RECHARGES) $ -
3. COLLECTION OF ACCOUNTS RECEIVABLE $ -
4. LOANS & ADVANCES $ -
5. SALE OF ASSETS $ -
6. OTHER:
TRANSFERS IN FROM MONEY MARKET ACCOUNT $ 3,995,803
MISCELLANEOUS RECEIPTS FROM REFUNDS $ 10,934
TOTAL OTHER $ 4,006,737
7. TOTAL RECEIPTS $ 4,006,737
8. TOTAL CASH AVAILABLE $ 4,006,737
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING DISBURSEMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
9. CHECKS WRITTEN - 4/01/99-4/30/99 (SEE ATTACHED LIST) $ 496,217
10. WIRE TRANSFERS - 4/01/99-4/30/99 (SEE ATTACHED LIST) $ 3,382,340
11. OTHER:
CASH TRANSFERS OUT TO CANADA ACCOUNT 4/01/99-4/30/99 $ 124
BANK CHARGES $ 133
12. TOTAL OTHER $ 257
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL DISBURSEMENTS FROM BANK ACCOUNT $ 3,878,814
ENDING ACCOUNT BALANCE $ 127,923
ADD: CASH BALANCES FROM NON-OPERATING ACCOUNTS $48,043,959
SEE ACCRUAL BASIS - 6
ADD: SHORT-TERM TREASURY BILL SECURITIES BALANCES $45,807,694
SEE ACCRUAL BASIS - 6
END OF MONTH BALANCE (SHOULD EQUAL ACCRUAL BASIS- 6, LINE 13) $93,979,576
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
------------------------------------------
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 5
------------------------------------------
------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
------------------------------------------
------------------------------------------------------------------------------
MONTH MONTH MONTH
--------------------------------
ACCOUNTS RECEIVABLE AGING April 30, 1999
1. 0 - 30 days old $ -
2. 31 - 60 days old -
3. 61 - 90 days old -
4. 91+ days old -
5. TOTAL ACCOUNTS RECEIVABLE -
6. AMOUNT CONSIDERED UNCOLLECTIBLE -
7. ACCOUNTS RECEIVABLE (NET) $ -
------------------------------------------------------------------------------
-----------------------------------------------
MONTH: April 30, 1999
---------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
------------------------------------------------------------------------------
0-30 31-60 61-90 91+
DAYS DAYS DAYS DAYS TOTAL
------------------------------------------------------------------------------
ACCOUNTS PAYABLE $726,464 $272,581 $ - $ - $999,045
------------------------------------------------------------------------------
NOTE: Accounts payable aged over 30 days represent professional fees
subject to 20% holdback provision pursuant to bankruptcy court order.
---------------------------------------------------
STATUS OF POSTPETITION TAXES MONTH: April 30, 1999
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
BEGINNING AMOUNT ENDING
TAX WITHHELD AND / AMOUNT TAX DELINQUENT
FEDERAL LIABILITY* 0R ACCRUED PAID LIABILITY TAXES
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. WITHHOLDING** $ - $ 7,435 $ 7,435 $ - $ -
2. FICA-EMPLOYEE** $ - $ 752 $ 752 $ - $ -
3. FICA-EMPLOYER** $ - $ 752 $ 752 $ - $ -
4. UNEMPLOYMENT $ - $ 16 $ 16 $ - $ -
5. INCOME $ - $ - $ - $ - $ -
6. OTHER (ATTACH LIST) $ - $ - $ - $ - $ -
7. TOTAL FEDERAL TAXES $ - $ 8,955 $ 8,955 $ - $ -
---------------------------------------------------------------------------------------------------------
STATE AND LOCAL
---------------------------------------------------------------------------------------------------------
8. WITHHOLDING $ - $ 2,047 $ 2,047 $ - $ -
9. SALES $222,340 $ - $222,340 $ - $ -
10. EXCISE $266,168 $ - $266,168 $ - $ -
11. UNEMPLOYMENT $ - $ 132 $ 132 $ - $ -
12. REAL PROPERTY $ - $ - $ - $ - $ -
13. PERSONAL PROPERTY $ - $ - $ - $ - $ -
14. OTHER - STATE DISABILITY $ - $ - $ - $ - $ -
15. TOTAL STATE & LOCAL $488,508 $ 2,179 $490,687 $ - $ -
16. TOTAL TAXES $488,508 $ 11,134 $499,642 $ - $ -
---------------------------------------------------------------------------------------------------------
</TABLE>
* The beginning tax liability should represent the liability from the
prior month or, if this is the first operating report, the amount
should be zero.
** Attach photocopies of IRS Form 6123 or your FTD coupon and payment
receipt to verify payment or deposit.
NOTE: Withholdings are processed and remitted directly by Automatic Data
Processing (ADP) a third party payroll processor.
<PAGE>
-------------------------------------------
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 6
-------------------------------------------
-------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
-------------------------------------------
The debtor in possession must complete the reconciliation below for each bank
account, including all general, payroll and tax accounts, as well as all
savings and investment accounts, money market accounts, certificates of
deposit, government obligations, etc. Accounts with restricted funds should be
identified by placing an asterisk next to the account number. Attach
additional sheets if necessary.
<TABLE>
<CAPTION>
MONTH: April 30, 1999
- ------------------------------------------------ --------------
BANK RECONCILIATIONS
Account #1 Account #2 Account #3 Account #2
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A. BANK: FIRSTAR FIRSTAR FIRSTAR FIRSTAR
- -----------------------------------------------------------------------------------------------------------------------------------
B. ACCOUNT NUMBER: 4889-40040 4889-40099 4889-40107 4889-40115
- -----------------------------------------------------------------------------------------------------------------------------------
C. PURPOSE (TYPE): OPERATING CANADA UNITED KINGDOM FLETCHER
- -----------------------------------------------------------------------------------------------------------------------------------
1. BALANCE PER BANK STATEMENT $ 320,771 $ 49,990 $ 1,175,777 $39,057,551
2. ADD: TOTAL DEPOSITS NOT CREDITED $ - $ - $ - $ -
3. SUBTRACT: OUTSTANDING CHECKS $ (192,848) $ - $ (53,778) $ -
4. OTHER RECONCILING ITEMS (ATTACH LIST) $ - $ 10 $ (50,000) $ -
5. MONTH END BALANCE PER BOOKS $ 127,923 $ 50,000 $ 1,071,999 $39,057,551
6. NUMBER OF LAST CHECK WRITTEN 1084 None 1027 None
<CAPTION>
Account #3
- ---------------------------------------------------------------------------------------------------------
A. BANK: FIRSTAR
- --------------------------------------------------------------------------------------
B. ACCOUNT NUMBER: 4889-40123 TOTAL
- --------------------------------------------------------------------------------------
C. PURPOSE (TYPE): MONEY MARKET
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. BALANCE PER BANK STATEMENT $ 3,293,128 $43,897,217
2. ADD: TOTAL DEPOSITS NOT CREDITED $ 5,371,281 $ 5,371,281
3. SUBTRACT: OUTSTANDING CHECKS $ - $ (246,626)
4. OTHER RECONCILING ITEMS (ATTACH LIST) $ (800,000) $ (849,990)
5. MONTH END BALANCE PER BOOKS $ 7,864,409 $48,171,882
6. NUMBER OF LAST CHECK WRITTEN None
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------
INVESTMENT ACCOUNTS
--------------------------------------------------------------------------------------------------------------------------------
DATE OF MATURITY TYPE OF PURCHASE CURRENT
BANK ACCOUNT NAME & NUMBER PURCHASE DATE INSTRUMENT PRICE VALUE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7. FIRSTAR TREASURY BILL ACCOUNT #2260-00038 April 1, 1999 April 29, 1999 TREASURY BILL $50,999,475 MATURED
8. FIRSTAR TREASURY BILL ACCOUNT #2260-00038 April 29, 1999 June 3, 1999 TREASURY BILL $45,807,694 $45,807,694
9.
10.
----------------------------------------------------------------------------------------------------
11. TOTAL INVESTMENTS $45,807,694
----------------------------------------------------------------------------------------------------
-------------------------------
CASH
---------------------------------------------------------------------------------------------------------------------
12. CURRENCY ON HAND $48,171,882
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
13. TOTAL CASH - END OF MONTH $93,979,576
---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 7
-------------------------------------------------------------------
-------------------------------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
-------------------------------------------------------------------
MONTH: April 30, 1999
-----------------
--------------------------------------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
--------------------------------------------------------------------------------------------------------------------------------
OF THE TOTAL DISBURSEMENTS SHOWN FOR THE MONTH, LIST THE AMOUNT PAID TO
INSIDERS (AS DEFINED IN SECTION 101 (31) (A)-(F) OF THE U.S. BANKRUPTCY CODE)
AND TO PROFESSIONALS. FOR PAYMENTS TO INSIDERS, IDENTIFY THE TYPE OF
COMPENSATION PAID (e.g. SALARY, BONUS, COMMISSIONS, INSURANCE, HOUSING
ALLOWANCE, TRAVEL, CAR ALLOWANCE, ETC.). ATTACH ADDITIONAL SHEETS IF
NECESSARY.
--------------------------------------------------------------------------------------------------------------------------------
INSIDERS
--------------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TYPE OF AMOUNT UNPAID
NAME POSITION PAYMENT PAID BALANCE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Bereday, Thaddeus Vice President, General Counsel, Asst. Sec. Wages, Exp., Bonus $ 74,335
--------------------------------------------------------------------------------------------------------------------------------
2. Wooddell, Wayne SmarTalk CFO Bonus 62,500
--------------------------------------------------------------------------------------------------------------------------------
3.
--------------------------------------------------------------------------------------------------------------------------------
4.
--------------------------------------------------------------------------------------------------------------------------------
5.
--------------------------------------------------------------------------------------------------------------------------------
6.
--------------------------------------------------------------------------------------------------------------------------------
7.
--------------------------------------------------------------------------------------------------------------------------------
8.
--------------------------------------------------------------------------------------------------------------------------------
9.
--------------------------------------------------------------------------------------------------------------------------------
10.
--------------------------------------------------------------------------------------------------------------------------------
TOTAL PAYMENTS TO INSIDERS $ 136,835
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
PROFESSIONALS
--------------------------------------------------------------------------------------------------------------------------------
TYPE DATE OF COURT
OF ORDER AUTHORIZING AMOUNT AMOUNT TOTAL PAID
NAME PROFESSIONAL PAYMENT APPROVED PAID TO DATE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Zolpho Cooper, LLC Consultant April 12, 1999 $ 92,809 $ 92,809 $ 92,809
--------------------------------------------------------------------------------------------------------------------------------
2. Klehr, Harrison, Harvey,
Branzburg & Ellers LLP Legal February 18, 1999 $ 22,767 $ 22,767 $ 22,767
--------------------------------------------------------------------------------------------------------------------------------
3.
--------------------------------------------------------------------------------------------------------------------------------
4.
--------------------------------------------------------------------------------------------------------------------------------
5.
--------------------------------------------------------------------------------------------------------------------------------
6. TOTAL PAYMENTS TO PROFESSIONALS
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
ADEQUATE PROTECTION PAYMENTS
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
--------------------------------------------------------------------------------------------------------------------------------
1. NOT APPLICABLE DURING THE CURRENT REPORTING PERIOD
--------------------------------------------------------------------------------------------------------------------------------
2.
--------------------------------------------------------------------------------------------------------------------------------
3.
--------------------------------------------------------------------------------------------------------------------------------
4.
--------------------------------------------------------------------------------------------------------------------------------
5.
--------------------------------------------------------------------------------------------------------------------------------
6.
--------------------------------------------------------------------------------------------------------------------------------
7.
--------------------------------------------------------------------------------------------------------------------------------
8.
--------------------------------------------------------------------------------------------------------------------------------
TOTAL
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
<S> <C>
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 8
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
-----------------------------------------------------------------------------------
MONTH: April 30, 1999
-----------------------
----------------------------------------------------------------------------------
QUESTIONNAIRE
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
YES NO
--------------------------------------------------------------------------------------------------------------------------------
1. HAVE ANY ASSETS BEEN SOLD OR TRANSFERRED OUTSIDE
THE NORMAL COURSE OF BUSINESS DURING THIS REPORTING PERIOD? X
--------------------------------------------------------------------------------------------------------------------------------
2. HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT
OTHER THAN A DEBTOR IN POSSESSION ACCOUNT? X
--------------------------------------------------------------------------------------------------------------------------------
3. ARE ANY POSTPETITION RECEIVABLES (ACCOUNTS, NOTES, OR
LOANS) DUE FROM RELATED PARTIES? X
--------------------------------------------------------------------------------------------------------------------------------
4. HAVE ANY PAYMENTS BEEN MADE ON PREPETITION LIABILITIES
THIS REPORTING PERIOD? X
--------------------------------------------------------------------------------------------------------------------------------
5. HAVE ANY POSTPETITION LOANS BEEN RECEIVED BY THE
DEBTOR FROM ANY PARTY? X
--------------------------------------------------------------------------------------------------------------------------------
6. ARE ANY POSTPETITION PAYROLL TAXES PAST DUE? X
--------------------------------------------------------------------------------------------------------------------------------
7. ARE ANY POSTPETITION STATE OR FEDERAL INCOME TAXES
PAST DUE? X
--------------------------------------------------------------------------------------------------------------------------------
8. ARE ANY POSTPETITION REAL ESTATE TAXES PAST DUE? X
--------------------------------------------------------------------------------------------------------------------------------
9. ARE ANY OTHER POSTPETITION TAXES PAST DUE? X
--------------------------------------------------------------------------------------------------------------------------------
10. ARE ANY AMOUNTS OWED TO POSTPETITION CREDITORS X
--------------------------------------------------------------------------------------------------------------------------------
11. HAVE ANY PREPETITION TAXES BEEN PAID DURING THE
REPORTING PERIOD? X
--------------------------------------------------------------------------------------------------------------------------------
12. ARE ANY WAGE PAYMENTS PAST DUE? X
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "YES," PROVIDE A DETAILED
EXPLANATION OF EACH ITEM. ATTACH ADDITIONAL SHEETS IF NECESSARY.
1. Pursuant to an order of the bankruptcy court under 11 U.S.C. SS 105, 363,
365 and 1146(C) approving an asset purchase agreement between the debtors
and AT&T Corp, substantially all of the debtors' assets were assumed, sold
and assigned to AT&T Corp. effective March 31, 1999.
4. Pursuant to an order of the bankruptcy court, the debtors satisfied pre-
petition obligations in the form of cure payments of contracts assigned
to AT&T Corp. in connection with the asset purchase agreement.
10. Pursuant to ordinary course business transactions with creditors
in accordance with standard payment terms, certain amounts were
outstanding.
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
INSURANCE
--------------------------------------------------------------------------------------------------------------------------------
YES NO
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. ARE WORKER'S COMPENSATION, GENERAL LIABILITY AND OTHER
NECESSARY INSURANCE COVERAGES IN EFFECT? X
--------------------------------------------------------------------------------------------------------------------------------
2. ARE ALL PREMIUM PAYMENTS PAID CURRENT? X
--------------------------------------------------------------------------------------------------------------------------------
3. PLEASE ITEMIZE POLICIES BELOW.
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "NO," OR IF ANY POLICIES HAVE
BEEN CANCELLED OR NOT RENEWED DURING THIS REPORTING PERIOD, PROVIDE AN
EXPLANATION BELOW. ATTACH ADDITIONAL SHEETS IF NECESSARY.
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
INSURANCE POLICIES
- ----------------------------------------------------------------------------------------------------------------------------------
TYPE OF PERIOD PAYMENT AMOUNT
POLICY CARRIER COVERED & FREQUENCY
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Directors & Officers Liability Genesis 10/22/98-10/22/99 $175,000 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
2. Directors & Officers Liability Agricultural Excess 10/22/98-10/22/99 $87,500 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
3. Directors & Officers Liability Zurich-American 10/22/98-10/22/99 $92,000 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
4. Directors & Officers Liability Genesis 10/22/98-10/22/99 $60,000 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
5. Directors & Officers Liability (A-side) Executive Risk 12/11/98-10/22/99 $150,000 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
6. Directors & Officers Liability (A-side) Reliance Insurance Co. 12/11/98-10/22/99 $105,000 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
7. Crime Travelers Group 8/6/98-8/6/99 $3,587 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
8. Bond Premium Harry Koch 9/25/98-9/25/99 $500 & annual
- ----------------------------------------------------------------------------------------------------------------------------------
9. Business Auto Travelers Group 3/24/99-3/24/00 $8,106 annual
- ----------------------------------------------------------------------------------------------------------------------------------
10. Boiler & Machinery Travelers Group 3/24/99-3/24/00 $1,547 annual
- ----------------------------------------------------------------------------------------------------------------------------------
11. Commercial Umbrella Travelers Group 3/24/99-3/24/00 $12,212 annual
- -----------------------------------------------------------------------------------------------------------------------------------
12. Kidnap & Ransom Travelers Group 3/24/99-3/24/00 $1,133 annual
- -----------------------------------------------------------------------------------------------------------------------------------
13. Fiduciary Liability Travelers Group 3/24/99-3/24/00 $1,002 annual
- -----------------------------------------------------------------------------------------------------------------------------------
14. Worker's Compensation - Illinois* Wausau 3/24/99-3/24/00 $547 annual
- ----------------------------------------------------------------------------------------------------------------------------------
15. Worker's Compensation - All Other States* Wausau 3/24/99-3/24/00 $17,073 annual
- ----------------------------------------------------------------------------------------------------------------------------------
16. Worker's Compensation - Administration Fee* Picton Cavanaugh 3/24/99-3/24/00 $15,000 annual
- ----------------------------------------------------------------------------------------------------------------------------------
17. Commercial Package Policy Travelers Group 3/24/99-3/24/00 $41,532 annual
- ----------------------------------------------------------------------------------------------------------------------------------
* Worker's Compensation and General Liability premiums are based on
"estimated" payrolls. Premium adjustments may be made as actual payrolls are
known.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
----------------------------------------------------------------------------------
<S> <C>
DEBTORS: WORLDWIDE DIRECT, INC., et al. ACCRUAL BASIS - 9
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
CASE NUMBERS: 99-108 to 99-127 (MFW)
----------------------------------------------------------------------------------
MONTH: April 30, 1999
------------------
</TABLE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
PERSONNEL
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
FULLTIME PART TIME
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total number of employees at beginning of period (as of 4/1/99) 3 0
--------------------------------------------------------------------------------------------------------------------------------
2. Number of employees hired during the period 0 0
--------------------------------------------------------------------------------------------------------------------------------
3. Number of employees terminated or resigned during the period 3 0
--------------------------------------------------------------------------------------------------------------------------------
4. Total number of employees on payroll at end of period (as of 4/30/99) 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
CHANGE OF ADDRESS
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
If your mailing address has changed and you have not previously notified the
DATE of CHANGE: _____________________________-
NEW ADDRESS
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
