<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ending June 30, 1998
Commission File Number 33-26019-LA
Long Distance Direct Holdings, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 33-0323376
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
1 Blue Hill Plaza, Pearl River, NY 10965
-----------------------------------------
Issuer's telephone number: 914-620-0765
________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's common equity, as of
June 30, 1998 is 9,629,000.
Transitional small business disclosure Format (check one):
Yes No X
--- ---
<PAGE> 2
LONG DISTANCE DIRECT HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
30-June
1998 December 31,
ASSETS (unaudited) 1997
- ------ ----------- ----
<S> <C> <C>
CURRENT ASSETS
Cash 5,824 50,447
Accounts receivable (net of allowance for
doubtful accounts of $2,346,250 and $1,205,230 respectively) 4,705,148 1,725,556
Other current assets 215,248 220,050
------------------------------------------------
Total Current Assets 4,926,220 1,996,053
------------------------------------------------
PROPERTY AND EQUIPMENT
Furniture and equipment 210,736 208,819
Computer equipment and software 557,169 516,579
Leasehold improvements 127,335 127,335
------------------------------------------------
895,240 852,733
Less: accumulated depreciation 400,771 312,495
------------------------------------------------
494,469 540,238
------------------------------------------------
Other Assets 168,100 100,213
Officers' Loans 555,449 563,598
Prepaid marketing costs 287,931 262,744
------------------------------------------------
6,432,169 3,462,846
================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - current 429,979 -
Notes payable - related party 519,299 309,929
Accounts payable 3,486,479 4,138,448
Accrued expenses 534,344 273,356
Taxes payable 1,444,195 418,944
------------------------------------------------
Total Current Liabilities 6,414,296 5,140,677
------------------------------------------------
LONG TERM LIABILITIES 3,038,220 --
STOCKHOLDERS' EQUITY
Common stock - par value $.001 per share;
authorized 30,000,000 shares; issued
and outstanding 9,629,000 shares 9,629 8,967
Additional paid in capital 11,260,641 10,924,848
Accumulated deficit (14,290,617) (12,611,646)
------------------------------------------------
Total Stockholders' Equity (3,020,347) (1,677,831)
------------------------------------------------
6,432,169 3,462,846
================================================
</TABLE>
See notes to Consolidated Financial Statements
<PAGE> 3
LONG DISTANCE DIRECT HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS YEAR TO DATE THREE MONTHS YEAR TO DATE
ENDED 6/30/98 6/30/98 ENDED 6/30/97 6/30/97
------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C>
REVENUES $5,111,634 9,566,369 $2,632,111 $4.729,313
CUSTOMER REBATES AND REFUNDS 51,229 71,158 2,759 3,963
------------ ------------- ----------- -----------
NET REVENUES 5,060,405 9,495,211 2,629,352 4,725,350
COST OF SERVICES 3,862,002 7,476,109 2,204,216 3,746,938
------------ ----------- ----------- -----------
Gross Profit 1,198,403 2,019,102 425,136 978,412
------------ ----------- ---------- -----------
OPERATING EXPENSES
Sales and marketing 88,041 180,277 176,303 248,122
General and administrative 1,766,673 3,487,725 1,229,971 2,156,774
----------- ----------- ---------- ----------
Total Operating Expenses 1,854,714 3,668,002 1,406,274 2,404,896
----------- ----------- ---------- ----------
LOSS FROM OPERATIONS (656,311) (1,648,900) (981,138) (1,426,484)
OTHER EXPENSES (INCOME)
Interest expense 18,730 24,033 -- 1,164
Interest income -- -- -- --
State income tax 64 6,038 -- 0
----------- ----------- --------- ----------
Total Other Expenses (Income) 18,794 30,071 1,164
----------- ----------- --------- ----------
NET LOSS $ (675,105) $(1,678,971) $ (981,138) $(1,427,648)
=========== =========== ============ =============
NET LOSS PER SHARE (0.07) (0.18) (0.11) (0.18)
</TABLE>
<PAGE> 4
LONG DISTANCE DIRECT HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
30-Jun-98 30-Jun-97
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,678,971) $(1,427,648)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 95,456 64,583
Amortization of note discount
Imputed interest on personal guarantee
Financing expenses
Provision for doubtful accounts 1,143,165 336,029
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (4,120,612) (3,180,069)
(Increase) decrease in other current assets 4,802 (8,097)
(Increase) decrease in other assets (84,925) 1,912
Increase (decrease) in accounts payable (651,969) 2,071,712
Increase (decrease) in accrued expenses 251,663 (177,398)
Increase (decrease) in sales and excise taxes payable 1,025,251 (7,994)
Increase (decrease) in long term liabilities 3,038,220 --
------------ ------------
Total Adjustments to Net Loss 701,051 (899,322)
------------ ------------
Net Cash Used in Operating Activities (977,920) (2,326,970)
------------ ------------
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment (42,507) (227,229)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (payment) of notes payable 429,979 --
Proceeds (payment) of related party loans 209,370 39,319
Proceeds from private placement (net of expenses) 336,455 2,463,199
------------ ------------
Net Cash Provided by Financing Activities 975,804 2,502,518
------------ ------------
NET INCREASE (DECREASE) IN CASH (44,623) (51,681)
------------ ------------
CASH - Beginning of Period 50,447 962,471
CASH - End of Period $ 5,824 $ 910,790
</TABLE>
<PAGE> 5
LONG DISTANCE DIRECT HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Company's position as of
June 30, 1998 and December 31, 1997 and results of its operations and cash
flows for the six month periods ending June 30, 1998 and June 30, 1997.
The accounting policies followed by the Company are set forth in Note 2 to the
Company's financial statements in the Form 10KSB for the period ending
December 31, 1997.
<PAGE> 6
1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Financial Statements and the notes thereto appearing herein. This
report contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in this discussion and analysis and elsewhere in this
report. Factors that could cause actual results to differ are: the Company's
ability to obtain sufficient funds to finance near term and long term working
capital needs; the Company's ability to satisfy its past due obligation to MCI;
the Company's ability to satisfy its past due obligation to AT&T; the Company's
ability to collect its outstanding receivables; competition in the long distance
telecommunications industry; ability of the Company's marketing strategies to
develop sufficient levels of revenue to sustain growth; customer attrition;
federal and state regulation of the telecommunications industry; the Company's
ability to manage its information systems for rapid growth; and retention of key
personnel.
In the third quarter of 1998, Long Distance Direct Holdings, Inc.(LDDH)
became a shareholder in a new business, incorporated as PowerChannel, Inc..
PowerChannel has been formed to provide a unique worldwide program of free or
near-free Internet access utilizing the television. The risk factors associated
with this venture are as follows: PowerChannel's ability to obtain sufficient
funds to finance near term and long term working capital needs; competition in
the Internet and TV-based personal computer services industry; ability of
PowerChannel's marketing strategy to develop sufficient levels of revenue to
sustain growth; customer attrition; federal and state regulation of the Internet
industry; retention of key personnel.
GENERAL
In the third quarter of 1998, Long Distance Direct Holdings,
Inc.(LDDH) became a shareholder in a new business, incorporated as
PowerChannel, Inc.. PowerChannel has been formed to provide a unique worldwide
program of Internet access utilizing the television. The technology will employ
a set-top box, infrared remote control keyboard, and a regular remote control.
PowerChannel has signed an agreement with American Interactive Media, Inc.
("AIM") to purchase set-top Internet access devices, supported by AIM's
proprietary webPassport (TM) Internet access service, which provides
subscribers with full access to the Internet through their existing television
sets without the need for a computer. It is intended that the underlying
Internet access will be supplied to PowerChannel by LDDH on arm's length terms
through its previously announced agreement with IDT Corporation, a major
national Internet backbone supplier, under which LDDH has become an ISP
(Internet Service Provider.) PowerChannel's unique combination of set-top box
and proprietary services will allow households free or near-free use of the
Internet without the need of a personal computer. PowerChannel will also offer
a video phone option, with flat rate telephony services. PowerChannel intends
to commence installation of the devices in the fourth quarter of 1998, with a
full rollout scheduled for the second quarter of 1999. In addition to supplying
PowerChannel with its Internet access, LDDH will supply the telephony service
for the video phone option and will market its long-distance telephone service
to those of PowerChannel's subscribers who do not take the video phone option.
The Company plans to continue to offer long distance service through
its existing company - Long Distance Direct, Inc. ("LDDI") - a subsidiary of
Long Distance Direct Holdings, Inc. ("LDDH").
<PAGE> 7
2
Long Distance Direct, Inc. (LDDI), a subsidiary of Long Distance Direct
Holdings, Inc., (LDDH) is a specialty marketer of telephone, teleconferencing,
cellular long distance, voice mail, Internet and prepaid phone cards to small
and medium sized commercial as well as residential customers. The Company has
pursued non-traditional marketing channels such as infomercials and strategic
partnering with large well-established firms and organizations to compete in the
telecommunications industry and differentiate itself among competitors. All of
the services sold by the Company through June 30, 1998 were provided by MCI
Telecommunications Corporation("MCI") and AT&T Corporation ("AT&T").
In 1997 and 1998, LDDI did not meet its minimum purchase requirements
under its contract with MCI. The Company believes that it was prevented from
meeting its minimum purchase obligation in 1997 in part because up to 20,000 new
customers acquired by the Company since January 1, 1997 and processed through
MCI were confirmed to LDDI's service but, due to software problems at MCI, were
not, in practice, activated onto the Company's network.
In June of 1998, MCI and LDDI reached an agreement under which the
Company forwent the benefit of its unbilled revenue from the new customers MCI
failed to activate onto the Company's network (approximately $1,300,000 of
unbilled revenue was recorded in the first six months of 1997) in return for,
(i) the waiver by MCI of the entire amount of the Company's liability for
underutilization charges of approximately $736,000 and $929,000 as of December
31, 1997 and May 31, 1998, respectively, under its existing minimum purchase
obligations, (ii) a material reduction in the Company's minimum purchase
obligations for the first nine months of the new agreement, (iii) certain
performance credits under the new minimum purchase obligations, (iv) reductions
in prices charged to the Company by MCI for telephone services which the Company
could not otherwise expect to achieve without an increase in its minimum
purchase obligations and (v) the issuance by the Company of a three-year
promissory note in the amount of $4,200,000 to MCI, which is guaranteed by two
of the Company's officers and principal shareholders. The note bears interest at
9.5% and requires semi-monthly payments of principal and interest. Should the
Company default on the note, MCI has the right to demand payment of the entire
principal due and any accrued interest.
In August, 1998,LDDI failed to meet its obligations to MCI under this
new contract for either the note payments nor current usage payments. In order
to reduce the current usage payments, the Company had taken steps to switch a
significant proportion of its customers to a new carrier in the third quarter of
1998. MCI exercised its contractual right and suspended the Company's service
due to default on its obligations under the new contract. Management believes
that a majority in number of the Company's customers were switched to Cable and
Wireless before MCI suspended its service.
The Company has approached MCI to determine whether the arrangements
entered into in June, 1998 can be restructured to accommodate the Company's cash
position and allow LDDI to recommence using MCI's service upon a
recapitalization of the Company. If such discussions are not successful, there
can be no assurance that MCI will not seek to enforce its lien on LDDI's
receivables and other assets. In the event that MCI does so seek, the Company
will vigorously contest MCI's action and will assert in law its claims against
MCI for damages sustained in 1997 in the circumstances described above.
In April, 1998, LDDI requested that AT&T terminate its contract and
AT&T has agreed to release LDDI from its current contractual obligations and to
<PAGE> 8
3
waive all shortfall penalties and termination liabilities upon discharge of
LDDI's outstanding liability to AT&T of approximately $850,000 at August 31,
1998. LDDI has promised to pay the $850,000 liability to AT&T through a payment
plan pursuant to a non-interest bearing promissory note. There can be no
assurance that LDDI will be able to make timely payments on its proposed
promissory note to AT&T. Should LDDI fail to make timely payments on its
promissory note to AT&T or otherwise be in default under its arrangement with
AT&T, LDDI may also be liable for the entire amount of all shortfall penalties
proposed to be waived by AT&T.
Both MCI and AT&T hold liens on LDDI's receivables and assets in lieu
of security deposits.
In June, 1998, the Company signed two agreements with IDT which will
enable the Company to provide to its customers both dial-up and Dedicated
Internet Access. In July, 1998, the Company signed a Loan and Services Agreement
with IDT whereby IDT loaned the Company $300,000 at an interest rate of 12% per
annum.This loan is payable together with all accrued interest on the first
anniversary date of the agreement. In addition, IDT agreed to make additional
loans of $50,000 each at various times during the term of the agreement. Each of
these loans also bears interest at a rate of 12% per annum and is payable with
all accrued interest on the six month anniversary of the date that the loan is
made to the Company. As of October 29, 1998, only one of these additional loans
had been made. IDT has the option to convert any unpaid principal or interest
balance into shares of LDDI's common stock at a conversion rate of $1.00 per
share. IDT's obligation to make loans to the Company was conditioned upon the
Company entering into an agreement with IDT to provide standard carrier services
and Internet services to the Company's end users.
Since LDDI's 1997 marketing ventures did not generate the anticipated
level of revenue, the Company has begun to reduce operating costs by reducing
personnel.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AS COMPARED TO THE
SIX MONTHS ENDED JUNE 30, 1997.
Gross revenues for the six months ended June 30, 1998 were $9,566,369
as compared to $4,729,313 for the six months ended June 30,1997. The increase
in sales is attributable to revenue generated by the Company's psychic
marketing program, its televised marketing program, and its agreement with
National Benefits Consultants, LLC ("NBC"). For the six months ended June 30,
1998, the Company's psychic marketing program generated $3,254,980 million or
34% of revenue through membership fees charged to the Company's customers in
relation to the program . The televised marketing program generated
approximately $1,300,000 or 14% of gross revenue in billed telephone sales. The
Company's arrangement with NBC generated approximately $1,079,000 or 11% of
gross revenue.
Gross revenues for the period ended June 30, 1997 included a
significant volume of unbilled revenue in respect of certain new customers which
were acquired by LDDI since January 1, 1997 and processed through MCI and which
formed a large portion of the customers who were generated from the Company's
televised marketing program. The accounts in question were confirmed to LDDI's
service but, due to software problems at MCI, the Company had not received the
<PAGE> 9
4
benefit of these billings at June 30, 1997. MCI and the Company reached an
agreement in June, 1998 under which the Company forwent the benefit of such
unbilled revenue in return for various accommodations described above. Since the
Company was not able to meet its obligations under the new agreement, it has
migrated a majority in number of its customer base to a new carrier - Cable and
Wireless - through its aboved-mentioned relationship with IDT.
Gross profit was $2,019,102 and $978,412 for the six months ended June
30, 1998 and 1997, respectively. As a percentage of gross sales, the gross
profit margins were 21% for the six months ended June 30, 1998 and 1997. For the
six months ended June 30, 1997, the Company incurred a loss of approximately
$244,000 with respect to the sale of marketing kits sold through the Company's
televised marketing program. No such loss was recorded for the six months ended
June 30, 1998 but the benefit of this was offset by lower profit margins related
to two of the Company's marketing arrangements. Revenue generated from the
arrangement with NBC yields a lower price per minute in comparison to the
Company's other sources of revenue. In addition, profit margins generated from
psychic membership fees charged to customers are lower than those generated from
long distance telephone revenue.
Sales and marketing expenses were $180,277 and $248,122 for the six
months ended June 30, 1998 and 1997, respectively. As a percentage of gross
sales, sales and marketing expenses decreased from 5% for the six months ended
June 30, 1997 to 2% for the six months ended June 30, 1998. The percentage
decrease is attributable to two factors: limited expenditure on account
acquisition from outbound telemarketing firms due to concentration on other
marketing strategies in 1998, in particular to the relationships with third
parties who are responsible for marketing the Company's services; and increased
sales levels in 1998.
General and administrative expenses were $3,487,725 and $2,156,774 for
the six months ended June 30, 1998, and 1997, respectively. As a percentage of
gross sales, general and administrative expenses for the six months ended June
30, 1998 and 1997 were 36% and 46%, respectively. Factors which contributed to
the increase in general and administrative expenses are mainly related to the
Company's expansion of its resources in 1998 in anticipation of increased levels
of sales, including payroll and related administrative costs. Additional billing
costs were incurred in 1998 to meet the needs of the Company's new marketing
strategies particularly the psychic marketing program. In the first six months
of 1998, the Company increased its provision for bad debt based upon 1997
experience with uncollectible receivables. Since the Company's marketing plans
did not produce the anticipated level of revenue, the Company has taken steps to
streamline expenses by reducing personnel in the third quarter.
The Company incurred a net loss of $1,678,971 for the six months ended
June 30, 1998 compared to a net loss of $1,427,648 for the six months ended June
30, 1997.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 AS COMPARED TO
THE THREE MONTHS ENDED JUNE 30, 1997.
Gross revenues for the three months ended June 30, 1998 were $5,111,634
as compared to $2,632,111 for the three months ended June 30,1997.
The increase in sales is attributable to revenue generated by the Company's
psychic marketing program, its televised marketing program, and its agreement
<PAGE> 10
5
with National Benefits Consultants, LLC ("NBC"). For the three months ended June
30, 1998, the Company's psychic marketing program generated $1,878,997 or 37% of
revenue through membership fees charged to the Company's customers in relation
to the program . The televised marketing program generated approximately
$625,000 or 12% of gross revenue in billed telephone sales. The Company's
arrangement with NBC generated approximately $794,169 or 16% of gross revenue.
Gross revenues for the quarter ended June 30, 1997 included a
significant volume of unbilled revenue in respect of certain new customers which
were acquired by LDDI since January 1, 1997 and processed through MCI and which
formed a large portion of the customers who were generated from the Company's
televised marketing program. The accounts in question were confirmed to LDDI's
service but, due to software problems at MCI, the Company had not received the
benefit of these billings at June 30, 1997. MCI and the Company reached an
agreement in June, 1998 under which the Company forwent the benefit of such
unbilled revenue in return for various accommodations described above. Since the
Company was not able to meet its obligations under the new agreement, it has
migrated a majority of its customer base to a new carrier - Cable and Wireless -
through its above-mentioned relationship with IDT Corporation.
Gross profit was $1,198,403 and $425,136 for the three months ended
June 30, 1998 and 1997, respectively. As a percentage of gross sales, the gross
profit margins for the three months ended June 30, 1998 and 1997 were 23% and
16%, respectively. This increase is attributable to the fact that for the three
months ended June 30, 1997, the company incurred a loss of approximately
$264,000 with respect to the sale of marketing kits sold through the Company's
televised marketing program. No such loss was recorded for the three months
ended June 30, 1998 but the benefit of this was offset by lower profit margins
related to two of the Company's marketing arrangements. Revenue generated from
the arrangement with NBC yields a lower price per minute in comparison to the
Company's other sources of revenue. In addition, profit margins generated from
psychic membership fees charged to customers are lower than those generated from
long distance revenue.
Sales and marketing expenses were $88,041 and $176,303 for the three
months ended June 30, 1998 and 1997, respectively. As a percentage of gross
sales, sales and marketing expenses decreased from 7% for the three months ended
June 30, 1997 to 2% for the three months ended June 30, 1998. The percentage
decrease is attributable to two factors: limited expenditure on account
acquisition from outbound telemarketing firms due to concentration on other
marketing strategies in 1998, in particular to the relationships with third
parties who are responsible for marketing the Company's services; and increased
sales levels in 1998.
General and administrative expenses were $1,766,673 and $1,229,971 for
the three months ended June 30, 1998, and 1997, respectively. As a percentage of
gross sales, general and administrative expenses for the three months ended June
30, 1998 and 1997 were 35% and 47%, respectively. Factors which contributed to
the increase in general and administrative expenses are mainly related to the
Company's expansion of its resources in anticipation of increased levels of
sales, including payroll and related administrative costs. Additional billing
costs were incurred in 1998 to meet the needs of the Company's new marketing
strategies. In the second quarter of 1998, the Company increased its provision
<PAGE> 11
6
for bad debt based upon 1997 experience with uncollectible receivables.
The Company incurred a net loss of $675,105 for the three months ended
June 30, 1998 compared to a net loss of $981,138 for the three months ended June
30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
In the third quarter of 1998, Long Distance Direct Holdings, Inc.(LDDH)
became a shareholder in a new business, incorporated as PowerChannel, Inc..
PowerChannel has been formed to provide a unique worldwide program of Internet
access utilizing the television. PowerChannel plans to raise capital utilizing
individual investors and/or strategic partners and is currently engaged in a
Private Placement of shares under Rule 506 of Regulation D of the Securities Act
of 1933. PowerChannel expects negative cash flow from operations as it expands
its technical, marketing, sales and administrative capabilities. PowerChannel
believes that the resources raised through this financing will provide adequate
liquidity to meet its needs in respect of testing the program and establishing
its base operations and its marketing methods. There can be no assurance that
sufficient funding will be raised to provide this liquidity nor that this
venture will cease to result in negative cash flow from operations.
LDDI (the Company's existing telecommunications business) has sustained
operating losses for each year of its existence due to a lack of working capital
to finance adequate levels of marketing expenditure, insufficient revenues and
other reasons. Since its inception, the Company has financed its operational
losses through debt and equity placements and will need to continue to do so
until revenues reach such levels that enough working capital is generated from
its operations. There can be no assurance that the Company will realize this
level of revenue.
The Company's trend of incurring operating losses is likely to
continue until its revenues reach certain levels materially higher than any
achieved to date. There can be no assurance that the Company will not continue
to experience operating losses in the future or that the Company's revenues will
reach such levels.
Until the Company's revenues reach certain levels materially higher
than any achieved to date, as to which there can be no assurance, the Company
will be required to raise substantial additional amounts of capital from the
sale of its securities or through debt financing arrangements to finance its
operations. There can be no assurance that additional financing will be
available on acceptable terms, if at all.
The Company completed a debt financing in a private offering that was
not registered under the Securities Act of 1933 in order to meet short term
capital requirements. The Company sought to raise up to $1,500,000 from a
limited group of selected accredited investors and successfully raised
approximately $1,000,000 since the private offering commenced in February, 1998.
The proceeds of the debt financing were used to fund the Company's marketing
ventures and for working capital purposes.
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: October 30, 1998 Long Distance Direct Holdings, Inc.
By:/s/ Steven Lampert
--------------------------
Steven Lampert, President
(Principal Executive Officer)
By:/s/ Michael Preston
--------------------------
Michael Preston, Chief
Financial Officer (Principal
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PROFIT/LOSS STATEMENT AND BALANCE SHEETS OF LONG DISTANCE DIRECT HOLDINGS INC.
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH LONG DISTANCE DIRECT
HOLDINGS INC. FORM 10QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 5,824
<SECURITIES> 0
<RECEIVABLES> 7,051,398
<ALLOWANCES> 2,346,250
<INVENTORY> 0
<CURRENT-ASSETS> 4,926,220
<PP&E> 895,240
<DEPRECIATION> 400,771
<TOTAL-ASSETS> 6,432,169
<CURRENT-LIABILITIES> 6,414,296
<BONDS> 0
0
0
<COMMON> 9,629
<OTHER-SE> 11,260,641
<TOTAL-LIABILITY-AND-EQUITY> 6,432,169
<SALES> 9,495,211
<TOTAL-REVENUES> 9,495,211
<CGS> 7,476,109
<TOTAL-COSTS> 3,668,002
<OTHER-EXPENSES> 30,071
<LOSS-PROVISION> 1,143,165
<INTEREST-EXPENSE> 24,033
<INCOME-PRETAX> (1,678,971)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,678,971)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,678,971)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> 0
</TABLE>
