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As filed with the Securities and Exchange Commission on August 31, 1999
Registration No. 333-79097
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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WORLD ACCESS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 58-2398004
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
945 EAST PACES FERRY ROAD
SUITE 2200
ATLANTA, GEORGIA 30326
(404) 231-2025
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
MARK A. GERGEL
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
WORLD ACCESS, INC.
945 EAST PACES FERRY ROAD
SUITE 2200
ATLANTA, GEORGIA 30326
(404) 231-2025
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
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Copies of Communications to:
LEONARD A. SILVERSTEIN, ESQ.
LONG ALDRIDGE & NORMAN LLP
5300 ONE PEACHTREE CENTER
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308-3201
(404) 527-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
----------------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration number of the earlier effective registration statement for the
same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
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Proposed Proposed
maximum maximum
Title of shares Amount offering price aggregate Amount of
to be to be per offering registration
registered registered share(1) price(1) fee(1)
- --------------------------------------- -------------------- ----------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share 393,060 $11.469 $4,508,005 $1,253.23
- --------------------------------------- -------------------- ----------------- -------------------- --------------------
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(1) Pursuant to Rule 457(c), the proposed offering price and registration
fee are based upon the average of the high and low prices of the
Registrant's common stock as reported on the Nasdaq National Market on
May 19, 1999. This amount was previously paid when this Registration
Statement was originally filed on May 21, 1999.
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITY HOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
PROSPECTUS
[LOGO] WORLD ACCESS, INC.
393,060 SHARES OF WORLD ACCESS, INC.
COMMON STOCK
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TERMS OF SALE
This prospectus relates to the resale by their holders of shares of
common stock of World Access, Inc. The common stock is listed on the Nasdaq
National Market under the trading symbol "WAXS." On August 30, 1999, the last
reported sale price of the common stock on the Nasdaq National Market was
$13.1875 per share.
The principal executive offices of World Access are located at 945 East
Paces Ferry Road, Suite 2200, Atlanta, Georgia 30326, and the telephone number
is (404) 231-2025.
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THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------
Subject to completion, dated __________, 1999.
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TABLE OF CONTENTS
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Page
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PROSPECTUS SUMMARY ..................................................... 3
RISK FACTORS ........................................................... 3
Risk Factors Related to Us .................................... 3
Risk Factors Related to Our Equipment Group ................... 7
Risk Factors Related to Our Telecommunications Group .......... 8
Risk Factors Related to Our Common Stock ...................... 11
Forward-Looking Statements .................................... 12
RECENT DEVELOPMENTS .................................................... 13
USE OF PROCEEDS ........................................................ 13
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ................... 13
SELLING SECURITY HOLDERS ............................................... 15
PLAN OF DISTRIBUTION ................................................... 16
LEGAL MATTERS .......................................................... 18
EXPERTS ................................................................ 18
WHERE YOU CAN FIND MORE INFORMATION .................................... 19
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ........................ 20
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PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THIS PROSPECTUS
AND DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. FOR A MORE
COMPLETE UNDERSTANDING OF THIS OFFERING, WE ENCOURAGE YOU TO READ THIS
PROSPECTUS IN ITS ENTIRETY, INCLUDING ANY DOCUMENTS INCORPORATED BY REFERENCE IN
THIS PROSPECTUS.
WORLD ACCESS, INC.
We provide international long distance voice and data services and
proprietary network equipment to the global telecommunications markets. Our
World Access Telecommunications Group provides wholesale international long
distance services through a combination of our own international network
facilities, various international routing relationships and resale arrangements
with other international long distance service providers. Our World Access
Equipment Group develops, manufactures and markets digital switches, billing and
network telemanagement systems, cellular base stations, fixed wireless local
loop systems, intelligent multiplexers, digital microwave radio systems and
other telecommunications network products.
THE COMMON STOCK
Securities Offered. 393,060 shares of common stock of World Access
offered for resale for the account of holders of common stock.
Trading. The common stock trades on the Nasdaq National Market under
the symbol "WAXS."
PLAN OF DISTRIBUTION
The holders of the shares of common stock offered by this prospectus
may offer and sell them from time to time pursuant to this prospectus through
registered broker dealers on applicable exchanges or automated interdealer
quotation systems at market prices prevailing at the time of the sale, through
privately negotiated transactions or through other methods described in this
prospectus. The broker dealers may receive compensation in the form of
commissions or otherwise in such amounts as may be negotiated between the
selling security holders and the broker dealers. As of the date of this
prospectus, no agreements have been reached for the resale of securities under
this prospectus or the amount of any compensation to be paid to broker dealers
in connection therewith.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the securities.
Rather, all proceeds will be payable to the selling security holders, less any
compensation payable by the selling security holders to broker dealers in the
form of commissions or otherwise.
RISK FACTORS
You should carefully consider the following factors, in addition to the
other information contained in this prospectus, in evaluating an investment in
the common stock.
RISK FACTORS RELATED TO US
OUR INABILITY TO INTEGRATE ACQUIRED COMPANIES PROFITABLY COULD
ADVERSELY AFFECT OUR FINANCIAL AND OPERATIONAL RESULTS. An element of our growth
strategy is to acquire companies that complement or expand our existing
business. If we are unable to successfully integrate acquired businesses, we may
not be able to realize anticipated cost efficiencies, operational and other
benefits in a timely manner, and we may incur substantial costs and delays or
other operational, technical or financial problems. In addition, the failure to
successfully integrate acquisitions may divert management's attention from our
existing business and may damage our relationships with our key customers and
employees.
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FUTURE ACQUISITIONS MAY SIGNIFICANTLY DECREASE OUR STOCKHOLDERS'
PERCENTAGE OWNERSHIP IN WORLD ACCESS, REDUCE OUR PROFITABILITY AND HINDER OUR
ABILITY TO RAISE CAPITAL. We may issue securities in future acquisitions that
could significantly reduce our stockholders' equity ownership in World Access
and reduce our earnings on a per share basis. We also may incur additional debt
and amortization expense related to goodwill and other intangible assets
acquired in future acquisitions. This additional debt and amortization expense
may reduce significantly our profitability and hinder our ability to raise
capital in the future.
WE MAY BE UNABLE TO MANAGE EFFECTIVELY OUR RAPID GROWTH, WHICH MAY
MATERIALLY ADVERSELY AFFECT THE QUALITY OF OUR PRODUCTS AND SERVICES AND OUR
ABILITY TO RETAIN KEY PERSONNEL. Our rapid growth from recent acquisitions and
the expansion of our operations has placed significant demands on our resources.
If we are unable to manage our growth effectively, the quality of our products
and services and our ability to retain key personnel could be materially
adversely affected. To successfully manage our growth, we will need to continue
to improve our operational, financial and management information systems and to
motivate and effectively manage our employees.
WE MAY SUSTAIN MATERIAL LIABILITY AS A RESULT OF STOCKHOLDER SUITS
AGAINST US. Following our announcement in January 1999 regarding our earnings
expectations for the quarter and year ended December 31, 1998 and the subsequent
decline in the price of our common stock, a number of stockholders filed class
action complaints against us.
The plaintiffs alleged violations of the federal securities laws and
have requested an unspecified amount of damages in their complaints. Although we
do not believe that we have violated the federal securities laws, we may have to
pay substantial damages if the plaintiffs are successful in their actions.
RESTRICTIONS UNDER OUR CREDIT FACILITY MAY REQUIRE US TO MAKE BUSINESS
DECISIONS THAT ARE ADVERSE TO OUR LONG TERM INTERESTS AND THE INTERESTS OF OUR
STOCKHOLDERS. Restrictions under our $75.0 million revolving line of credit
facility may require us to make business decisions that are adverse to our long
term interests and to the interests of the holders of our common stock,
including the holders of the shares purchased pursuant to this prospectus. For
example, we generally must obtain the lenders' consent and sometimes prepay a
portion of the outstanding debt under the credit facility before we can issue
securities, enter into acquisitions for cash or securities, dispose of our
assets or incur additional debt. We also must maintain certain operating ratios
and achieve specified financial thresholds.
Upon a default under our credit facility, the lenders may require us to
immediately repay the entire amount outstanding under the credit facility. If we
cannot repay these borrowings, we may need to seek the protection of the federal
bankruptcy laws to continue operating our business. Even if we were able to
repay all amounts owed under the credit facility, our business, financial
condition and results of operations would be materially adversely affected due
to the resulting loss in liquidity. In addition, in the event of a default under
the credit facility that we do not cure, the lenders could foreclose on the
collateral securing our obligations, which would result in the lenders owning
and having effective control over our operations.
AS A HOLDING COMPANY, OUR LIQUIDITY COULD BE ADVERSELY AFFECTED IF OUR
SUBSIDIARIES ARE UNABLE TO DISTRIBUTE MONEY TO US. As a holding company without
significant income from operations, we are dependent upon the income from our
operating subsidiaries to meet our operating expenses. If our operating
subsidiaries are unable to pay dividends or
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otherwise distribute amounts to us sufficient to cover our operating expenses,
then we may be subject to liquidity problems, even if, on a consolidated basis,
our operating subsidiaries are profitable.
WE MAY LOSE MARKET SHARE AND FACE PRICING PRESSURES IF WE ARE NOT ABLE
TO COMPETE SUCCESSFULLY WITH OTHER TELECOMMUNICATIONS FIRMS. The segments of the
telecommunications industry in which we operate are intensely competitive. We
believe that competition will continue to increase, placing downward pressure on
prices, thus adversely affecting our gross margins. Many of the long distance
providers and telecommunications equipment manufacturers with whom we compete
have significantly more extensive engineering, manufacturing, marketing,
financial and technical resources than we. We are uncertain whether we can
continue to compete successfully with our competitors.
Additionally, the telecommunications industry is in a period of rapid
technological evolution, marked by the introduction of competitive product and
service offerings, such as the utilization of the Internet for international
voice and data communications. Technological developments by our competitors may
challenge our competitive position or increase the amount of expenditures that
will be required for us to respond to a rapidly changing technological
environment.
WE MAY BE UNABLE TO PROTECT AND MAINTAIN THE COMPETITIVE ADVANTAGE OF
OUR INTELLECTUAL PROPERTY RIGHTS. We rely on contractual rights, trade secrets,
trademarks and copyrights to establish and protect our proprietary rights in our
products. In the future, we may be required to bring or defend against
litigation to enforce any patents issued or assigned to us, to protect
trademarks, trade secrets and other intellectual property rights we own, to
defend against claimed infringement of the rights of others and to determine the
scope and validity of the proprietary rights of others. Regardless of the
ultimate outcome, any litigation could be costly and could divert management's
attention from the operations of our business. Adverse determinations in
litigation could result in the loss of our proprietary rights, subject us to
significant liabilities, require us to seek licenses from third parties or
prevent us from manufacturing or selling our products, any of which could have a
material adverse effect on our business, financial condition and results of
operations.
Although we presently hold several patents for certain of our existing
products and have several patent applications pending, not all of our products
are covered by patents. We have not conducted a formal patent search relating
generally to the technology used in our products. In addition, since a patent
application in the United States is not publicly disclosed until the patent is
issued and foreign patent applications generally are not publicly disclosed for
at least a portion of the time that they are pending, applications may have been
filed which, if issued as patents, would relate to our products.
Software comprises a substantial portion of the technology in our
products. The scope of protection accorded to patents covering software-related
inventions is evolving and is subject to a degree of uncertainty that may
increase our risk of litigation and costs if we discover the existence of third
party patents related to our software products or if such patents are asserted
against us in the future.
IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED MANAGEMENT AND
TECHNICAL PERSONNEL, WE MAY NOT BE ABLE TO SUCCESSFULLY OPERATE OUR BUSINESS. We
are highly dependent on the services of several key executive officers and
technical employees, particularly John D. Phillips, our Chief Executive Officer.
In addition, we will need to hire additional skilled personnel to support the
continued growth of our business. The market for skilled personnel, especially
those with the technical abilities we
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require, is currently very competitive, and we must compete with much larger
companies with significantly greater resources to attract and retain these
persons. If we are unable to retain the services of Mr. Phillips and other key
management and technical personnel or to attract such personnel in the future,
we may not be able to successfully operate our business.
GOVERNMENT REGULATORY POLICIES MAY INCREASE PRICING PRESSURES IN OUR
INDUSTRY AND DECREASE DEMAND FOR OUR SERVICES AND PRODUCTS. We expect that
government regulatory policies, including the Telecommunications Act of 1996,
are likely to continue to have a major impact on the pricing of both existing
and new public network services and possibly accelerate the entrance of new
competitors and consolidation of the industry. These trends may decrease demand
for our services and products that support these services. Tariff rates, whether
determined autonomously by telecommunications service providers or in response
to regulatory directives, may affect the cost effectiveness of deploying public
network services. User uncertainty regarding future policies may also decrease
demand for our telecommunications products and services.
OUR SIGNIFICANT RELIANCE ON INTERNATIONAL SALES COULD ADVERSELY AFFECT
OUR FINANCIAL CONDITION BECAUSE OF INTERNATIONAL REGULATORY CHANGES, POLITICAL
AND ECONOMIC INSTABILITY AND COLLECTION EFFORTS. International sales represented
approximately 10.1% of our total sales in the six months ended June 30, 1999 and
14.8% of our total sales in the year ended December 31, 1998. We intend to
increase our international sales, which are subject to inherent risks,
including:
- - unexpected changes in regulatory requirements, tariffs or other
barriers;
- - difficulties in staffing and managing foreign operations;
- - longer payment cycles;
- - unstable political and economic environments;
- - greater difficulty in accounts receivable collection;
- - potentially adverse tax consequences;
- - dependence on foreign partners; and
- - fluctuations in foreign currency values.
WE MAY FACE LIABILITY UNDER THE FOREIGN CORRUPT PRACTICES ACT. The
international operations of our Telecommunications Group are subject to the
Foreign Corrupt Practices Act, which generally prohibits U.S. companies and
their intermediaries from bribing foreign officials for the purpose of obtaining
or keeping business. We may face liability under the Foreign Corrupt Practices
Act as a result of past or future actions taken without the knowledge of our
Telecommunications Group by agents, strategic partners and other intermediaries.
OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND DELAWARE LAW MAY
INHIBIT A TAKEOVER OF WORLD ACCESS. Certain provisions of our restated
Certificate of Incorporation, our restated Bylaws and the Delaware General
Corporation Law could, together or separately, discourage potential acquisition
proposals or delay or prevent a change in control. Currently, those provisions
include a classified Board of Directors, a prohibition on written consents in
lieu of meetings of the stockholders and the authorization to issue up to
10,000,000 shares of preferred stock and up to 150,000,000 shares of common
stock. Our Board of Directors has the power to issue any or all of these
additional shares without stockholder approval, subject to the rules of the
Nasdaq Stock Market, and the preferred shares can be issued with such rights,
preferences and limitations as may be determined by the Board. The rights of the
holders of common stock will be subject to, and may be adversely affected by,
the commitments or contracts to issue any additional shares of common stock or
any shares of preferred stock. Authorized and unissued preferred stock and
common stock could delay, discourage, hinder or preclude our unsolicited
acquisition, could
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make it less likely that the stockholders receive a premium for their shares as
a result of any such attempt and could adversely affect the market price of, and
the voting and other rights of, the holders of outstanding shares of common
stock.
WE MAY LOSE REVENUE OR INCUR ADDITIONAL COSTS BECAUSE OF A FAILURE TO
ADEQUATELY ADDRESS THE YEAR 2000 ISSUE. Many existing computer programs use only
two digits to identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming change in the
century. If not corrected, many computer applications could fail or create
erroneous results by or at the Year 2000.
We are in the final phase of completing our Year 2000 Readiness Plan
which is the remediation phase. Until we have completed our verification testing
of our remediation efforts, we cannot be certain that our efforts to address
Year 2000 issues are appropriate, adequate or complete. In addition, we may be
adversely affected by Year 2000 problems experienced by suppliers or customers.
Although we are conducting an external review of third parties with whom we do
business, we are limited in our ability to determine the ability of these
parties to address Year 2000 issues.
As a result, we may suffer various consequences, including:
- - We may experience a significant number of operational inconveniences
and inefficiencies for us, our customers and our suppliers that may
divert our time and attention and financial and human resources from
our ordinary business activities;
- - We and companies on which we rely may suffer serious system failures
that may require significant efforts by us, our customers and our
suppliers to prevent or alleviate material business disruptions; and
- - We may experience a significant loss of revenues or incur a significant
amount of unanticipated expenses.
RISK FACTORS RELATED TO OUR EQUIPMENT GROUP
THE LOSS OF, OR A MATERIAL REDUCTION IN ORDERS BY, ONE OR MORE OF OUR
EQUIPMENT GROUP'S KEY CUSTOMERS COULD MATERIALLY DECREASE OUR REVENUES. A small
number of customers historically has accounted for a significant percentage of
our Equipment Group's total sales. For the six months ended June 30, 1999, one
customer accounted for 10.1% of our Equipment Group's total sales and our top
ten customers accounted for 51.8% of total sales. For the year ended December
31, 1998, no customer individually accounted for more than 10.0% of our
Equipment Group's total sales and our top ten customers accounted for 30.1% of
our Equipment Group's total sales. Our customers typically are not obligated
contractually to purchase any quantity of products or services in any particular
period. The loss of, or a material reduction in orders by, one or more key
customers could materially decrease our revenues.
RAPID TECHNOLOGICAL DEVELOPMENT AND NEW PRODUCTS INTRODUCED BY OUR
COMPETITORS COULD MAKE OUR PRODUCTS OBSOLETE. Our failure to introduce new
products and services and to respond to industry changes on a timely and cost
effective basis could make our products obsolete and could impair our ability to
meet the demands of our customers. The introduction and marketing of new or
enhanced products and services require us to manage the transition from existing
products in order to minimize disruption in customer purchasing patterns. There
can be no assurance that we will successfully manage the transition to new or
enhanced products or services. Further, there can be no assurance that products,
services or technologies developed by others will not render our products,
services or technologies obsolete.
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From time to time, we or our competitors may announce new products,
services, capabilities or technologies that have the potential to replace or
shorten the life cycle of our existing product and service offerings. There can
be no assurance that announcements of product enhancements or new product or
service offerings will not cause customers to defer purchasing our existing
products or cause resellers to return products. Any such deferrals,
cancellations or returns could materially decrease our revenues.
OUR NEW PRODUCTS MAY CONTAIN UNDETECTED ERRORS RESULTING IN THE LOSS OR
DELAY OF MARKET ACCEPTANCE OF OUR PRODUCTS. Products as complex as ours may
contain undetected errors or failures when first introduced or as new versions
are released. Such errors have occurred in our products in the past. The
occurrence of these errors could result in the following:
- - the loss or delay in market acceptance of our products;
- - the diversion of development resources;
- - damage to our reputation; or
- - increased service or warranty costs.
OUR RELIANCE ON THIRD PARTY SUPPLIERS FOR CERTAIN PRODUCTS AND KEY
COMPONENTS COULD HINDER OUR ABILITY TO SATISFY CUSTOMER DEMANDS OR OUR GROWTH
OBJECTIVES. Failure to obtain products and key components from third party
suppliers on a timely and cost effective basis could have a material adverse
effect on our business, financial condition and results of operations. We
purchase substantially all of our components and other parts from suppliers on a
purchase order basis and do not maintain long-term supply arrangements. We
obtain several components, primarily custom hybrid integrated circuits, from a
single source. Accordingly, there can be no assurance that we will be able to
continue to obtain sufficient quantities of products or key components as
required or that these products or key components, if obtained, will be
available to us on commercially favorable terms.
DELAYS AND COSTS INCURRED IN ACHIEVING COMPLIANCE WITH GOVERNMENT
REGULATIONS AND EVOLVING INDUSTRY STANDARDS COULD ADVERSELY AFFECT OUR REVENUES.
Any products' failure to comply with the various existing and evolving
regulations and industry standards or the delays and costs incurred in achieving
compliance with these regulations and standards could materially decrease our
revenues, increase our costs and reduce our profitability. Our products must
meet a significant number of voice and data communications regulations and
standards, some of which are evolving as new technologies are deployed. In the
United States, these products and services must comply with various regulations
promulgated by the Federal Communications Commission, as well as with standards
established by Bell Communications Research. Internationally, our products and
services must comply with standards established by telecommunications
authorities in various countries, as well as with recommendations of the
International Telecommunications Union.
RISK FACTORS RELATED TO OUR TELECOMMUNICATIONS GROUP
OUR TELECOMMUNICATIONS GROUP MAY LOSE SOME EXISTING AND POTENTIAL
CUSTOMERS BECAUSE OF COMPETITION AND CONSOLIDATION. A majority of the U.S.-based
international telecommunications services revenue is currently generated by AT&T
and Sprint Corporation. Our Telecommunications Group also competes with MCI
WorldCom, Pacific Gateway Exchange, Inc. and other foreign and U.S.-based long
distance providers, including the regional Bells, which presently have FCC
authority to resell and route international telecommunication services
originating outside of their respective in-region states. Many of these
competitors have considerably greater financial and other resources and more
extensive domestic and international communications networks than our
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Telecommunications Group. Our business would be materially adversely affected to
the extent that a significant number of such customers limit or cease doing
business with our Telecommunications Group for competitive or other reasons.
Consolidation in the telecommunications industry could not only create even
larger competitors with greater financial and other resources, but could also
adversely affect us by reducing the number of potential customers for our
Telecommunications Group's services.
TERMINATION OF OUR CARRIER SERVICE AGREEMENT WITH WORLDCOM NETWORK
SERVICES COULD MATERIALLY ADVERSELY AFFECT OUR REVENUES. Our Telecommunications
Group has entered into a Carrier Service Agreement with WorldCom Network
Services, Inc., a wholly owned subsidiary of MCI WorldCom pursuant to which
WorldCom Network Services purchases international long distance services on a
wholesale basis. WorldCom Network Services presently provides a significant
portion of our service revenues. Termination of the Service Agreement, or any
reduction in services provided thereunder, could materially decrease our
revenues. WorldCom Network Services is obligated to purchase from our
Telecommunications Group at least $25 million a month of such services, provided
the services are of acceptable quality and the rates quoted are at least equal
to the rates WorldCom Network Services is obtaining from other third party
providers. The service agreement is for a one-year term but automatically renews
each month, subject to a one year termination notice. Revenues attributable to
the Service Agreement for the first six months of 1999 comprised approximately
70% of total revenues of our Telecommunications Group for this period.
TECHNICAL DIFFICULTIES WITH OR FAILURES IN OUR NETWORK COULD RESULT IN
DISSATISFIED CUSTOMERS AND LOSS OF REVENUE. Technical difficulties with or
failures in our telecommunications network could result in dissatisfied
customers and lost revenue. For example, a failure in a portion of our network
could prevent us from delivering telephone calls initiated by our customers.
Additionally, technical difficulties with the network could cause the loss of
call detail record information, which is the basis for our Telecommunications
Group's ability to process and substantiate customer billings. Components of our
Telecommunications Group's network have failed in the past which have had a
material adverse effect on our Telecommunications Group's operating results.
There can be no assurance that similar or other failures will not occur in the
future.
LIMITED LONG-TERM PURCHASE AND RESALE AGREEMENTS AND PRICING PRESSURES
FOR TRANSMISSION CAPACITY COULD ADVERSELY AFFECT OUR GROSS MARGINS. A
substantial portion of transmission capacity used by our Telecommunications
Group is obtained on a variable, per minute and short-term basis, subjecting our
Telecommunications Group to the possibility of unanticipated price increases and
service cancellations. Since our Telecommunications Group does not generally
have long-term arrangements for the purchase or resale of international long
distance services, and since rates fluctuate significantly over short periods of
time, our Telecommunications Group's gross margins are subject to significant
fluctuations over short periods of time. Our Telecommunications Group's gross
margins also may be negatively impacted in the longer term by competitive
pricing pressures.
FOREIGN GOVERNMENTS MAY ATTEMPT TO PREVENT OUR TELECOMMUNICATIONS GROUP
FROM CONDUCTING ITS BUSINESS. Governments of many countries exercise substantial
influence over various aspects of the telecommunications market. In some cases,
the government owns or controls companies that are or may become competitors of
our Telecommunications Group or companies, such as national telephone companies,
upon which our Telecommunications Group and our foreign partners may depend for
required interconnections to local
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telephone networks and other services. Accordingly, government actions in the
future could have a material adverse effect on our Telecommunications Group's
operations. In highly regulated countries in which our Telecommunications Group
is not dealing directly with the dominant local exchange carrier, the dominant
carrier may have the ability to route service to our Telecommunications Group or
our foreign partner and, if this occurs, we may have limited or no recourse. In
countries where competition is not yet fully established and our
Telecommunications Group is dealing with an alternative operator, foreign laws
may prohibit or impede new operators from offering services in these markets.
We currently plan to expand our Telecommunications Group's foreign
operations as these markets increasingly permit competition. The nature, extent
and timing of our foreign operations, however, will be determined, in part, by
the actions taken by foreign governments to permit competition and the response
of incumbent carriers to these efforts. The regulatory authorities in these
countries may not provide our Telecommunications Group with practical
opportunities to compete in the near future, or at all, and we may not be able
to take advantage of any such liberalization in a timely manner.
CERTAIN OF OUR TELECOMMUNICATIONS GROUP'S ARRANGEMENTS WITH FOREIGN
OPERATORS MAY BE INCONSISTENT WITH FCC POLICIES AND COULD SUBJECT US TO MONETARY
PENALTIES OR TERMINATION OF NONCOMPLIANT AGREEMENTS. The FCC could determine, by
its own actions or in response to a third party's filing, that certain of our
Telecommunications Group's services, service arrangements, agreements with
foreign carriers, network-based or resale services or reports do not or did not
comply with FCC policies and rules. If this occurred, the FCC could order us to
terminate noncompliant arrangements, fine us or revoke our authorizations. The
FCC's international private line resale policy limits the conditions under which
a carrier may connect international private lines to the telephone network at
one or both ends to provide telephone services, commonly known as International
Simple Resale. Certain of our Telecommunications Group's service arrangements
with foreign operators may be inconsistent with the FCC's international private
line resale policy and our Telecommunications Group's existing International
Simple Resale authorization.
The FCC's international private line resale policy limits the
conditions under which a carrier may connect international private lines to the
telephone network at one or both ends to provide telephone services, commonly
known as International Simple Resale. Certain of our Telecommunications Group's
service arrangements with foreign operators may be inconsistent with the FCC's
international private line resale policy and our Telecommunications Group's
existing International Simple Resale authorization.
The FCC's International Settlement Policy limits the arrangements which
U.S. international carriers may enter into with certain foreign carriers for
exchanging telecommunications traffic, which the FCC terms International Message
Telephone Service. It is possible that the FCC could find that certain of our
Telecommunications Group's arrangements with foreign operators are inconsistent
with the International Settlement Policy.
Our Telecommunications Group uses both network-based services and
resale services to route its international traffic. The FCC routinely approves
arrangements by U.S. international carriers. The FCC's rules also permit
carriers in many cases to use International Simple Resale facilities to route
traffic via a third country for resale through the telephone network. Certain of
our Telecommunications Group's network-based services or resale services may
violate the International Settlement Policy or other FCC policies.
RECENT FCC ACTIONS MAY ADVERSELY AFFECT OUR TELECOMMUNICATIONS GROUP BY
INCREASING COMPETITION, WHICH MAY INCREASE PRICING PRESSURES AND DECREASE DEMAND
FOR OUR SERVICES. Recent FCC rulemaking orders and other actions have lowered
the entry barriers for new carriers and resale international carriers by
streamlining the processing of new applications and by eliminating the
international settlements policy for arrangements with foreign carriers that
lack market power and on other selected
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<PAGE> 13
routes. In addition, the FCC's rules implementing the World Trade Organization
Basic Telecommunications Agreement presume that competition will be advanced by
the U.S. entry of carriers and resale carriers from World Trade Organization
member countries, thus further increasing the number of potential competitors in
the U.S. market and the number of carriers which may also offer end-to-end
services. Increased competition may increase pricing pressures, reduce our
margins and decrease demand for our services.
FCC INTERVENTION REGARDING THE SETTLEMENT RATES CHARGED BY FOREIGN
CARRIERS MAY DISRUPT OUR TRANSMISSION ARRANGEMENTS TO CERTAIN COUNTRIES. The FCC
recently has sought to reduce the foreign routing costs of U.S. international
carriers by prescribing maximum or benchmark settlement rates which foreign
carriers may charge U.S. carriers for routing telecommunications traffic. The
FCC's benchmarks order was recently upheld by the U.S. Court of Appeals for the
District of Columbia Circuit. The FCC's action may reduce our Telecommunications
Group's settlement costs, although the costs of other U.S. international
carriers also may be reduced in a similar fashion. The FCC has not stated how it
will enforce the new settlement benchmarks if U.S. carriers are unsuccessful in
negotiating settlement rates at or below the prescribed benchmarks. Any future
FCC intervention could disrupt our Telecommunications Group's transmission
arrangements to certain countries or require our Telecommunications Group to
modify its existing arrangements.
AN FCC ORDER CURRENTLY UNDER REVIEW MAY AFFECT OUR ABILITY TO PRICE OUR
SERVICE OFFERINGS. The Telecommunications Act of 1996 permits the FCC to forbear
enforcement of the tariff provisions in such act, which apply to all interstate
and international carriers, and the U.S. Court of Appeals for the District of
Columbia Circuit is currently reviewing an FCC order directing all domestic
interstate carriers to de-tariff their offerings. The FCC's order, which is
stayed pending the court's review, only applies to domestic services. However,
subject to the court's decision, the FCC may forbear its current tariff rules
for U.S. international carriers, such as our Telecommunications Group, or order
these carriers to de-tariff their services. In that event, our
Telecommunications Group would have greater flexibility in pricing its service
offerings and to compete, although any such FCC action likely would grant other
non-dominant international carriers equivalent freedom. The FCC routinely
reviews the contribution rate for various levels of regulatory fees, including
the rate for fees levied to support universal service, which fees may be
increased in the future for various reasons, including the need to support the
universal service programs mandated by The Telecommunications Act of 1996, the
total costs for which are still under review by the FCC.
REGULATION OF CUSTOMERS MAY MATERIALLY ADVERSELY AFFECT OUR REVENUES BY
DECREASING THE VOLUME OF TRAFFIC OUR TELECOMMUNICATIONS GROUP RECEIVES FROM
MAJOR CUSTOMERS. Our Telecommunications Group's customers are also subject to
actions taken by domestic or foreign regulatory authorities that may affect the
ability of customers to deliver traffic to our Telecommunications Group.
Regulatory sanctions have been imposed on certain of our Telecommunications
Group's customers in the past. While such sanctions have not adversely impacted
the volume of traffic received by our Telecommunications Group from such
customers to date, future regulatory actions could materially adversely affect
the volume of traffic received from a major customer, which could materially
decrease our revenues.
RISK FACTORS RELATED TO OUR COMMON STOCK
THE PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE AND COULD CONTINUE TO
FLUCTUATE SUBSTANTIALLY. Our common stock is traded on the Nasdaq National
Market. The market price of our common stock has been volatile and
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<PAGE> 14
could fluctuate substantially based on a variety of factors, including the
following:
- - announcements of new products or technological innovations by us or
others;
- - variations in our results of operations;
- - the gain or loss of significant customers;
- - the timing of acquisitions of businesses or technology licenses;
- - legislative or regulatory changes;
- - general trends in the industry;
- - market conditions; and
- - analysts' estimates and other events in our industry.
In addition, the stock market has experienced extreme price and volume
fluctuations that have particularly affected the market price for many
technology companies and that have often been unrelated to the operating
performance of these companies. These broad market fluctuations may adversely
affect the market price of our common stock.
SIGNIFICANT VARIANCE IN OUR QUARTERLY OPERATING RESULTS COULD ADVERSELY
AFFECT THE PRICE OF OUR COMMON STOCK. In future quarters, our results of
operations may fail to meet the expectations of market analysts and investors,
which may adversely affect the price of our common stock. Our quarterly
operating results have varied significantly in the past and are expected to do
so in the future.
In response to competitive pressures or new product and service
introductions, we may take certain pricing or marketing actions that could
materially adversely affect our quarterly operating results. We base our expense
levels, in part, on our expectations of future sales. If future sales levels are
below expectations, then we may be unable to adjust spending sufficiently in a
timely manner to compensate for the unexpected sales shortfall.
Accordingly, we believe that you should not rely upon period-to-period
comparisons of our operating results as an indication of our future performance.
In addition, the operating results of any quarterly period are not indicative of
results that you should expect for a full fiscal year. Historically, we have
generated a disproportionate amount of our operating revenues toward the end of
each quarter, making precise prediction of revenues and earnings particularly
difficult and resulting in risk of variance of actual results from those
forecast at any time.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain certain information regarding our plans and strategies that
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934. When used
in this prospectus or in the documents incorporated by reference, the words
"may," "could," "should," "would," "believe," "anticipate," "estimate,"
"expect," "intend," "plan" and similar terms and/or expressions are intended to
identify forward-looking statements. These statements reflect our assessment of
a number of risks and uncertainties and our actual results could differ
materially from the results anticipated in these forward-looking statements. Any
forward-looking statement speaks only as of the date of this prospectus or the
documents incorporated by reference, and we undertake no obligation to update
any forward-looking statements to reflect events or circumstances after the date
on which such statement is made or to reflect the occurrence of an unanticipated
event.
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<PAGE> 15
RECENT DEVELOPMENTS
On August 17, 1999 we announced that we had entered into a definitive
merger agreement with FaciliCom International, Inc., a privately owned company
that is a leading facilities-based provider of European and U.S. originated
international long-distance voice, data and Internet services. Pursuant to the
terms of the agreement, the shareholders of FaciliCom will receive approximately
$436 million in consideration, primarily in the form of World Access Convertible
Preferred Stock, Series C. The Preferred Stock bears no dividend and is
convertible into shares of World Access common stock at a conversion rate of
$20.38 per common share, subject to potential adjustment under certain
circumstances. If the closing trading price of World Access common stock exceeds
$20.38 per share for 60 consecutive trading days, the Preferred Stock will
automatically convert into common stock. Initially, the holders of the Preferred
Stock will be entitled to elect four new directors to the World Access Board of
Directors. Except for certain other specified matters, the holders of the
Preferred Stock will vote on an as-converted basis with the holders of World
Access common stock. In addition, World Access will assume $300 million of
FaciliCom 10.5% Senior Notes due 2008.
The transaction is conditioned upon a majority of the holders of
FaciliCom Senior Notes allowing World Access to assume the Senior Notes, waive
any put rights triggered by the merger and make certain amendments. The merger
is also subject to the approval of World Access shareholders and certain
regulatory agencies. Certain shareholders of World Access (including MCI
WorldCom, Brown Brothers Harriman and senior members of management) and the
Armstrong Group of Companies, FaciliCom's majority shareholder, have entered
into a Voting Agreement whereby they have committed to vote in favor of the
merger. The merger is expected to close in the fourth quarter of 1999 and will
be accounted for as a purchase transaction.
USE OF PROCEEDS
Neither we nor WA Telcom will receive any proceeds from the sale of the
securities offered by this prospectus. Rather, all proceeds will be payable
solely to the selling security holders, less any compensation payable by the
selling security holders to broker dealers in the form of commissions or
otherwise.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
The following Unaudited Pro Forma Combined Statement of Operations of
World Access gives effect to the consummation of the following two transactions
that World Access completed during 1998: (1) the acquisition of Telco Systems,
Inc. which was completed on November 30, 1998 and (2) the acquisition of Cherry
Communications Incorporated, d/b/a Resurgens Communications Group, and Cherry
Communications U.K. Limited which was completed on December 15, 1998, as if the
acquisitions had occurred on January 1, 1998. Cherry Communications Incorporated
and Cherry Communications U.K. are collectively referred to in these pro forma
combined financial statements as Resurgens. Both of the acquisition transactions
above have been accounted for using the purchase method of accounting.
In connection with the acquisitions, World Access recorded a charge
representing the portion of the purchase price allocated to in-process research
and development of $50.3 million. Since this charge is directly related to the
acquisition and will not recur, the Unaudited Pro Forma Combined Statements of
Operations have been prepared excluding this one-time non-recurring charge.
The Unaudited Pro Forma Combined Statement of Operations is not
necessarily indicative of the future results of operations or results that might
have been achieved if the acquisitions had been consummated as of the indicated
dates. The Unaudited Pro Forma Combined Statement of Operations should be read
in conjunction with the historical consolidated financial statements of World
Access, Resurgens and Telco, and the related notes to those historical
consolidated financial statements.
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<PAGE> 16
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
World Access(A) Telco Resurgens Adjustments Combined
--------------- ----- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
Equipment Sales $ 138,900 $ 96,367 $ $ $ 235,357
Carrier service 13,143 126,324 139,467
----------- -------- -------- --------- ---------
Total Sales 152,133 96,367 126,324 0 374,824
Cost of equipment sold 73,842 64,416 (400) (B) 137,858
Write-down of inventories 9,292 9,292
Cost of carrier sales 12,522 145,043 (1,230) (C) 156,335
Amortization of acquired technology 446 3,896 (D) 4,342
----------- -------- -------- --------- ---------
Total Cost of Sales 96,102 64,416 145,043 2,266 307,827
----------- -------- -------- --------- ---------
Gross Profit 56,031 31,951 (18,719) (2,266) 66,997
Research and development 6,842 15,265 22,107
Selling, general and administrative 19,984 22,884 38,569 779 (E) 82,216
Amortization of goodwill 4,255 5,574 (F) 9,829
In-process research and development 100,300 (50,300) (G) 50,000
Goodwill impairment 6,200 6,200
Provision for doubtful accounts 11,332 2,294 13,626
Restructuring and other charges 17,240 17,240
----------- -------- -------- --------- ---------
Operating Income (Loss) (110,122) (6,198) (59,582) 41,681 (134,221)
Interest and other income 3,419 467 (817) 3,069
Interest expense (6,832) (8,640) (15,472)
----------- -------- -------- --------- ---------
Income (Loss) from Continuing
Operations Before Income
Taxes and Minority Interests (113,535) (5,731) (69,039) 41,681 (146,624)
Income taxes (benefits) (1,387) (1,172) (H) (2,559)
----------- -------- -------- --------- ---------
Income (Loss) from Continuing
Operations Before Minority (112,148) (5,731) (69,039) 42,853 (144,065)
Interests
Minority interests in earnings of
subsidiary 2,497 2,497
----------- -------- -------- --------- ---------
Income (Loss) From Continuing
Operations $ (114,645) $ (5,731) $(69,039) $ 42,853 $(146,562)
========== ========= ======== ========= =========
Income (Loss) Per Common Share
From Continuing Operations
Basic $ (5.19) $ (4.29)
========== =========
Diluted $ (5.19) (4.29)
========== =========
Weighted Average Shares Outstanding
Basic 22,073 34,127
========== =========
Diluted 22,073 34,127
========== =========
</TABLE>
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<PAGE> 17
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1998
(A) This column represents the historical results of operations of
World Access and its subsidiaries for the year ending December
31, 1998. Included in these results are the results for the
following businesses from their respective dates of
acquisition: Advanced TechCom, Inc. - January 1998; NACT
Telecommunications, Inc. - February 1998; Telco - November
1998; and Resurgens - December 1998.
(B) Record an adjustment to depreciation expense related to the
write-down of certain redundant equipment at Telco.
(C) Record an adjustment to depreciation expense for the
adjustment to fair market value of switching equipment and the
adjustment to amortization expense for the adjustment to fair
market values of the license agreements at Resurgens.
(D) Amortization of acquired technology relating to the
acquisition of Telco over 8 years.
(E) Amortization of trademarks of Telco over 8 years.
(F) Amortization of unallocated excess purchase price over net
assets acquired over 15 - 20 years.
(G) Eliminate the one-time non-recurring in-process research and
development charge recorded in connection with the Telco
acquisition.
(H) Adjust tax provision for the tax benefit of the pro forma
adjustments.
SELLING SECURITY HOLDERS
World Access issued the shares of common stock offered by this
prospectus in private placement transactions with the holders named below in
transactions exempt from the registration requirements of the Securities Act.
The selling security holders may from time to time offer and sell any or all of
these shares pursuant to this prospectus. For purposes of this prospectus, the
term selling security holder includes the holders named below, the beneficial
owners of these shares and their transferees, pledgees, donees or other such
successors.
The following table sets forth information with respect to the selling
security holders and the shares beneficially owned by them as of August 30,
1999, that they may offer pursuant to this prospectus. We have obtained this
information from the selling security holders.
<TABLE>
<CAPTION>
Shares of Common Stock Shares of Shares of Common Percentage of Common
Beneficially Common Stock Stock Beneficially Owned Stock Beneficially Owned
Selling Security Holders Owned Prior to Offering(1) Offered Hereby Upon Completion of Offering Upon Completion of Offering
- ------------------------ -------------------------- -------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C>
James E. Bennett (2) 97,389 35,797 61,592 *
Paul G. Blaser (3) 17,941 3,333 14,608 *
Thomas R. Canham (4) 221,822 96,000 125,822 *
Drew H. Davis (5) 6,586 1,671 4,915 *
Eagle Telephonics, Inc. 114,946 114,946 0 *
Largo Holdings Ltd. (6) 161,131 35,797 125,334 *
Moore Family Holdings Ltd. (7) 14,467 6,226 8,241 *
Lewis L. Roberts, Jr. (8) 7,525 1,645 5,880 *
Brian A. Schuchman (9) 221,822 96,000 125,822 *
Robert E. Schwartz (10) 3,823 1,645 2,718 *
------- ------- -------
Totals 867,452 393,060 474,932
</TABLE>
- -------------
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<PAGE> 18
* Less than one percent.
(1) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Exchange Act. Unless otherwise noted, World Access believes
that all persons named in the table have sole voting and investment
power with respect to the shares beneficially owned by them.
(2) Includes 31,592 shares which were placed in escrow in connection with
World Access' acquisition of Galaxy Engineering Services, Inc. in
August 1997. These shares will be released to Mr. Bennett, a former
principal of Galaxy, upon Galaxy's realization of certain levels of
profitability during 1999 and 2000.
(3) Includes (a) 2,942 shares which were placed in escrow in connection
with the acquisition of Galaxy and (b) 5,666 shares pledged to World
Access to secure a promissory note due March 31, 2000. Mr. Blaser is
the Vice President of U.S. Operations for Galaxy.
(4) Includes 85,000 shares which were placed in escrow in connection with
World Access' acquisition of Desert Installation Systems, Inc. in
February 1999. These shares will be released to Mr. Canham if World
Access realizes certain levels of profitability from the operations of
Desert during 1999 and 2000. Mr. Canham is an Executive Vice President
of Cellular Infrastructure Supply, Inc., a wholly-owned subsidiary of
World Access.
(5) Includes (a) 1,474 shares which were placed in escrow in connection
with the acquisition of Galaxy and (b) 2,857 shares pledged to secure
the Galaxy promissory note. Mr. Davis is the Director of Engineering
for Galaxy.
(6) Includes 31,594 shares which were placed in escrow in connection with
the acquisition of Galaxy. Joseph W. Forbes, Jr., President of Galaxy,
is the general partner of Largo Holdings Ltd.
(7) Includes 5,494 shares which were placed in escrow in connection with
the acquisition of Galaxy. Roy J. Moore, a former principal of Galaxy,
is the general partner of Moore Family Holdings Ltd.
(8) Includes (a) 1,452 shares which were placed in escrow in connection
with the acquisition of Galaxy and (b) 2,928 shares pledged to secure
the Galaxy promissory note. Mr. Roberts is the Director of Advanced
Technology for Galaxy.
(9) Includes 85,000 shares which were placed in escrow in connection with
the acquisition of Desert. Mr. Schuchman is the President of Cellular
Infrastructure.
(10) Includes 1,452 shares which were placed in escrow in connection with
the acquisition of Galaxy. Mr. Schwartz is the former Controller of
Galaxy.
Except as noted above, none of the selling security holders has, or
within the past three years has had, any position, office or other material
relationship with World Access or any of our predecessors or affiliates. The
selling security holders identified above may have sold, transferred or
otherwise disposed of all or a portion of their shares, in transactions exempt
from the registration requirements of the Securities Act, since the date on
which they provided the information regarding their shares. If required, we may
identify and provide additional selling security holders and information with
respect to them in one or more prospectus supplements.
PLAN OF DISTRIBUTION
The selling security holders may offer all or part of the shares
included in this prospectus from time to time in transactions on applicable
exchanges or automated interdealer quotation systems, in privately negotiated
transactions, through the writing of options on the securities offered by this
prospectus, or a combination of such methods of sale, at fixed prices that may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Each selling security
holder will act independently of us in making decisions with respect to the
timing, manner and size of each sale. The methods by which the selling security
holders may resell their shares include, but are not limited to, the following:
- a cross or block trade in which the broker or dealer engaged
by a selling security holder will attempt to sell the
securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by
such broker or dealer for its account;
- an exchange distribution in accordance with the rules of such
exchange;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
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<PAGE> 19
- privately negotiated transactions;
- short sales or borrowing, returns and reborrowings of the
shares pursuant to stock loan agreements to settle short
sales;
- delivery in connection with the issuance of securities by
issuers, other than us, that are exchangeable for (whether on
an optional or mandatory basis), or payable in, such shares
(whether such securities are listed on a national securities
exchange or otherwise) or pursuant to which such shares may be
distributed; and
- a combination of any such methods of sale or distribution.
In effecting sales, brokers or dealers engaged by a selling security
holder may arrange for other brokers or dealers to participate in such sales.
Brokers or dealers may receive commissions or discounts from a selling security
holder or from the purchasers in amounts to be negotiated immediately prior to
the sale. A selling security holder may also sell the shares in accordance with
Rule 144 or Rule 144A under the Securities Act or pursuant to other exemptions
from registration under the Securities Act.
If the securities offered by this prospectus are sold in an
underwritten offering, the underwriters may acquire them for their own account
and may further resell these securities from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The names of the
underwriters with respect to any such offering and the terms of the
transactions, including any underwriting discounts, concessions or commissions
and other items constituting compensation of the underwriters and
broker-dealers, if any, will be set forth in a prospectus supplement relating to
such offering. Any public offering price and any discounts, concessions or
commissions allowed or reallowed or paid to broker-dealers may be changed from
time to time. Unless otherwise set forth in a prospectus supplement, the
obligations of the underwriters to purchase the securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the securities specified in such prospectus supplement if any such shares
are purchased. Brokers who borrow the securities to settle short sales of
securities and who wish to offer and sell the securities under circumstances
requiring use of the prospectus or making use of the prospectus desirable may
use this prospectus.
From time to time the security holders may engage in short sales, short
sales against the box, puts, calls and other transactions in our securities, or
derivatives thereof, and may sell and deliver the shares offered by this
prospectus in connection therewith.
We will not receive any of the proceeds from the sales of the
securities by the security holders pursuant to this prospectus. We will,
however, bear certain expenses in connection with the registration of the
securities being offered by the selling security holders, including all costs
incident to the offering and sale of the securities to the public other than any
commissions and discounts of underwriters, dealers or agents and any transfer
taxes.
Our common stock is listed for trading on the Nasdaq National Market,
and the shares offered by this prospectus have been approved for quotation on
Nasdaq.
In order to comply with the securities laws of certain states, the
selling security holders may only sell the securities through registered or
licensed brokers or dealers. In addition, in certain states, the selling
security holders may only sell the securities if they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirements of such state is available and is complied with.
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<PAGE> 20
A selling security holder, and any broker dealer who acts in connection
with the sale of shares hereunder, may be deemed an underwriter within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and profit on any resale of the securities as principal might be deemed
underwriting discounts and commissions under the Securities Act. We have agreed
to indemnify the selling security holders, any underwriters and certain other
participants in an underwriting or distribution of the securities and their
directors, officers, employees and agents against certain liabilities including
liabilities arising under the Securities Act. Because the selling security
holders may be deemed underwriters within the meaning of Section 2(11) of the
Securities Act, the selling security holders will be subject to the prospectus
delivery requirements of the Securities Act.
We will use our best efforts to keep the registration statement of
which this prospectus is a part effective for a period of two years from its
initial effective date. We are permitted to suspend the use of this prospectus
in connection with the sales of securities by selling security holders upon the
happening of certain events. These include the existence of any fact that makes
any statement of material fact made in this prospectus untrue or that requires
the making of additions to or changes in this prospectus in order to make the
statements herein not misleading. The suspension will continue until such time
as we advise the selling security holders that use of the prospectus may be
resumed, in which case the period of time during which we are required to
maintain the effectiveness of the registration statement shall be extended.
World Access will bear the expense of preparing and filing the registration
statement and all post-effective amendments.
LEGAL MATTERS
Long Aldridge & Norman LLP, Atlanta, Georgia, has passed upon certain
legal matters regarding the securities offered by this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedules included in our Annual Report on Form 10-K/A
for the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedules are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
The financial statements of World Access, Inc. as of December 31, 1997
and for each of the two years in the period ended December 31, 1997 incorporated
in this prospectus by reference to the Annual Report on Form 10-K/A of World
Access, Inc. for the year ended December 31, 1998 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
dated March 5, 1998, except for the discontinued operations described in Note D,
which are as of April 9, 1999, given on the authority of that firm as experts in
auditing and accounting.
Ernst & Young LLP, independent auditors, have audited the combined
financial statements of Cherry Communications Incorporated (d/b/a Resurgens
Communications Group) and Cherry Communications U.K. Limited at December 31,
1997 and for the year then ended, included in our Current Report on Form 8-K
filed on July 27, 1998, as amended by Amendment No. 1 on Form 8-K/A filed on
September 4, 1998, and Amendment No. 2 on Form 8-K/A filed on September 25,
1998, as set forth in their report (which contains an explanatory paragraph
describing conditions that raise substantial doubt about the company's ability
to continue as a going concern as described in note 2 to the combined financial
statements) which is incorporated by reference in this prospectus and elsewhere
in the registration statement. These financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority as
experts in accounting and auditing.
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<PAGE> 21
Grant Thornton LLP, independent auditors, have audited the combined
financial statements of Cherry Communications Incorporated (d/b/a Resurgens
Communications Group) and Cherry Communications U.K. Limited at December 31,
1996 and 1995 and for the years then ended, included in our Current Report on
Form 8-K filed on July 27, 1998, as amended by Amendment No. 1 on Form 8-K/A
filed on September 4, 1998, and Amendment No. 2 on Form 8-K/A filed on September
25, 1998, as set forth in their report, which is incorporated by reference in
this prospectus and elsewhere in the registration statement. These financial
statements are incorporated by reference in reliance on Grant Thornton LLP's
report, given on their authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements of Telco Systems, Inc. at August 30, 1998 and August 31,
1997, and for each of the three years in the period ended August 30, 1998
included in our Registration Statement on Form S-4 filed on November 10, 1998,
as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. These financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Federal securities laws require us to file information with the
Securities and Exchange Commission concerning our business and operations.
Accordingly, we file annual, quarterly and special reports, proxy statements and
other information with the Commission. You can inspect and copy this information
at the public reference facility maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You can also
do so at the following regional offices of the Commission:
New York Regional Office
Seven World Trade Center
Suite 1300
New York, New York 10048
Chicago Regional Office
Northwest Atrium Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661
You can get additional information about the operation of the
Commission's public reference facilities by calling the Commission at
1-800-SEC-0330. The Commission also maintains a web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding companies that, like us, file information electronically with the
Commission. You can also inspect information about us at the offices of the
Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006.
This prospectus is part of a registration statement that we filed with
the Commission and omits certain information contained in the registration
statement as permitted by the Commission. Additional information about the
Company and our common stock is contained in the registration statement on Form
S-3 of which this Prospectus forms a part, including certain exhibits and
schedules. You can obtain a copy of the registration statement from the
Commission at the street address or Internet site listed above.
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<PAGE> 22
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the information
we file with it, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered part of this prospectus, and later information that we file with
the Commission will automatically update and supersede this information. We
incorporate by reference documents listed below and any future filings made with
the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
until the selling security holders sell all their shares offered by this
prospectus.
We have filed the following documents with the Commission:
- Our Current Report on Form 8-K filed on August 19, 1999 (event
date: August 17, 1999) (File Number 0-29782);
- Our Current Report on Form 8-K filed on July 14, 1999 (event
date: June 30, 1999) (File Number 0-29782);
- Our Current Report on Form 8-K filed on May 3, 1999 (event
date: April 21, 1999) (File Number 0-29782);
- Our Quarterly Report on Form 10-Q for the quarter ended June
30, 1999 (File Number 0-29782);
- Our Quarterly Report on Form 10-Q for the quarter ended March
31, 1999, as amended by Form 10-Q/A filed on August 31, 1999
(File Number 0-29782);
- Our Annual Report on Form 10-K for the year ended December 31,
1998, as amended by Form 10-K/A filed on August 31, 1999 (File
Number 0-29782);
- The combined financial statements of Cherry Communications
Incorporated (d/b/a/ Resurgens Communications Group) and
Cherry Communications U.K. Limited included in WA Telcom's
Current Report on Form 8-K filed on July 27, 1998 (event date:
July 20, 1998), as amended by Amendment No. 1 on Form 8-K/A
filed on September 4, 1998, and Amendment No. 2 on Form 8-K/A
filed on September 25, 1998;
- The consolidated financial statements of Telco Systems, Inc.
included in our Registration Statement on Form S-4 (No.
333-67025), as filed with the Commission on November 10, 1998.
- Our description of the common stock included in the
Registration Statement on Form S-4 (No. 333-67025), as filed
with the Commission on November 10, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
945 E. Paces Ferry Road
Suite 2200
Atlanta, Georgia 30326
Attention: Mr. Mark A. Gergel
Chief Financial Officer
Telephone: (404) 231-2025
20
<PAGE> 23
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling security holders can
not offer any of these shares in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of the respective
document.
We have not authorized anyone, including brokers and dealers, to give
any information or make any representation not contained in this prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by us or any other person.
This prospectus does not constitute an offer to sell or solicitation of
any offer to buy any of the securities offered hereby in any jurisdiction in
which it is unlawful to make such offer or solicitation.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC Registration Fee.................................. $ 1,253
Nasdaq Additional Listing Fee......................... 7,861
Accounting Fees and Expenses.......................... 75,000
Legal Fees and Expenses............................... 50,000
Printing and Mailing Expenses......................... 10,000
Miscellaneous Expenses................................ 5,886
--------
Total................................................. $150,000
========
</TABLE>
The foregoing items, except for the SEC Registration Fee and the Nasdaq
Additional Listing Fee, are estimated. We will pay all of the above expenses.
The selling security holders will pay their own expenses, including expenses of
their own counsel, broker or dealer fees, discounts and expenses, and all
transfer and other taxes on the sale of the shares of common stock offered by
this prospectus.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate or limit the personal liability of directors of a
corporation to the corporation or to any of its security holders for monetary
damages for a breach of fiduciary duty as a director, except (i) for breach of
the director's duty of loyalty, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
certain unlawful dividends and stock repurchases, or (iv) for any transaction
from which the director derived an improper personal benefit.
Section 145 of the DGCL provides that in the case of any action other
than one by or in the right of the corporation, a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
in such capacity on behalf of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
21
<PAGE> 24
Section 145 of the DGCL provides that in the case of an action by or in
the right of a corporation to procure a judgment in its favor, a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any action or suit by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation in such capacity on behalf of another corporation
or enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted under standards similar to those set forth in the
preceding paragraph, except that no indemnification may be made in respect of
any action or claim as to which such person shall have been adjudged to be
liable to the corporation unless a court determines that such person is fairly
and reasonably entitled to indemnification.
Articles X and XI of the World Access, Inc. Restated Certificate of
Incorporation provide for indemnification of directors, officers and employees
to the fullest extent permissible under the DGCL.
Officers and directors of World Access are presently covered by
insurance which (with certain exceptions and with certain limitations)
indemnifies them against any losses or liabilities arising from any alleged
"wrongful act" including any alleged breach of duty, neglect, error,
misstatement, misleading statement, omissions or other act done or wrongfully
attempted. The cost of such insurance is borne by World Access as permitted by
the DGCL.
World Access has entered into separate indemnification agreements with
its directors and non-director officers at the level of Vice President and
above. These indemnification agreements provide as follows:
- there is a rebuttable presumption that the director or officer
has met the applicable standard of conduct required for
indemnification;
- World Access will advance litigation expenses to a director or
officer at his request provided that he undertakes to repay
the amount advanced if it is ultimately determined that he is
not entitled to indemnification for such expenses;
- World Access will indemnify a director of officer for amounts
paid in settlement of a derivative suit;
- in the event of a determination by the disinterested members
of the board of directors or independent counsel that a
director or officer did not meet the standard of conduct
required for indemnification, the director or officer may
contest this determination by petitioning a court or
commencing any arbitration proceeding conducted by a single
arbitrator pursuant to the rules of the American Arbitration
Association to make an independent determination of whether
such director or officer is entitled to indemnification under
his indemnification agreement; and
- World Access will reimburse a director or officer for expenses
incurred enforcing his rights under his indemnification
agreement.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS. The following exhibits are filed as part of this
registration statement.
22
<PAGE> 25
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
5.1* Opinion of Long Aldridge & Norman LLP.
23.1* Consent of Long Aldridge & Norman LLP (included in Exhibit
5.1).
23.2 Consent of Ernst & Young LLP with respect to the financial
statements of World Access, Inc.
23.3 Consent of PricewaterhouseCoopers LLP with respect to the
financial statements of World Access, Inc.
23.4 Consent of Ernst & Young LLP with respect to the financial
statements of Cherry Communications Incorporated (d/b/a
Resurgens Communications Group) and Cherry Communications U.K.
Limited.
23.5 Consent of Grant Thornton LLP with respect to the financial
statements of Cherry Communications Incorporated (d/b/a
Resurgens Communications Group) and Cherry Communications U.K.
Limited.
23.6 Consent of Ernst & Young LLP with respect to the financial
statements of Telco Systems, Inc.
24.1* Power of Attorney of World Access.
</TABLE>
- ---------------
* Previously filed.
(B) FINANCIAL STATEMENT SCHEDULE. The financial statement schedule that is
required by Regulation S-X is incorporated herein by reference to our
Annual Report on Form 10-K for the year ended December 31, 1998.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
23
<PAGE> 26
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in the post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrants pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrants will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
24
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Atlanta, state of Georgia, on August 31, 1999.
WORLD ACCESS, INC.
(formerly known as "WAXS INC.")
By: /s/ John D. Phillips
---------------------------------------
John D. Phillips
Chairman, President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act, this Amendment has
been signed by the following persons in the capacities indicated as of August
31, 1999.
SIGNATURES TITLE
/s/ John D. Phillips Chairman, President and Chief Executive
- ------------------------- Officer (Principal Executive Officer)
John D. Phillips
/s/ Mark A. Gergel Director, Executive Vice President
- ------------------------- and Chief Financial Officer (Principal
Mark A. Gergel Financial Officer)
/s/ Martin D. Kidder Vice President and Corporate
- ------------------------- Controller (Principal Accounting
Martin D. Kidder Officer)
/s/* Director
- -------------------------
Stephen J. Clearman
/s/* Director
- -------------------------
John P. Imlay, Jr.
/s/* Director
- -------------------------
Carl E. Sanders
Director
- -------------------------
Lawrence C. Tucker
*By: /s/ Mark A. Gergel
-------------------------
Mark A. Gergel,
Attorney-in-fact
25
<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
-------------- ----------------------
<S> <C>
5.1* Opinion of Long Aldridge & Norman LLP.
23.1* Consent of Long Aldridge & Norman LLP (included in
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP with respect to the
financial statements of World Access, Inc.
23.3 Consent of PricewaterhouseCoopers LLP with respect to
the financial statements of World Access, Inc.
23.4 Consent of Ernst & Young LLP with respect to the
financial statements of Cherry Communications
Incorporated (d/b/a Resurgens Communications Group) and
Cherry Communications U.K. Limited.
23.5 Consent of Grant Thornton LLP with respect to the
financial statements of Cherry Communications
Incorporated (d/b/a Resurgens Communications Group) and
Cherry Communications U.K. Limited.
23.6 Consent of Ernst & Young LLP with respect to the
financial statements of Telco Systems, Inc.
24.1* Power of Attorney of World Access.
</TABLE>
- ---------------
* Previously filed.
26
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement on Form S-3 and related Prospectus of World
Access, Inc. and subsidiaries for the registration of 393,060 shares of its
common stock and to the incorporation by reference therein of our report dated
March 26, 1999, with respect to the consolidated financial statements and
schedules of World Access, Inc. and subsidiaries included in its Annual Report
(Form 10-K/A) for the year ended December 31, 1998, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Atlanta, Georgia
August 30, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 5, 1998, except for the
discontinued operations reclassifications in the Consolidated Statements of
Operations and Note D, which are as of April 9, 1999, relating to the financial
statements and financial statement schedules of World Access, Inc. for each of
the two years in the period ended December 31, 1997, which appears in World
Access, Inc.'s Annual Report on Form 10-K, as amended, for the year ended
December 31, 1998. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
August 30, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement on Form S-3 and related Prospectus of World
Access, Inc. and subsidiaries for the registration of 393,060 shares of its
common stock and to the incorporation by reference therein of our report dated
June 5, 1998, with respect to the combined financial statements of Cherry
Communications Incorporated (d/b/a Resurgens Communications Group) and Cherry
Communications U.K. Limited for the year ended December 31, 1997 included in the
WA Telecom Current Report on Form 8-K dated July 27, 1998, as amended by
Amendment No. 1 on Form 8-K/A dated September 4, 1998 and Amendment No. 2 on
Form 8-K/A dated September 25, 1998.
/s/ Ernst & Young LLP
Atlanta, Georgia
August 30, 1999
<PAGE> 1
Exhibit 23.5
CONSENT OF INDEPENDENT AUDITORS
We have issued our report dated July 11, 1997, except for Notes 2 and 10 as to
which the date is July 24, 1997, accompanying the combined financial statements
of Cherry Communications Incorporated and Cherry Communications U.K. Limited for
each of the two years in the period ended December 31, 1996 included in the WA
Telecom Current Report on Form 8-K dated July 17, 1998, as amended by Amendment
No. 1 on Form 8-K/A dated September 4, 1998, as amended by Amendment No. 2 on
Form 8-K/A dated September 25, 1998. We consent to the incorporation by
reference of the aforementioned report in Amendment No. 1 to the Registration
Statement on Form S-3 and related Prospectus of World Access, Inc. and
subsidiaries and to the use of our name as it appears under the caption
"Experts."
/s/ GRANT THORNTON LLP
Chicago, Illinois
August 30, 1999
<PAGE> 1
Exhibit 23.6
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement on Form S-3 and related Prospectus of World
Access, Inc. and subsidiaries for the registration of 393,060 shares of its
common stock and to the incorporation by reference therein of our report dated
November 4, 1998, with respect to the consolidated financial statements and
schedule of Telco Systems, Inc. for the year ended August 30, 1998 included in
World Access, Inc.'s Registration Statement on Form S-4 dated November 10, 1998.
/s/ Ernst & Young LLP
Boston, Massachusetts
August 30, 1999
