<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
FOR THE PERIOD ENDED MARCH 31, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
Commission File No. 0-19923
STM WIRELESS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 95-3758983
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification number)
One Mauchly
Irvine, California 92618
(Address of principal executive offices) (Zip code)
(949) 753-7864
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the last 90 days.
Yes No
X
- --- ---
As of May 11, 1998, there were 7,030,593 shares of Common Stock, $0.001 par
value per share, outstanding.
Page 1 of 13
<PAGE> 2
STM WIRELESS, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
<S> <C>
Condensed Consolidated Balance Sheets at March 31, 1998 and
December 31, 1997 3
Condensed Consolidated Statements of Operations for the three
month periods ended March 31, 1998 and March 31, 1997 4
Condensed Consolidated Statements of Cash Flows for the three
month periods ended March 31, 1998 and March 31, 1997 5
Notes to Condensed Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 9-11
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on 8-K 12
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
STM WIRELESS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- --------
Current assets: (unaudited)
<S> <C> <C>
Cash and cash equivalents $ 9,696 $ 4,095
Short-term investments 2,227 4,527
Accounts receivable, net 12,554 10,937
Inventories, net 16,926 11,211
Current portion of long-term receivables 592 592
Deferred income taxes 3,132 3,132
-------- --------
Total current assets 45,127 34,494
Property & equipment, net 18,170 17,025
Long-term receivables 1,382 1,462
Other assets 2,730 1,436
======== ========
$ 67,409 $ 54,417
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 11,600 7,900
Current portion of long-term debt 323 328
Accounts payable 15,163 11,597
Accrued liabilities 2,081 2,139
Customer deposits 463 130
Income taxes payable 425 425
-------- --------
Total current liabilities 30,055 22,519
Long-term debt 4,513 4,577
Redeemable Minority Interest 6,051 259
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000
shares authorized, none issued or outstanding -- --
Common stock, $0.001 par value; 20,000,000 shares
authorized; issued and outstanding 7,027,593
shares at March 31, 1998 and 6,448,164 shares
at December 31, 1997 7 6
Additional paid in capital 38,054 34,039
Accumulated deficit (11,054) (6,983)
Accumulated other comprehensive income (loss) (217) --
-------- --------
Total Stockholders' equity 26,790 27,062
======== ========
$ 67,409 $ 54,417
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE> 4
STM WIRELESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months
ended March 31,
---------------------
1998 1997
------- -------
<S> <C> <C>
Revenues
Products $ 6,320 $ 7,611
Services 629 617
------- -------
Total revenues 6,949 8,228
Cost of revenues
Products 5,271 5,028
Services 719 337
------- -------
Total cost of revenues 5,990 5,365
Gross profit 959 2,863
Operating costs:
Selling, general & administrative expenses 2,868 1,441
Research & development costs 2,056 1,300
------- -------
Total operating costs 4,924 2,741
Operating income (loss) (3,965) 122
Other income (expense) (54) 17
Interest income 139 150
Interest expense (304) (141)
------- -------
Income from continuing operations, before
minority interest and income taxes (4,184) 148
Income tax expense -- (23)
------- -------
Income (loss) from operations before minority interest (4,184) 125
Minority interest in net loss of consolidated
subsidiaries 113 27
------- -------
Net income (loss) $(4,071) $ 152
======= =======
Net income per share - (1997 restated):
Basic $ (0.62) $ 0.02
----- ======= =======
Diluted $ (0.62) $ 0.02
------- ======= =======
Common shares used in computing per share amounts -
(1997 restated)
Basic 6,619 6,339
-----
Diluted 6,619 6,420
-------
</TABLE>
See accompanying notes to condensed consolidated financial statements
4
<PAGE> 5
STM WIRELESS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
For the three months
ended March 31,
----------------------
1998 1997
-------- --------
<S> <C> <C>
Net cash used in continuing operations $ (8,787) $ (5,598)
Cash flows from investing activities:
Net decrease in short-term investments 2,300 207
Acquisition of property and equipment (1,567) (246)
-------- --------
Net cash provided by (used in) investing activities 733 (39)
-------- --------
Cash flows from financing activities:
Net decrease in long-term receivables 80 129
Proceeds from issuance of common stock 4,039 228
Proceeds from issuance of redeemable preferred
stock in subsidiary 5,905 --
Net increase (decrease) in short-term borrowings 3,700 (1,300)
Repayment of long-term debt (69) (40)
-------- --------
Net cash provided by (used in) financing activities 13,655 (983)
-------- --------
Net increase (decrease) in cash and cash equivalents 5,601 (6,620)
Cash and cash equivalents at beginning of period 4,095 10,453
-------- --------
Cash and cash equivalents at end of period $ 9,696 $ 3,833
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE> 6
STM WIRELESS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 1998 and 1997
(Unaudited)
1. BASIS OF PRESENTATION
These financial statements are unaudited; however, the information contained
herein for STM Wireless, Inc. (the "Company" or "STM") gives effect to all
adjustments (which are normal recurring accruals) necessary, in the opinion
of Company management, to present fairly the financial statements for the
interim periods presented. Results for the period ended March 31, 1997 have
been restated to include the results of Telecom International, Inc. (TI),
which was acquired in December 1997.
The results of operations for the current interim period are not necessarily
indicative of the results to be expected for the current year.
Although the Company believes that the disclosures in these financial
statements are adequate to make the information presented not misleading,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC"), and these
financial statements should be read in conjunction with the financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, which is on file with the SEC.
2. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------- -------
<S> <C> <C>
Raw materials $ 9,183 $ 5,727
Work in process 1,243 980
Finished goods 6,500 4,504
------- -------
$16,926 $11,211
======= =======
</TABLE>
3. NET INCOME (LOSS) PER SHARE
Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings per
Share". This statement replaces the previously reported primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike
primary earnings per
6
<PAGE> 7
share, basic earnings per share excludes any dilutive effects of options.
Diluted earnings per share is very similar to the previously reported fully
diluted earnings per share. Net income per share for the three months ended
March 31, 1997 has been restated in accordance with SFAS 128. The following
table summarizes the computation of net income (loss) per share (in
thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1998 1997
---- ----
<S> <C> <C>
Net income (loss) $(4,071) $ 152
Basic:
Weighted average common shares outstanding
used in computing basic net income
(loss) per share 6,619 6,339
======= =======
Basic net income (loss) per share $ (0.62) $ 0.02
======= =======
Diluted:
Weighted average common shares outstanding 6,619 6,339
Dilutive options outstanding -- 81
------- -------
Shares used in computing diluted net income
(loss) per share 6,619 6,420
======= =======
Diluted net income (loss) per share $ (0.62) $ 0.02
======= =======
</TABLE>
4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130 ("SFAS No. 130")
"Reporting Comprehensive Income," which establishes standards for reporting
and disclosures of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general purpose financial
statements. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997 and requires reclassification of financial statements for
earlier periods to be provided for comparative purposes. The Company has not
determined the manner in which it will present the information required by
SFAS No. 130 in its annual consolidated financial statements for the year
ending December 31, 1998. The Company's total comprehensive income (loss)
for all periods presented herein would not have differed materially from
those amounts reported as net income (loss) in the consolidated statements
of operations.
Also in June 1997, the FASB issued SFAS No. 131, "Disclosure About Segments
of an Enterprise and Related Information." The Statement establishes
standards for the manner in which public business enterprises report
information about operating segments in annual financial statements and
requires those enterprises to report selected information about operating
segments in interim financial reports issued to shareholders. This Statement
is effective for annual financial statements for periods beginning after
7
<PAGE> 8
December 15, 1997, and for interim periods after the first year of adoption.
The Company has not yet determined the impact of adopting these disclosure
requirements.
5. ISSUANCE OF SHARES
In March 1998, the Company completed a $10 million equity offering of common
stock of STM and mandatory redeemable preferred stock of its Direc-To-Phone
International (DTPI) subsidiary. Concurrently with and as a condition of
this transaction, the Company also invested $5 million of equity in DTPI,
extended a $10 million loan and entered into a Product Supply Agreement with
DTPI. The principal on the loan is repayable by DTPI out of the proceeds of
any future financings of DTPI that may occur.
The proceeds from the issuance of the mandatory redeemable preferred stock
in DTPI have been classified as Redeemable Minority interest in the
accompanying Condensed Consolidated Balance Sheet at March 31, 1998. The
redeemable shares in DTPI are redeemable at the option of the holder (if not
sooner converted into common stock of DTPI), on the 5th anniversary of the
date of issuance or in the event of an acquisition of STM and STM continues
to hold greater than 50% of the voting stock of DTPI. The redemption amount
is equal to $6,000,000 plus dividends of $0.50 per share per annum accruing
from the date of issuance.
6. SUBSEQUENT EVENT
On May 11, 1998, the Company announced that its majority-owned subsidiary,
Telecom Multimedia Systems, Inc. (TMSI) had entered into a definitive asset
sale agreement with Inter-Tel, Inc. (Inter-Tel), pursuant to which Inter-Tel
has agreed to purchase certain assets and assume certain liabilities of TMSI
for approximately $25 million in cash. The transaction is anticipated to
close by June 30, 1998 and is subject to customary conditions to closing
including regulatory and other approvals.
8
<PAGE> 9
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
General
- -------
STM Wireless, Inc. (the "Company" or "STM"), founded in 1982, is a
developer, manufacturer and provider of wireless-based satellite communications
infrastructure and user terminal products utilized in public and private
telecommunications networks. These networks support data, fax, voice and video
communication and are used to either bypass or extend terrestrial networks or
provide a communications infrastructure where a network does not currently
exist. The Company's product line is based on proprietary hardware and software
and primarily consists of two-way earth stations sometimes referred to as VSATs
(very small aperture terminals), associated infrastructure equipment and
software, transceivers, modems and other networking equipment. The Company
currently focuses its sales efforts on the international marketplace,
particularly developing countries. The Company's subsidiary, Direc-To-Phone
International, Inc. ("DTPI"), provides fixed telephony services in areas of
lower population density in international markets. The Company's subsidiary
Telecom International, Inc. (TI), is a systems integrator within the satellite
communications industry.
Results of Operations
- ---------------------
Combined product and service revenues were $6,949,000 for the
three-month period ended March 31, 1998, compared to $8,228,000 for the
corresponding period of 1997, a decrease of 16%. Product revenues were
$6,320,000 for the three-month period ended March 31, 1998, compared to
$7,611,000 for the corresponding period in 1997, a decrease of 17%. Management
believes that the decline in product revenues relates primarily to the diversion
of management effort to the setting up of the DTPI service business. Recognizing
this, the Company announced a new management structure and company organization
in January 1998. It is believed that this new management structure should lead
to improved levels of revenues, however, there can be no assurance that such
efforts will generate any revenue, or a specific level of revenue. Service
revenues were $629,000 for the three-month period ended March 31, 1998, compared
to $617,000 for the corresponding period in 1997, an increase of 2%.
Combined product and service gross profit margin in the three-month
period ended March 31, 1998 was 14% compared to 35% for the comparable period in
1997. Product gross profit margin in the three-month period ended March 31, 1998
was 17% compared to 34% for the comparable period in 1997. This decrease in
product gross profit margin was primarily due to a higher systems integration
sales content in 1998 compared to 1997, at a relatively lower gross profit
percentage compared to core manufacturing product sales, and a higher level of
relatively fixed costs in 1998 compared to 1997. Service gross profit margin in
the three-month period ended March 31, 1998 was negative 14%, compared to 45%
for the comparable period in 1997. The negative service gross margin was due
primarily to the Company investing in support and installation capabilities
associated with the DTPI service business.
Selling, general and administrative expenses (SG&A) for the three-month
period ended March 31, 1998 increased by $1,427,000 to $2,868,000, or 41% of
revenues, from
9
<PAGE> 10
$1,441,000, or 18% of revenues, in the corresponding period of 1997. The
increase in SG&A was primarily attributable to increased costs associated with
the investment in the infrastructure for the DTPI service business and the
Company's recently acquired systems integration business. In addition, SG&A
for 1997 was reduced by $400,000 due to the reversal of a reserve, no longer
required, for a potential customer concession.
Research and development (R&D) expenses for the three-month period ended
March 31, 1998 increased to $2,056,000, or 30% of total revenues, from
$1,300,000, or 16% of total revenues, in the corresponding period of 1997. The
Company, including the Company's majority owned TMSI subsidiary, experienced a
general increase in R&D activity during the current year period. R&D costs,
including outside services, in-house salaries, equipment and supply costs, and
third party license fees, are subject to wide fluctuations, depending upon the
nature and stage of completion of the various projects.
Interest income decreased by $11,000 to $139,000 for the three-month
period ended March 31, 1998, over the three-month period ended March 31, 1997.
The decrease in interest income was primarily the result of declining long-term
receivable balances partially offset by higher average cash and short-term
investment balances.
Interest expense increased by $163,000 to $304,000 for the three-month
period ended March 31, 1998, over the three-month period ended March 31, 1997.
The increase was primarily due to a higher average level of short-term
borrowings.
Liquidity and Capital Resources
- -------------------------------
In connection with the award of certain long-term service contracts in
Mexico and Venezuela, and due to the capital intensive nature of these
contracts, and other contracts that DTPI may be awarded in the future, the
Company is reviewing financing alternatives to enable it to pursue these
business opportunities in the most beneficial manner. However, there can be no
assurance that such financing will be available, or that such financing will be
available on terms acceptable to the Company.
In March 1998, the Company completed a $10 million equity offering of
common stock of STM and redeemable preferred stock of its Direc-To-Phone
International (DTPI) subsidiary. Concurrently with and as a condition of this
transaction, the Company also invested $5 million of equity in DTPI, extended
a $10 million loan and entered into a Product Supply Agreement with DTPI. The
principal on the loan is repayable by DTPI out of the proceeds of any future
financings of DTPI that may occur.
The proceeds from the issuance of the mandatory redeemable preferred
stock in DTPI have been classified as Redeemable Minority interest in the
accompanying Condensed Consolidated Balance Sheet at March 31, 1998. The
redeemable shares in DTPI are redeemable at the option of the holder (if not
sooner converted into common stock of DTPI), on the 5th anniversary of the date
of issuance or in the event of an acquisition of STM and STM continues to hold
greater than 50% of the voting stock of DTPI. The redemption amount is equal to
$6,000,000 plus dividends of $0.50 per share per annum accruing from the date of
issuance.
On May 11, 1998, the Company announced that its majority-owned
subsidiary, Telecom Multimedia Systems, Inc. (TMSI) had entered into a
definitive asset sale agreement with Inter-Tel, Inc. (Inter-Tel), pursuant to
which Inter-Tel has agreed to purchase certain assets and assume certain
liabilities of TMSI for approximately $25 million in cash. The transaction is
anticipated to close by June 30, 1998 and is subject to customary conditions to
closing including regulatory and other approvals.
For the first three months of 1998, the Company had negative cash flows
from operating activities of $8,787,000, compared to negative cash flows of
$5,598,000 in the same period of 1997. The increase in negative cash flow was
primarily due to the net loss, increased investments in inventory to support the
Company's anticipated sales backlog and for the Company's DTPI service business,
and an increase in prepaid expenses and deposits, partially offset by an
increase in accounts payable.
10
<PAGE> 11
Cash provided by investing activities in the first three months of 1998
totaled $733,000. Sales and maturities of short-term investments exceeded
purchases of such investments by $2,300,000. The acquisition of fixed assets,
primarily related to DTPI, used $1,567,000.
Cash provided by financing activities during the first three months
totaled $13,655,000. A net increase of short-term borrowings provided
$3,700,000, and a reduction of long-term debt used $69,000. Proceeds from
issuance of common stock related to the exercise of stock options provided
$39,000. Proceeds from the equity offering mentioned above provided a total of
$9,905,000; $4,000,000 from the issuance of common stock in the Company, and
$5,905,000 from the issuance of preferred stock in a subsidiary. A reduction of
long-term receivables provided $80,000.
Overall, the Company's cash, cash equivalents, and short-term
investments totaled $11,923,000 at March 31, 1998, as compared to $8,622,000 at
December 31, 1997. The Company has secured revolving lines of credit with two
banks. The availability under these lines of credit was approximately
$11,600,000 at March 31, 1998, all of which had been drawn down.
Management expects to have sufficient cash generated through
operations, through availability under existing credit lines and through other
sources to meet the anticipated cash requirements for the next 12 months.
RISK FACTORS AND FORWARD LOOKING STATEMENTS
- -------------------------------------------
THIS DOCUMENT CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT INVOLVE RISKS AND
UNCERTAINTIES. IN ADDITION, THE COMPANY MAY FROM TIME TO TIME MAKE FORWARD
LOOKING STATEMENTS, ORALLY OR IN WRITING. THE WORDS "ESTIMATE", "PROJECT",
"POTENTIAL", "INTENDED", "EXPECT", "BELIEVE" AND SIMILAR EXPRESSIONS OR WORDS
ARE INTENDED TO IDENTIFY FORWARD LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE PROJECTED OR SUGGESTED IN ANY FORWARD LOOKING STATEMENTS
AS A RESULT OF A WIDE VARIETY OF FACTORS AND CONDITIONS, AMONG OTHERS, LONG TERM
CYCLES INVOLVED IN COMPLETING MAJOR CONTRACTS, PARTICULARLY IN FOREIGN MARKETS,
INCREASING COMPETITIVE PRESSURES, GENERAL ECONOMIC CONDITIONS, TECHNOLOGICAL
ADVANCES, THE TIMING OF NEW PRODUCT INTRODUCTIONS, POLITICAL AND ECONOMIC RISKS
INVOLVED IN FOREIGN MARKETS AND FOREIGN CURRENCIES AND THE TIMING OF OPERATING
AND OTHER EXPENDITURES. REFERENCE IS HEREBY MADE TO "RISK FACTORS" IN THE
COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997.
BECAUSE OF THESE AND OTHER FACTORS THAT MAY AFFECT THE COMPANY'S
OPERATING RESULTS, PAST FINANCIAL PERFORMANCE SHOULD NOT BE CONSIDERED AN
INDICATOR OF FUTURE PERFORMANCE, AND INVESTORS SHOULD NOT USE HISTORICAL TRENDS
TO ANTICIPATE RESULTS OR TRENDS IN FUTURE PERIODS.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 2 - Changes in Securities and Use of Proceeds
In March 1998, the Company completed a $10 million equity offering of
common stock of STM and mandatory redeemable preferred stock of its subsidiary,
Direc-To-Phone International, Inc. ("DTPI"), to Pequot Private Equity Fund L.P.
("Pequot"), the private investment vehicle of Dawson-Samberg Capital
Management, Inc. Through the transaction, Pequot acquired 571,429 shares in the
Company and an interest in DTPI. The transaction was exempt from the
registration requirements of Section 5 of the Securities Act of 1933 (the
"Act") pursuant to Section 4(2) of the Act and Rule 506 promulgated under the
Act.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits -
10.24* Stock Purchase Agreement, dated March 5, 1998, by and
among the Company, Direct-To-Phone International, Inc.,
Pequot Private Equity Fund, L.P. and Pequot Offshore
Private Equity Fund, Inc.
10.25* Series B Preferred Stock Purchase Agreement, dated
March 5, 1998, by and among the Company and
Direct-To-Phone International, Inc.
10.26* Stock Purchase Agreement, dated March 5, 1998, by and
among the Company, Pequot Private Equity Fund, L.P. and
Pequot Offshore Private Equity Fund, Inc.
10.27* Stockholders Agreement, dated March 5, 1998, by and
among Direct-To-Phone International, Inc. and its
stockholders.
10.28* Registration Rights Agreement, dated March 5, 1998, by
and among Direct-To-Phone International, Inc. and its
stockholders.
- ----------------
*Previously filed with the Company's 10-Q/A filed on May 19, 1998.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on January 27, 1998, which report
referenced the press releases issued to the public by the Company on December
23, 1997.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STM Wireless, Inc.
Date: May 19, 1998 By: JOSEPH WALLACE
--------------
Joseph Wallace
Vice President, Finance and
Chief Financial Officer
(Principal Financial and Accounting Officer
and Duly Authorized Officer)
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.24* Stock Purchase Agreement, dated March 5, 1998, by and among the Company,
Direct-To-Phone International, Inc., Pequot Private Equity Fund, L.P. and Pequot
Offshore Private Equity Fund, Inc.
10.25* Series B Preferred Stock Purchase Agreement, dated March 5, 1998, by and among the Company
and Direct-To-Phone International, Inc.
10.26* Stock Purchase Agreement, dated March 5, 1998, by and among the Company, Pequot Private
Equity Fund, L.P. and Pequot Offshore Private Equity Fund, Inc.
10.27* Stockholders Agreement, dated March 5, 1998, by and among Direct-To-Phone International,
Inc. and its stockholders.
10.28* Registration Rights Agreement, dated March 5, 1998, by and among Direct-To-Phone
International, Inc. and its stockholders.
</TABLE>
- ---------------
*Previously filed with the Company's 10-Q/A filed on May 19, 1998
