TOTAL WORLD TELECOMMUNICATIONS INC /DE/, 10KSB40, 1999-04-29

TOTAL WORLD TELECOMMUNICATIONS INC /DE/
10KSB40, 1999-04-29
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT

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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Year Ended September 30, 1997

Commission File No. 0-20922

WHITEHALL ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)

Delaware 75-2274730
- --------------------------------------------------------------------------------
(State of Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

801 Brickell Avenue, 9th Floor, Miami, Florida 33131
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(Address of Principal Executive Offices) (Zip Code)

(904) 409-0200
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act: None
----

Name of Each Exchange Title of Each Class
on Which Registered
________________________________ ________________________________
________________________________ ________________________________

Securities registered under Section 12(g) of the Exchange Act:____________

Common Stock ($.00001 par value)
- --------------------------------------------------------------------------------
(Title of Class)

Check whether the issuer (1) has 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 issuer was required to file such reports, and (2)
has been subject to such filing requirements for the past 90 days.

Yes [X] No__

1
<PAGE>
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.

Yes [X] No__

State issuer's revenues for its most recent fiscal year: $41,034,609.

State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days.

Common Stock, par value $.0001 per share ("Common
Stock"), was the only class of voting stock of the Registrant
outstanding on December 31, 1998. Due to the events and
circumstances taking place in the operations of the Company,
there have been no material exchange transactions, and
consequently, no recent market value on the closing bid price
of the Common Stock on the NASD Automated Quotation System. By
the foregoing statements, the Registrant does not intend to
imply that any of these officers, directors or beneficial
owners are affiliates of the Registrant or that the aggregate
market value, as computed pursuant to rules of the Securities
and Exchange Commission, is in any way indicative of the
amount which could be obtained for such shares of Common
Stock.

ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS

Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.

Yes [X] No__

APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

124,900,000 shares of Common Stock, $.0001 par value,
as of December 31, 1998.

2
<PAGE>
PART I
------

BUSINESS

ITEM 1. DESCRIPTION OF BUSINESS
-----------------------

OTHER THAN HISTORICAL AND FACTUAL STATEMENTS, THE MATTERS AND ITEMS DISCUSSED IN
THIS ANNUAL REPORT ON FORM 10-KSB ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. ACTUAL RESULTS OF WHITEHALL ENTERPRISES, INC. FORMERLY
KNOWN AS TOTAL WORLD TELECOMMUNICATIONS, INC. AND ITS SUBSIDIARIES
(COLLECTIVELY, THE "COMPANY") MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED
IN THE FORWARD-LOOKING STATEMENTS. CERTAIN FACTORS THAT COULD CONTRIBUTE TO SUCH
DIFFERENCES ARE DISCUSSED WITH THE FORWARD-LOOKING STATEMENTS THROUGHOUT THIS
REPORT AND ARE SUMMARIZED IN THIS SECTION AND "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-FORWARD-LOOKING
STATEMENTS-CAUTIONARY LANGUAGE."

INTRODUCTION AND RECENT DEVELOPMENTS
- ------------------------------------

Whitehall Enterprises, Inc. formerly known as Total World
Telecommunications, Inc., formerly International Standards Group, Limited (the
"Company"), has filed with the United States Bankruptcy Court for the Southern
District of Florida (the "Bankruptcy Court") its Amended Plan of Reorganization
dated July 2, 1998. The Company's Amended Disclosure Statement dated July 2,
1998 (the "Disclosure Statement") were submitted pursuant to Section 1125 of the
Bankruptcy Code 11 U.S.C. Section 101, et. seq. (the "Bankruptcy Code") in
connection with the solicitation of votes on the Plan from Holders of Impaired
Claims against and Impaired Equity Interests in the Debtor.

In the opinion of the Company, as described below, the treatment of
claims and equity interests under the Plan contemplates a greater recovery than
that which is likely to be achieved under other alternatives for the
reorganization or liquidation of the Company. Accordingly, the Company believes
that confirmation of the Plan is in the best interests of creditors and holders
of equity interests and recommends that the creditors and holders of equity
interests vote to accept the Plan.

3
<PAGE>

The Plan has been approved by the Company's Board of Directors. In
addition, Advantage Fund Limited, formerly known as GFL Advantage Fund Limited
("Advantage"), which the Company believes holds in excess of 90% of the
unsecured claims against the Company, has consented to the Plan as part of a
settlement between the Company and Advantage which has been approved by the
Bankruptcy Court.

In summary, the Plan is based upon (a) a transfer of all Unsecured
Claims and assets of the Company (excluding certain tax attributes and a portion
of the Condominium Parcel Net Proceeds) to a liquidating trust of which Holders
of Allowed Unsecured Claims will be the primary beneficiaries and Holders of
Allowed Subordinated Claims will be secondary beneficiaries, (b) the purchase by
the Company of all of the issued and outstanding stock of Mega Blow Moulding
Limited, a Canadian plastics company ("MBM"), from 1299004 Ontario Corporation
("129 Ontario"), a wholly-owned subsidiary of 1274328 Ontario Inc. (the
"Proponent"), in consideration for the issuance to the Proponent of
approximately 76% voting control of the Reorganized Debtor and the cash sum of
$75,000, (c) the cancellation of all Existing Preferred Stock and Existing
Common Stock of the Debtor, and (d) the issuance of common stock of the
Reorganized Debtor to Holders of Existing Preferred Stock and Existing Common
Stock of the Debtor.

In August 1997, the Board of Directors of the Company was substantially
reconstituted. The new Board, having observed the failure of TNT to successfully
continue its Chapter 11 case, decided to examine alternatives to maintain a
level of stability with the Company for that period of time necessary for a new
investor to fund ongoing and future operations for the Company. The new Board
hoped to structure a transaction with a new investor which would satisfy
existing Creditor Claims and preserve some value for existing stockholders of
the Company. In examining all of its alternatives, the new Board concluded
shortly after its appointment that the Company had no resources (financial or
otherwise) to defend against any claims or actions which had been or could be
asserted by Advantage. In addition, the filing of the involuntary petition
against the Company on December 1, 1997 left the Company with no option but to
seek to successfully reorganize under Chapter 11 of the Bankruptcy Code. In
order to do so, the Company needed the support of Advantage, which, as stated
above, holds in excess of 90% of the Unsecured Claims against the Company.

The Company's efforts have resulted in (a) the Advantage Settlement
Agreement, which has been approved by the Bankruptcy Court, pursuant to which
Advantage has agreed to support the Plan, and (b) an agreement for the Debtor to
acquire all of the stock of MBM from a wholly-owned subsidiary of the Proponent,
pursuant to which MBM will become a wholly-owned operating subsidiary of the
Reorganized Debtor.
4

<PAGE>
Notwithstanding the uncertain distribution to Unsecured Creditors and
the reduced equity interest for stockholders, the Company believes that the Plan
is in the best interest of all Unsecured Creditors and Holders of Equity
Interests for a number of reasons. First, no free and clear assets of
significant value exist which are available for immediate liquidation and
distribution to Unsecured Creditors and Holders of Equity Interests. Second, TNT
the Company's chief operating subsidiary prior to the Involuntary Petition Date,
is presently in a Chapter 7 bankruptcy proceeding in Texas, and the Company will
in all likelihood receive nothing in return for its substantial investment in
TNT. Third, the costs of administering the Estate continue to accrue as long as
the Reorganization Case remains pending, further eroding whatever value there is
available for Unsecured Creditors. Fourth, Advantage, which holds in excess of
90% of the total dollar amount of Unsecured Claims, supports the Plan and has
already expended significant funds in investigating Causes of Action, the
proceeds of which will be available for distribution to all Unsecured Creditors
on a pro rata basis. Indeed, absent confirmation of the Plan, the Company would
itself have to consider an orderly liquidation of assets in Chapter 11 or a
conversion to Chapter 7, either of which would yield far less of the total
number of shares of Reorganized Debtor Common Stock issued and outstanding
immediately after the Effective Date.

The Company believes that its efforts to maximize the return for
Creditors and to find an investor and attract value for stockholders have been
full and complete. The Company further believes that the Plan is in the best
interest of all Creditors and Holders of Equity Interests, even though (a) it
does not appear that there are sufficient funds to pay Unsecured Creditors in
full and (b) the percentage of the outstanding equity to be retained by Holders
of Equity Interests following the Effective Date will be substantially diluted.

Prior to the petition for bankruptcy and through September 12, 1997,
the Company, through various subsidiaries, provided telecommunications services.
Through Financial Standards Group, Inc. ("FSGI") and Real Estate Services
Network Holding Corp. ("RESN") subsidiaries, both Florida corporations the
Company assisted credit unions and their supervisory committees in performing
comprehensive or internal regulatory compliance audits in satisfaction of their
statutory requirements. It also provided related internal auditing, accounting
and managerial advisory services to credit unions. RESN provided commercial and
residential real estate brokerage, mortgage origination and title services.

5
<PAGE>

In June 1996, the Company acquired Houston-based Total National
Telecommunications, Inc., doing business as Whitehall Enterprises, Inc. formerly
known as Total World Telecom, Inc. ("TWT"), a Tier 2 switch-based interexchange
carrier that utilizes digital and fiber optic facilities, with switches located
in New York, Chicago, Los Angeles, Atlanta, Houston, Dallas, Kansas City and
Miami as of December 31, 1996, and two additional switches in Seattle and
Washington, D.C. will be operational in early 1997.

In the latter part of March 1997, management elected to divest the two
business units comprising the Company's non-telecommunication operations. These
two units are Financial Standards Group, Inc., the credit union auditing
operation ("FSGI"), and Real Estate Services Network Holding Corp., the real
estate group ("RESN").

The Company has sold to former employees the outstanding stock in FSGI,
all of which was owned by TWTI.

In addition, the Company has sold to management of the real estate
services group all of the outstanding stock in its subsidiary, RESN, as well as
the commercial warehouse facility in Mount Vernon, Ohio.

The Company received notes and receivables of $4,050,000 as proceeds
for the sale of the aforementioned companies; however, because of these
entities' poor operating performance, the Company has recorded these receivables
at no estimated realizable value of which is based on the underlying collateral
in the companies sold.

The Company's net book value of the foregoing is approximately
$7,310,000. Accordingly, the Company has recorded a charge to operations of that
amount which represents the difference between the carrying value and the
estimated realizable value.

On July 23, 1997, the Company's wholly-owned operating subsidiary,
Total National Telecommunications, Inc., filed a petition for relief under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the Southern District of Texas. Under Chapter 11, certain claims against the
Company's subsidiary in existence prior to the filing of the petitions for
relief under the federal bankruptcy laws are stayed while the subsidiary
continues business operations as Debtor-in-Possession. Claims secured against
the subsidiary's assets ("secured claims") also are stayed, although the holders
of such claims would have the right to move the court for relief from the stay.

On September 12, 1997, the case was converted to Chapter 7, and a
trustee was appointed. On September 24, 1997, the assets of TNT were sold
pursuant to 11 U.S.C. Section 363. Accordingly, the Company's intangible assets
related to this subsidiary have been written off.

6
<PAGE>
On March 14, 1996, the Company's wholly-owned subsidiary RESN, entered
into an Agreement with Intervest, Inc. ("Intervest"), Sidney A. Lewis ("Lewis")
and U.S. Mortgage Network Corp. ("USM") pursuant to which the parties agreed,
inter alia, to the rescission of the Stock Purchase Agreement dated November 21,
1995 pursuant to which Intervest had sold all of its stock interest in USM to
RESN. In connection with the consummation of the Agreement dated March 14, 1996,
the shares of common Stock of the Company were terminated, and USM relinquished
any interest it held in the Company's Mount Vernon distribution facility. In
addition, funds previously advanced by the Company to USM in the amount of
$300,000 are to be repaid no later than July 1, 1997 (although no longer
included as a receivable in the Company's financial statements). RESN's new
mortgage banking subsidiary, The Financial Group Incorporated, has assumed
certain liabilities associated with USM as described hereafter.

On November 6, 1996, the Company acquired 100 percent of the
outstanding stock of Southwestern Telecom, Inc. ("SOW"), San Antonio, Texas, a
"casual-user" direct-dial long distance company. The purchase price for the
acquisition was $1,023,765 in cash. Southwestern Telecom is expected to expand
on a geographic basis where TWT already has an existing network to better
utilize TWT's origination and termination facilities. Mr. David Anderson,
founder of Southwestern Telecom, will stay on as President of the new
subsidiary. Southwestern Telecom currently maintains over 50 percent of its
casual users as active accounts when measured at six-month intervals. This
length of subscribership is believed to be one of the highest in the casual-user
market. Southwestern Telecom had revenues of approximately $3.1 million for its
year ended December 31, 1995 and approximately $2.7 million for the six months
ended June 30, 1996.

7
<PAGE>

On December 16, 1996, the Company completed the acquisition of all of
the capital stock of NETTouch Communications, Inc., Dallas, Texas ("NETTouch").
In consideration for the acquisition, the Company paid to the principal
shareholders of NETTouch $2,400,000 and issued a Common Stock Purchase Warrant
(the "Warrants") to acquire shares of Common Stock of the Company on or prior to
December 31, 2000 at an exercise price of $7.75 per share. In addition,
commencing with the month ended November 30, 1996, the Company is obligated to
make additional payments to such shareholders up to an aggregate of $4,800,000,
provided NETTouch continues to generate incremental monthly gross revenues in
excess of the highest gross revenues received in any preceding calendar month in
accordance with the formula established. The actual number of Warrants to be
received is predicated on the level of revenues periodically obtained by
NETTouch during the 1997 calendar year. The principal shareholder of NETTouch
was Telecommunications Resources, Inc. ("TRI") also from Dallas, TX. TRI is a
software developer and provider of telecommunications platforms which converge
technologies and telecommunications services, such as worldwide long-distance,
voice mail, virtual fax, travel card, wireless messaging notification, enhanced
"follow me" features, conference calling, paging, internet access,
text-to-screen e-mail, website development and hosting and more into the
convenience of single 1-800/888 numbers. These services allow the user a variety
of office services through one telephone number. NETTouch currently markets
these bundled services under the brand name "N'Touch." Under the acquisition
agreement, N'Touch as a wholly-owned subsidiary of the Company will receive
licensing rights to market TRI's future products and services to the home-based
business segment, which management believes is one of the fastest growing
segments in our society.

TOTAL WORLD TELECOMMUNICATIONS, INC.
- -----------------------------------

General
-------

Total World Telecommunications, Inc. formerly known as Total World
Telecom was established in Houston, Texas in 1991 as a single switch-based long
distance carrier, and has since expanded its revenue base and geographic scope
of operations to become a Tier 2 switch-based long distance carrier with eight
Stromberg-Carlson DCO Tandem switches located in Houston, Dallas, Miami,
Atlanta, New York, Chicago, Kansas City and Los Angeles. TWT's digital fiber
optic network uses leased transmission facilities and proprietary switches to
originate and terminate calls between U.S. cities together with utilization of
overflow facilities to other major carriers for all other areas. In addition,
TWT has bulk purchase agreements with major international carriers which allows
it to offer qualitative and competitively priced international service.

8
<PAGE>

On December 16, 1996, TWT acquired all of the outstanding shares of
NETTouch Communications, Inc. from Telecommunications Resources, Inc. NETTouch
markets various telecommunications platforms which are licensed by TRI which
effectively converge technologies and telecommunications services such as
worldwide long distance, voice mail, virtual fax, travel card, wireless
messaging notifications, enhanced "follow-me" features, conference calling,
paging, internet access, text-to-screen e-mail, website development and hosting
and related technology which afford users a variety of office services through
one telephone number. On November 6, 1996, TWT acquired 100% of the outstanding
shares of Southwestern Telecom, Inc., a "casual user" direct dial long distance
carrier.

Acquisitions
------------

On November 6, 1996, TWT acquired all of the outstanding shares of
Southwestern Telecom, Inc., San Antonio, Texas, a "casual-user" direct-dial long
distance company. SOW's customers access its network by dialing a unique carrier
identification code ("CIC Code") before dialing the number they are calling.
Using a CIC Code to access SOW's network is known as "casual calling" because
customers can use SOW's services at any time without changing their existing
long distance carrier. At the present time, SOW provides long distance services
in two states. TWT plans to expand SOW's marketing efforts to additional states
during 1997. Since marketing efforts began in 1994, its revenues have grown to
approximately $2.7 million for the six-month period ending June 30, 1996.

On December 16, 1996, the Company completed the acquisition of all the
shares of NETTouch Communications, Inc., Dallas, Texas. NETTouch Communications,
Inc., which markets under the name of N'Touch, is a provider of
telecommunications services which converge technologies and telecommunications
services, such as worldwide long-distance, voice mail, virtual fax, travel card,
wireless messaging notification, enhanced "follow-me" features, conference
calling, paging, internet access, text-to-screen e-mail, website development and
hosting and more. NETTouch allows every user a variety of office services
through the convenience of a single 800/888 number.

Employees
---------

As of September 30, 1996, TWT employed 80 persons on a full time basis
and two on a part time basis. None of TWT's employees are members of a labor
union or are covered by a collective bargaining agreement. AT September 30, 1997
TWT employed no one due to its bankruptcy.

Litigation
----------

All litigation ceased as a result of TWT's Chapter VII bankruptcy.

9
<PAGE>
Bankruptcy proceedings
----------------------

MOUNT VERNON DISTRIBUTION CENTER AND REAL ESTATE SERVICES NETWORK HOLDING CORP.
- -------------------------------------------------------------------------------
(formerly MEMBERSHIP REALTY HOLDING CORP.)
- ------------------------------------------

On January 16, 1991, the Company acquired all of the capital stock of
Mount Vernon Distribution Center, Inc. ("Mount Vernon") from the Loveridge
Family interests including C. Denning Loveridge and John Loveridge, who are
Directors of the Company in exchange for cash, Common Stock of the Company and
assumption of existing liabilities. Mount Vernon was liquidated and dissolved at
that time. The commercial warehouse facility is located in Mount Vernon, Ohio,
which is 45 miles northeast of Columbus, Ohio and consists of 660,551 square
feet of industrial manufacturing warehouse facilities on a 61-acre site. The
property is comprised of an assemblage of five buildings consisting of up to
three-story brick, concrete and metal structures as well as various smaller
detached improvements. Based in part on an appraisal completed in January 1997,
(with primary reliance on the market value approach to valuing real property)
the Company includes the Mount Vernon Distribution Center facility and land as a
listed asset held for resale on its consolidated balance sheet at September 30,
1996 at a value of $3,479,754. At the time of acquisition, such facility and
land were recorded at net realizable value, and they continue to be carried at
net realizable value based on management's best estimate of such facility and
land as of September 30, 1996. In the event the aforementioned appraisals had
placed primary emphasis on the income approach to valuing real property, it is
possible that the valuation therefor would have been substantially less than the
market value approach with attendant impairment in the carrying value of such
facility and land.

10
<PAGE>

The property is collateral for a 10-year bank installment note maturing
in December 2001. Monthly payments of $9,659 include principle and interest at
10% per annum. At September 30, 1996, the principal balance was $477,575.

RESN commenced operations in May 1992 as a full service real estate
brokerage firm that recruited established agents by passing through 100% in
commissions earned by its member sales agents. RESN provides its members with
various experienced and necessary administrative support personnel services,
quality facilities and various technology products with which to enhance their
productivity.

During 1997, the Company sold to management of the real estate services
group all of the outstanding stock of RESN, as well as the commercial warehouse
facility in Mount Vernon, Ohio.

ITEM 2. DESCRIPTION OF PROPERTIES
-------------------------

The Company's executive offices are located at: 801 Brickell Avenue,
9th Floor, Miami, Florida 33131. Until August 31, 1998, the executive offices
were located at: 3200 North Military Trail, Suite 300, Boca Raton, Florida
33431. These premises consist of approximately 7,700 square feet of space. In
June 1995, the Company purchased this office condominium at a purchase price of
$636,000 which included $50,000 in cash, the issuance of 200,000 shares of the
Company's Common Stock and a wrap-around mortgage totaling $520,000. At
September 30, 1997, the principal balance remaining was $436,505.

TWT's corporate offices are located at 1001 Fannin, Suite 300, Houston,
Texas 77002. The lease agreement for 27,641 square feet is for a term beginning
February 16, 1995 and concluding on March 31, 2000. The lease provides for a
base rent of $7,923.75 per month plus operating expenses estimated to be
$14,764.90 per month adjusted yearly. The lease allows for termination after the
36 months with no penalty.

TWT leased additional office space located at 16416 Northchase Drive,
Suite 290, Houston, Texas 77060. The lease agreement for 6,060 square feet is
for a term beginning February 1, 1994 and concluding on January 31, 1999 at a
base rent of $4,042.72 plus operating expenses escalation of $332.00 per month.

11
<PAGE>

TWT's Atlanta switch site is located at 3525 Piedmont Road, N.E., Suite
515, Two Piedmont Center, Atlanta, Georgia 30305. The lease agreement for 1,445
square feet is for a term beginning June 1, 1994 and concluding on May 31, 1999
at a fixed rent of $1,505.00 per month. TWT's Chicago switch site is located at
233 South Wacker Drive, Suite 2100, Chicago, Illinois 60606. The lease agreement
is for a term beginning October 15, 1994 and concluding on October 15, 1999. The
rent is based at $250 per rack, and the current monthly charge is $1,750.00.
TWT's Houston switch site is located at 500 Dallas, Houston, Texas 77002. The
lease agreement is for a term beginning June 23, 1992 and concluding on June 22,
1997. The rent is $1,500 per month. TWT's New York switch site is located at Two
World Trade Center, New York, New York. The lease agreement is for a term
beginning March 21, 1994 and concluding on March 20, 1997. The space available
is for not more than seven racks at $250.00 per rack. The current rent is
$2,000.00 per month. TWT's Los Angeles switch site is located 700 South Flower,
Los Angles, California 90017. The lease agreement is for a term beginning
November 1, 1995 and concluding October 31, 2000. The rent is $500.00 for the
first rack and $275.00 per rack for each additional rack per month. The current
rent is $2,425 per month.

ITEM 3. LEGAL PROCEEDINGS
-----------------

All litigation closed as a result of the Company's Chapter XI.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------

Not applicable.

<PAGE>
PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
--------------------------------------------------------

The Company's Common Stock is traded on NASDAQ under the symbol "TWTI."
On October 15, 1996, the Company amended its Certificate of Incorporation and
undertook a one-for-fifteen (1:15) reverse split of its outstanding Common
Stock. The following table sets forth the high and low bid quotations for the
Common Stock since the commencement of trading and for the periods indicated.
These quotations reflect prices between dealers, do not include retail mark-ups,
mark-downs or commission and may not necessarily represent actual transactions.

High Low
---- ---

October 1 - December 31, 1993 $ 3.06 $1.75
January 1 - March 31, 1994 $ 4.16 $1.25
April 1 - June 30, 1994 $ 3.81 $1.75
July 1 - September 30, 1994 $ 3.56 $1.56
October 1 - December 31, 1994 $ 1.18 $0.50
January 1 - March 31, 1995 $ 1.00 $0.32
April 1 - June 30, 1995 $ 1.19 $0.38
July 1 - September 30, 1995 $ 1.29 $0.75
October 1 - December 31, 1995 $ 1.81 $0.66
January 1 - March 31, 1996 $ 1.56 $0.50
April 1 - June 30, 1996 $ 1.53 $0.56
July 1 - September 30, 1996 $ 1.16 $0.47
October 1 - October 14, 1996 $ 0.53 $0.41
October 15 - December 31, 1996 $10.05 $4.75
January 31 - February 27, 1997 $ 6.25 $2.94
February 28 - March 30, 1997 $ 7.31 $4.31
March 31 - April 29, 1997 $ 5.56 $3.50
April 30 - May 29, 1997 $ 4.06 $1.69
May 30 - June 29, 1997 $ 3.25 $0.56*
June 30 - September 29, 1997 $ 1.75 $0.13
September 30 - October 30, 1997 $ 0.19 $0.00
October 31 - November 27, 1997 $ 0.80 $0.01
November 28 - December 30, 1997 $ 0.10 $0.01
December 31 - January 29 1998 $ 0.10 $0.00
January 30 - March 31, 1998 $ 0.05 $0.00
April 30 - May 28, 1998 $ 0.13 $0.00
May 29 - June 29, 1998 $ 0.05 $0.00
June 30 - July 30, 1998 $ 0.07 $0.00
July 31 - August 30, 1998 $ 0.01 $0.00
August 31 - September 30, 1998 $ 0.05 $0.00
October 30 - December 31, 1998 $ 0.04 $0.00

*After May, 1997 the Company had no significant operations. Consequently, after
May, 1997, there have been no authoritative/authentic bid quotations.

13
<PAGE>
As of December 31, 1990, the approximate number of holders of the
Company's Common Stock was 8,600.

The Company has never paid cash dividends on its Common Stock. The
Company presently intends to retain future earnings, if any, to finance the
expansion of its business and does not anticipate that any cash dividends will
be paid in the foreseeable future. Future dividend policy will depend on the
Company's earnings, capital requirements, expansion plans, financial condition
and other relevant factors.

During 1997, the Company was obligated to pay semiannual cumulative
dividends of 8% or $58,400 on an annual basis on the 73,000 shares of its Series
A Preferred Stock presently outstanding. The Company is obligated to pay monthly
cumulative dividends of 2.7% or $452,000 until the underlying shares of Common
Stock are registered under the Securities Act of 1933 on the 178,500 shares of
its Series M Preferred Stock presently outstanding.

Pursuant to the Company's Convertible Note dated December 9, 1996 in
favor of GFL Advantage Fund Limited, the Company was precluded from paying
dividends on its capital stock during the term that such note remains
outstanding.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
---------------------------------------------------------

The Company's consolidated net loss for the year ended September 30,
1997 was $87,784,963. The estimated loss from disposal of these two segments had
been accrued at $7,144,423.

For the year ended September 30, 1997, the Company had total
consolidated revenue of $41,034,609 in contrast to $21,584,874 for the year
ended September 30, 1996. The reason for the increase in revenues was due to the
acquisition of the telecommunications (TNT) division.

For the year ended September 30, 1997, the Company had a gross loss of
($6,104,398) compared to a gross profit of $2,502,138 for the year ended
September 30, 1996. For the year ended September 30, 1997, the Company had a
loss from continuing operations of $109,502,617 as compared to a loss from
continuing operations for the year ended September 30, 1996 of $12,125,097.

The net gain from discontinued operations for the year ended September
30, 1997 was $21,757,654. This was primarily due to the loss on disposal of the
real estate brokerage and credit union auditing segments and the recognition of
the forgiveness of debt in TWT as a result of its Chapter VII.

14
<PAGE>
Interest expense increased to $7,266,885 for the year ended September
30, 1997 as compared to $835,167 for the year ended September 30, 1996. This is
primarily due to the disputed interest owed on the note payable pursuant to
Regulation D in the amount of $4,900,000. Other income increased by $1,268,823
for the year ended September 30, 1997 due to the reversal of the credit arising
from a disputed transaction of $1,500,000.
The Company's consolidated net loss for the year ended September 30,
1997 was $87,784,963.

During the year ended September 30, 1998, the Company focused its
resources in the effort to successfully achieve its Chapter XI Bankruptcy
reorganization Plan.

The Company's plan for growth included the acquisition of MBM. The
Board of Directors are currently studying several other acquisitions in South
Florida. To achieve this growth and the necessary working capital, the Company
will require additional funding. The Company has received preliminary
commitments from investors to arrange future funding. While the Company has
reason to expect the completion of these arrangements, no assurances can be
given that such funds will be provided.

Description of Stock Purchase Agreement
- ---------------------------------------

On June 19, 1998, following extensive negotiations, the Debtor entered
into the Stock Purchase Agreement with 129 Ontario has agreed to sell, and the
Debtor (subject to the approval of the Bankruptcy Court) has agreed to purchase,
effective as of the Effective Date 100% of the issued and outstanding stock of
MBM. As a result thereof, on and after the August 28, 1998, MBM will be a
wholly-owned subsidiary of the Reorganized Debtor. Prior to and during the
Reorganization Case, management of the Debtor has actively searched for an
operating business to bring into the Debtor following the Effective Date and has
determined, in the exercise of its business judgment, that MBM is the best
operating business available at this time. In this regard, the Debtor required
the Proponent to obtain an independent valuation of MBM. In addition, the Debtor
has conducted, and will continue to conduct up to the date of the Confirmation
Hearing, due diligence as to MBM and its business operations. The Debtor has
agreed in the Stock Purchase Agreement, in consideration for the sale of the MBM
stock, that, subject to the terms and conditions of the Stock Purchase
Agreement, including the Confirmation of the Plan, it will (a) cause the
Reorganized Debtor to issue to the Proponent at the Closing 4,000,000 shares of
the Reorganized Debtor Preferred Stock, and (b) pay the sum of $75,000 in cash
to the Proponent. The above is a brief summary of the material terms of the
Stock Purchase Agreement.

15
<PAGE>

General Information Regarding the Proponent and 129 Ontario
- -----------------------------------------------------------

The Proponent, 1274328 Ontario Inc., is an Ontario corporation which
was formed on December 31, 1997. The Proponent's business address is 3101
Bathurst Street, Suite 600, Toronto Ontario M6A2A6. The Proponent is a holding
company which has an investment in MBM and holds passive investments in other
enterprises. Because it was formed on December 31, 1997, the Proponent has no
financial history. The sole shareholder of the Proponent is The Gerendasi Group
129 Ontario, which controls the issued and outstanding stock of MBM, is a
wholly-owned subsidiary of the Proponent. The Debtor has been advised by the
Proponent that none of the Proponent, 129 Ontario or MBM have had or have any
affiliation with the Debtor or CVI, except that the Gerendasi Group formerly
owned a small percentage of the Debtor's common stock which was sold in 1996.

General Information Regarding MBM
- ---------------------------------

Overview. Since its formation in 1984, MBM has operated as a
specialized custom molder or manufacturer of plastic bottles and containers for
use in the pharmaceutical, health and beauty, household cleaner and food product
industries. During fiscal 1997, MBM's revenues are generated in the United
States. MBM also has a strong market presence in the Province of Ontario,
Canada, which is the main manufacturing center in Canada. Plastic is a
disposable material which is in high demand in today's environmentally friendly
and industrialized world. Management of MBM believes that demand will continue
to grow significantly well into the next century. With an estimated market in
North America of over $15 billion for plastic products, management of MBM
believes that MBM is well positioned for growth.

Customers. MBM concentrates on manufacturing products for customers who
are the end user of the products and orders placed by manufacturer agents. MBM
has fostered relationships with many major North American corporations,
including Johnson & Johnson, G.K. Packaging, Fenton Webber, Novo Pharm, Jones
Packaging and the Canadian shampoo division of L'Oreal. Management of MBM
believes that MBM has an excellent reputation for quality and customer services
and prides itself on its ability to consistently maintain a zero percent defect
rate. This has resulted in long-standing customer relationships, many in excess
of 10 years.

Facilities/Equipment. MBM operates from a leased, 46,000 square foot
manufacturing facility in metropolitan Toronto, Canada. MBM operates nine Bekum
blowing machines. The Bekum machine is considered by industry experts to be the
best currently available and gives MBM a state-of-the-art manufacturing
capacity. The Bekum machine can be operated almost indefinitely when properly
maintained and updated. All machines are computerized and controlled by special
tracking devices which monitor all aspects of machine productivity. Further,
MBM's computerized systems give the manufacturing process numerous diagnostic
features which maximize productivity and quality control. All manufacturing
machines are constantly serviced and maintained to the highest degree possible
by a specially trained maintenance staff as well as by 24 hour on-call
maintenance professionals. MBM seeks to maximize productivity and utilization of
fixed overhead cost by operating the plant 24 hours a day with four shifts.

16
<PAGE>

Personnel. MBM employs regular employees including production,
management, foremen and office staff. MBM's management is experienced in every
facet of operations including machine operation, machine repairs and
maintenance, completing setups, mold maintenance, purchasing, distributing and
marketing. A majority of MBM's staff has been with MBM since its inception and
has grown and been promoted over time. It is presently anticipated that MBM's
management will remain in place following the Effective Date.

Materials. MBM's major raw usage consists of the following resins: Pet
G., H.D.P.E. (High Density Polyethylene) and L.D.P.E. (Low Density
Polyethylene). Management of MBM is not aware of any environmental concerns in
respect of MBM, its manufacturing facilities or its products. MBM presently uses
six major suppliers of the above resins. MBM has been dealing with each of its
major suppliers for over ten years. In the event that its existing sources of
supplies are insufficient to meet its existing needs, management of MBM believes
that alternative supplies would be available at competitive prices from one of
its other major suppliers or from outside alternative suppliers not currently
engaged by MBM.

Valuation of MBM. In connection with the transactions contemplated by
the Stock Purchase Agreement, the Proponent has engaged an independent
accountant to value the shares of MBM to be acquired by the Debtor. The
valuation report was conducted as of February 1, 1998 and provided a value
ranging from $9.7 to $11 million for MBM. The financial information included in
the valuation report is in Canadian dollar values. As of February 1, 1998, the
Canadian dollar had a value of $.69 in United States dollars. As of June 30,
1998, the Canadian dollar had a value of slightly in excess of $.68 in United
States dollars. Due to the cost to the Estate and the fact that the valuation
report has been rendered by an independent Canadian accounting firm, the Debtor
has decided not to obtain its own valuation of the shares of MBM.

17
<PAGE>
RESULTS OF OPERATIONS
- ---------------------

Since May, 1997, the Company has not carried any significant continuing
operations. As discussed previously, the Company's efforts were focused on in
achieving its Chapter XI reorganization plan. During the year ended September
30, 1998, the Company's revenues of $26,996 were provided from the rental of
partial space in its executive premises. Read Part I-Item 2 "Description of
Properties" for further details about this property. Operating expenses for the
year ended September 30, 1998, amounted to $234,803 consisting primarily of
personnel costs, occupancy costs, and other necessary and ordinary general and
administrative expenses.

During fiscal 1999, the Company expects to achieve profitability
through the operations of MBM and other prospective acquisitions in growth
industries.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

The foregoing matters and uncertainties raise substantial doubt about
the Company's ability to continue as a going concern. The Company is currently
negotiating with several alternative financing sources in order to secure
sufficient funding to support its reorganization and restructuring plans. The
Company's survival is also dependent on the success of its efforts to obtain
Debtor-in-Possession financing for its subsidiary. Further, it is unclear at the
present time whether the Company may become part of the Chapter 11 proceedings,
which would require additional Debtor-in-Possession funding for the Company's
reorganization. While the Company believes that it may have the opportunity to
attain the necessary financial support, no assurances can be provided that the
Company will be able to secure sufficient funding in order to complete its plan
of reorganization.

In December 1996, the Company acquired 100 percent of the outstanding
shares of NETTouch Communications, Inc., d/b/a N'Touch, from Telecommunications
Resources, Inc., ("TRI"), of Dallas, Texas. The company paid to the principal
shareholders of NETTouch $2,400,000 and issued a Common Stock Purchase Warrant
to acquire shares of the Company's Common Stock at an exercise price of $7.75
per share. In addition, the Company was obligated to make additional payments to
such shareholders $4,800,000. The Company is currently in default on such
payments. To date, N'Touch has not achieved its projected revenues and, for the
quarter ended June 30, 1997, has a net loss of $1,146,000. Since N'Touch has
been unable to achieve a positive cash flow, and since the Company does not have
the financial resources to continue to invest cash into this subsidiary until it
achieves profitability from its own operations, the Company has ceased
operations at N'Touch and is pursuing the sale or other divestiture of these
assets.

18
<PAGE>

The Company has experienced negative cash flow during the period, and
it is in arrears in several of its financial obligations. The preferred dividend
payments to the former TNT shareholders have not been made. Of this amount, the
balance due at June 30, 1997 has been accrued in the amount of $3,091,000.

On July 1, 1995, the Company executed a Convertible Promissory Note in
the original principal amount of $956,250 (which is included as a liability the
Company's balance sheet) in favor of Christian E. Carlsen, as Trustee under a
Land Trust Agreement dated September 19, 1992 ("Carlsen"). The Carlsen Note
matured on December 31, 1996. On January 6, 1997, the Company received written
Notice of default from Carlsen as to the payment of principal and interest. On
March 7, 1997, the Company and Carlsen agreed to modify the terms of the note.
The Company received a 60-day extension on the note with no additional interest
in exchange for a $250,000 cash payment to Carlsen. At August 14, 1997, the
balance of $706,250 remains unpaid, and Carlsen has filed a Motion for Summary
Judgment .

During fiscal year ended September 30, 1997, the Company has received
net proceeds of approximately $744,800 through issuance of its Series R
Preferred Stock pursuant to Regulation S.

Given the Company's financial constraints, the lack of sufficient
revenue growth, the negative gross margins, and the financial liabilities to
prior investors, there can be no assurances that the Company will be able to
continue as a going concern. The Company is currently utilizing the services of
an outside consultant to assist in the reorganization and restructuring. Several
senior executives have been eliminated. The Company's Board of Directors and the
Board of the TNT subsidiary have been replaced, and a new President and CEO will
be appointed at each level. Remaining executives have been subject to salary and
benefit reductions. The Company is currently negotiating with several financing
sources to support its reorganization and restructuring plans. The survival is
also contingent upon an agreement with a Debtor-in-Possession financier. While
the Company believes that it may have such financial support, no assurances can
be provided that the Company will secure sufficient funding to complete its plan
of reorganization.

On May 30, 1997, the Company, its officers and directors received
subpoenas issued by the Securities and Exchange Commission pursuant to an order
of investigation. The investigation is ongoing, and the Securities and Exchange
Commission has provided no information to the Company regarding the
investigation. Any party interesting in obtaining further information regarding
the investigation can attempt to do so by contacting the Miami, Florida Branch
Office of the Securities and Exchange Commission.

19
<PAGE>

In August 1997, Joseph Lents resigned as Chairman of the Board of the
Company, and the Board of Directors of the Company was thereafter substantially
reconstituted to add Vincent Landis, Carlos Trueba and Les Miller as new members
of the Board with the then existing directors, Arnold Salinas and Loretta
Murphy. Loretta Murphy resigned as a director of the Company during the course
of the Reorganization Case in order to pursue other business interests. During
the Reorganization Case, Luis Alvarez has served as interim President of the
Company. None of the directors of executive officers of the Company has received
any compensation from the Company for service in such capacities for the period
from the Involuntary Petition Date to the date of this quarterly report.

A number of factors ultimately contributed to the Company's decision to
seek Bankruptcy Court protection. As of March 31, 1996, the Company was
experiencing a number of financial problems, including significant losses since
its inception, negative cash flow and arrears in several of its obligations. A
significant portion of these problems resulted from the losses sustained in the
TNT operations. As a result of the foregoing, the Company continued to finance
its expansion and operations with equity and debt financing in 1997. In 1997,
the Company was sued in various jurisdictions as a result of these equity
offerings. In July 1997, TNT was forced to seek protection under Chapter 11 of
the Bankruptcy Code. In September 1997, TNT's Chapter 11 case was converted to a
case under Chapter 7 of the Bankruptcy Code, thus leaving the Company with
little hope of recouping its substantial investment in TNT. On December 1, 1997,
three petitioning alleged creditors, Francesco Morello, Christopher Robichaux
and David J. Latraverse, filed an involuntary petition under Chapter 7 of the
Bankruptcy Code against the Company. On December 19, 1997, Advantage instituted
the Advantage Suit against certain former officers and directors of the Company.
Had it not been for the filing of the involuntary petition and the automatic
stay provisions of Section 362 of the Bankruptcy Code, Advantage would have also
named the Company as a defendant in the Advantage Suit. The combined effect of
these events led the Company to conclude that it was without any viable
procedure for handling these and other concerns outside of a reorganization
proceeding under Chapter 11 of the Bankruptcy Code. Accordingly, on December 24,
1997, the Company consented to the entry of an order for relief under Chapter 11
of the Bankruptcy Code.

The Company has filed with the United States Bankruptcy Court for the
Southern District of Florida (the "Bankruptcy Court") its Amended Plan of
Reorganization dated July 2, 1998. The Company's Amended Disclosure Statement
dated July 2, 1998 (the "Disclosure Statement") and its Summary of Amended
Disclosure Statement of Whitehall Enterprises, Inc. formerly known as Total
World Telecommunications, Inc. under Chapter 11 of the United States Bankruptcy
Code for Certain General Unsecured Creditors and Holders of Existing Common
Stock dated July 2, 1998 (the "Summary Disclosure Statement") are submitted
pursuant to Section 1125 of the Bankruptcy Code 11 U.S.C. Section 101, et. seq.
(the "Bankruptcy Code") in connection with the solicitation of votes on the Plan
from Holders of Impaired Claims against and Impaired Equity Interests in the
Debtor and the hearing on Confirmation of the Plan schedule for August 17, 1998.

20
<PAGE>

At a hearing on June 19, 1998, this Disclosure Statement was approved
by the Bankruptcy Court in accordance with Section 1125(b) of the Bankruptcy
Code as containing information of a kind and in sufficient detail adequate to
enable a hypothetical reasonable investor typical of holders of Claims and
Equity Interests of the relevant Voting Classes to make an informed judgment
whether to accept or reject the Plan. Approval of this Disclosure Statement by
the Bankruptcy Court and the transmittal of this Disclosure Statement does not,
however, constitute a determination by the Bankruptcy Court as to the fairness
or merits of the Plan and should not be interpreted as being a recommendation by
the Bankruptcy Court either to accept or reject the Plan.

In summary, the Plan is based upon (a) a transfer of all Unsecured
Claims and assets of the Company (excluding certain tax attributes and a portion
of the Condominium Parcel Net Proceeds) to a liquidating trust of which Holders
of Allowed Unsecured Claims will be the primary beneficiaries and Holders of
Allowed Subordinated Claims will be secondary beneficiaries, (b) the purchase by
the Company of all of the issued and outstanding stock of Mega Blow Moulding
Limited, a Canadian plastics company ("MB"), from 1299004 Ontario Corporation
("129 Ontario"), a wholly-owned subsidiary of 1274328 Ontario Inc. (the
"Proponent"), in consideration for the issuance to the Proponent of
approximately 76% voting control of the Reorganized Debtor and the cash sum of
$75,000, (c) the cancellation of all Existing Preferred Stock and Existing
Common Stock of the Debtor, and (d) the issuance of common stock of the
Reorganized Debtor to Holders of Existing Preferred Stock and Existing Common
Stock of the Debtor.

21
<PAGE>

level of stability with the Company for that period of time necessary for a new
investor to fund ongoing and future operations for the Company. The new Board
hoped to structure a transaction with a new investor which would satisfy
existing Creditor Claims and preserve some value for existing stockholders of
the Company. In examining all of its alternatives, the new Board concluded
shortly after its appointment that the Company had no resources (financial or
otherwise) to defend against any claims or actions which had been or could be
asserted by Advantage. In addition, the filing of the involuntary petition
against the Company on December 1, 1997 left the Company with no option but to
seek to successfully reorganize under Chapter 11 of the Bankruptcy Code. In
order to do so, the Company needed the support of Advantage, which, as stated
above, holds in excess of 90% of the Unsecured Claims against the Company.

Notwithstanding the uncertain distribution to Unsecured Creditors and
the reduced equity interest for stockholders, the Company believes that the Plan
is in the best interest of all Unsecured Creditors and Holders of Equity
Interests for a number of reasons. First, no free and clear assets of
significant value exist which are available for immediate liquidation and
distribution to Unsecured Creditors and Holders of Equity Interests. Second, TNT
the Company's chief operating subsidiary prior to the Involuntary Petition Date,
is presently in a Chapter 7 bankruptcy proceeding in Texas, and the Company will
in all likelihood receive nothing in return for its substantial investment in
TNT. Third, the costs of administering the Estate continue to accrue as long as
the Reorganization Case remains pending, further eroding whatever value there is
available for Unsecured Creditors. Fourth, Advantage, which holds in excess of
90% of the total dollar amount of Unsecured Claims, supports the Plan and has
already expended significant funds in investigating Causes of Action, the
proceeds of which will be available for distribution to all Unsecured Creditors
on a pro rata basis. Indeed, absent confirmation of the Plan, the Company would
itself have to consider an orderly liquidation of assets in Chapter 11 or a
conversion to Chapter 7, either of which would yield far less of the total
number of shares of Reorganized Debtor Common Stock issued and outstanding
immediately after the Effective Date.

22
<PAGE>

does not appear that there are sufficient funds to pay Unsecured Creditors in
full and (b) the percentage of the outstanding equity to be retained by Holders
of Equity Interests following the Effective Date will be substantially diluted.
In the event of a liquidation of the Company's assets under Chapter 7 of the
Bankruptcy Code, the Company believes the distribution to Unsecured Creditors
would be substantially less than under the Plan. In addition, absent concessions
from holders of Unsecured Claims, there would be no distribution to Holders of
Equity Interests. Should the Plan not be confirmed, the Company will have to
seriously consider a Chapter 7 liquidation. For these reasons, the Company urges
that the Plan be accepted.

ITEM 7. FINANCIAL STATEMENTS
--------------------

The financial statements and supplementary data are included under Item
13(a)(1) and (2) of this Report.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

The Company changed its certified public accountant form Millward &
Co., CPA's of Fort Lauderdale, Florida to Thomas E. Sewell, CPA, PA of Pembroke
Pines, Florida. The Board of Directors authorized this change in October ,1998.
The Company has authorized Millward & Co., CPA's to respond fully to any
inquiries of Thomas E. Sewell, CPA, PA.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
-------------------------------------------------------------
COMPLIANCE UNDER SECTION 16(a) OF THE EXCHANGE ACT
--------------------------------------------------

The following table sets forth the names, ages and positions with the
Company of the executive officers and directors of the Company. Directors will
be elected at the Company's annual meeting of stockholders and serve for one
year or until their successors are elected and qualify. Officers are elected by
the Board and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board.

23
<PAGE>

Name Position Age
---- -------- ---

Luis Alvarez President and Director 39

Joseph Lebovics Director 44

Carlos M. Trueba Director 44

Vince Landis Director 52

Les Miller Director 56

The business backgrounds of the individuals referred to above are as follows:

Luis Alvarez, the current president of the Company is also Chief Executive
Officer and President of Sentrex Financial Consulting Services, Inc., a position
he has held for the past four years. Prior to that, Mr. Alvarez was President
and CEO of Knight Corporation (1991-1995) and President and CEO of Sentrex
Security Systems, Inc. (1985-1991). Mr. Alvarez also spent four years serving
the community as a police officer with the City of Miami (1981-1985).

Joseph Lebovics graduated from the University of Toronto with a degree in
accounting. Mr. Lebovics is presently a chartered accountant with the accounting
firm of Lebovics and Good, and has practiced public accounting in Toronto,
Canada since 1976. Mr. Lebovics is also an investor, through various holding
companies, in real estate and corporate securities (public and private), with a
market value of approximately $7.5 million (Canadian Dollars)

Carlos M. Trueba is a certified public accountant with over 20 years of
experience practicing his profession in South Florida. He graduated from Florida
International University with a degree in business administration with majors in
accounting and finance. Mr. Trueba is currently Vice President and director of
the audit practice of the Accounting firm of Rodriguez, Trueba & Company CPA's
P.A.

Vince Landis has been employed with the City of Miami Police Department for the
past 31 years and has served in every organizational department therein. Mr.
Landis is currently a Captain of Police in the City of Miami Police Department.
Mr. Landis has also served in the City of Miami Civil Service Board.

Leslie Miller graduated from temple University with a major in business
administration. Mr. Miller has 35 years of experience in the lumber industry,
and for over a decade has been President of L. Miller Forest Products, Inc.

24
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
----------------------

CASH COMPENSATION
- -----------------

Total cash compensation paid to all executive officers as a group for
services provided to the Company in all capacities during the year ended
September 30, 1996 aggregated to $381,000. Set forth below is a summary
compensation table in the tabular format specified in the applicable rules of
the Securities and Exchange Commission. As indicated, no officer of the Company
or any of its subsidiaries, except for Joseph L. Lents received total salary and
bonus which exceeded $100,000 during the periods reflected.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------

Other All
Name and Annual Restricted Other
Principal Compen- Stock Options/ LTIP Compen-
Position Period Salary Bonus sation* Award(s) SARs(#) Payouts sation
-------- ------ ------ ----- ------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph Lents, 1996 $277,500 $ -0- $ 2,350 - 133,334 - $ -0-
Chairman 1995 250,000 5,000 2,350 - - - -0-
and CEO 1994 50,000 -0- 2,350 - 500,000 - -0-
</TABLE>
____________
*Personal use of Company vehicles.

There was no cash compensation paid to the newly elected directors and
executive officers as a group for services provided to the Company in all
capacities during the remainder of the year ended September 30, 1997 and the
year ended September 30, 1998.

EMPLOYMENT AGREEMENTS
- ---------------------

There were no employment agreements in effect with the newly elected
directors and executive officers during the remainder of the year ended
September 30, 1997 and the year ended September 30, 1998.

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------

The following table sets forth Common Stock ownership as of December
31, 1998 with respect to (i) each person known to the Company to be the
beneficial owner of five (5%) percent or more of the Company's outstanding
Common Stock, (ii) each director of the Company and (iii) all executive officers
and directors of the Company as a group. This information as to beneficial
ownership was furnished to the Company by or on behalf of the persons named.
Unless otherwise indicated, the business address of each person listed is 801
Brickell Avenue, 9th Floor, Miami, Florida, 33131. Information with respect to
the percent of class is based on 124,927,647 shares of the Company's Common
Stock issued and outstanding at December 31, 1998.

Shares
Beneficially Percent
Name Owned (1) of Class
---- ------------ --------
Luis Alvarez (2) 0 0
Joseph Lebovics (3) 0 0
Carlos M. Trueba (4) 0 0
Vince Landis (5) 0 0
Les Miller (6) 0 0
1274328 Ontario Inc. (7) - -
All executive officers and
Directors as a group
(5 persons) 0 0

(1) Except as otherwise indicated in the footnotes below, each stockholder has
sole power to vote and dispose of all the shares of common stock listed
opposite his name.

(2) Mr. Alvarez is Chairman of the Board and President of the Company and he
owns no shares of the Company's common stock as of the date of this report.

(3) Mr. Lebovics is a director of the Company and he owns no shares of common
stock as of the date of this report. Mr. Lebovics is a director of 129
Ontario, (See (7) below), however, he does not own any shares, directly or
indirectly, in 129 Ontario as of the date of this report.

26
<PAGE>

(4) Carlos M. Trueba is a director of the Company and he owns no shares of
common stock as of the date of this report.

(5) Vince Landis is a director of the Company and he owns no shares of common
stock as of the date of this report.

(6) Les Miller is a director of the Company and he owns no shares of common
stock as of the date of this report.

(7) In connection with the acquisition of MBM, the Company issued 4,000,000
shares of its Series 1, $1 Convertible Preferred Stock (the "Series 1
Preferred Stock") to 129 Ontario. Each of the shares of Series 1 Preferred
Stock is convertible into 100 shares of Common Stock over various periods
based on the underlying Common Stock reaching price levels ranging from
$10.00 to $50.00 per share. However, no shares of Series 1 Preferred Stock
may be converted into Common Stock before January 1, 2004. Each share of
Series 1 Preferred Stock has 100 notes or a total of 4,000,000 notes.
1274328 Ontario Inc. is beneficially owned by Leslie Gerendasi.

The Company intends to compensate the directors referred to above with
approximately 300,000 shares of the Company's Common Stock. As of the date of
this report, no shares have been issued to these directors.

The prior entities considered in this item as of September 30, 1996,
have zero shares beneficially owned as of September 30, 1997.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------

TRANSACTIONS WITH MANAGEMENT AND OTHERS
- ---------------------------------------

During fiscal 1996, RESN acquired 29.63 acres of undeveloped land in
Melbourne, Florida. Currently, the property is zoned for commercial use. The
property was acquired from a stockholder who had previously purchased the
property from Mr. D.E. Loveridge, Trustee. Mr. D.E. Loveridge is the father of
Messrs. John and C. Denning Loveridge, directors of the Company. The purchase
price of $2,700,000 was paid by the issuance of 294,932 shares of the Company's
Common Stock and the assumption of a $707,450 note payable to the Florida
Conference of the Seventh Day Adventists. The note provides for payment of
interest only at 9 3/4% and matures at April 2001. Through a joint venture, RESN
plans to develop the land for commercial use and eventual sale. A current
appraisal values the land at between $2,600,000 and $3,000,000.

27
<PAGE>

On June 12, 1996, the Company consummated an Agreement and Plan of
Reorganization dated May 28, 1996 for the acquisition of all of the outstanding
capital stock of Total National Telecommun-ications, Inc. (d/b/a Whitehall
Enterprises, Inc. formerly known as Total World Telecom). Pursuant to the terms
of the stock exchange, the shareholders of TWT received shares of newly created
Series M and Series N preferred stock of the Company which are convertible into
1,983,333 shares of Common Stock of the Company. The Series M and Series N
Preferred Stock, established pursuant to the exchange, carry a cumulative
dividend of 2.7% per month of the stated value of the preferred stock which the
Company is required to pay until such time as the Company's Registration
Statement (after which the former TWT shareholders have agreed not to sell more
than 5% of their shares per month) relating to resale of certain of the shares
of Common Stock underlying the Series of Preferred Stock is registered under the
Securities Act of 1933. At the time the Agreement and Plan of Reorganization was
consummated on June 12, 1996, the Company advanced $5,000,000 for the working
capital needs of TWT. In addition the Company issued 35,000 shares of Series O
Preferred Stock for employee compensation for past service costs which are
convertible into 233,333 shares of Common Stock of the Company. The Company also
issued 267,501 Series P Preferred Stock representing shares issued in connection
with future services. These shares are convertible into Common Stock of the
Company and have been recorded at the appraised market value of common shares.
Certain consultants received 250,000 shares of Series Q Preferred Stock which
are convertible into 1,111,109 shares of Common Stock of the Company. Such
shares have been valued at the appraised value and have been charged to the cost
of the acquisition. The Series O, Series P and Series Q Preferred Stock have no
registration rights.

In connection with the acquisition, Donald Booth and members of his
family received 55,400 shares of Series N Preferred Stock which were
subsequently converted into 443,333 shares of Common Stock. In addition, Mr.
Booth received 167,499 shares of Series P Preferred Stock which were
subsequently converted into 744,444 shares of Common Stock. Mr. Arnold Salinas,
a consultant of TWT at the time of the acquisition, received 20,000 shares of
Series Q Preferred Stock which were subsequently converted into 88,889 shares of
Common Stock. Mr. Salinas subsequently was employed as an executive officer of
TWT and a Director of the Company. Mr. Ronald Berry received 3,500 shares of
Series O Preferred Stock which are convertible into 23,333 shares of Common
Stock and do not carry a dividend.

28
<PAGE>

During the 12-month period ended September 30, 1996, the Company paid
commissions of $32,808 to Heartline, Inc. which is owned by Mr. Paul Booth, the
father of Mr. Donald Booth. Heartline, Inc. is the billing and collection agency
for all amounts billed through Southwestern Bell. Heartline, Inc. is not related
to Heartline Communications, Inc. from which the Company acquired certain assets
in January 1995.

Periodically, Mr. Joseph Lents has advanced funds to the Company for
working capital and other purposes. At September 30, 1995, the Company owed to
Mr. Lents on account of such advances $467,940. During the fiscal year, Mr.
Lents made further advances of $139,798 and had accrued interest and accrued
compensation of $81,276. During the 1996 fiscal year, the Company made payments
to Mr. Lents of $669,014 with the resulting balance due to Mr. Lents at year end
September 30, 1996 of $20,000. At December 31, 1996, such balance was $14,029.

* * *

There were no transactions with management and others after the new
directors mentioned before assumed control of the Board. See discussion in Part
I - Item 6 relative to the agreement with 129 Ontario for the purchase of the
stock of MBM.

<PAGE>

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
--------------------------------------

(a)(1) and (2) Financial Statements and Schedules
----------------------------------

The financial statements listed on the index to financial statements on
page F-1 are filed as part of this Form 10-KSB.

(b) Reports on Form 8-K
-------------------

The Company filed Form 8-K reports dated December 21, 1995 (item 2 and
item 5), February 21, 1996 (item 5), May 28, 1996 (item 5), June 11, 1996 (item
5), October 29, 1996 (item 1 and item 5) and November 8, 1996 (item 5) and
February 10, 1999.

3.01 Articles of Incorporation 1
3.01(a) Certificate of Amendment to Certificate of Incorporation 5
3.01(b) Certificate of Amendment to Certificate of Incorporation 7
3.01(c) Certificate of Amendment to Certificate of Incorporation 24
3.02 By-Laws 5
4.01 Specimen of Common Stock certificate 1
10.02 Warrant Agent Agreement 1
10.03 Line of Credit Agreement 1
10.04 Stock Purchase Agreement between Texas American Group, Inc. and
Daniel M. Boyar 2
10.05 Stock Purchase Agreement for acquisition of Financial Standards
Group, Inc. 2
10.06 Stock Purchase Agreements for acquisition of Mount Vernon
Distribution, Inc. and Eau Gallie Properties, Inc. 2
10.06.1 Amendments to Stock Purchase Agreements referred to in Exhibit
10.067
10.07 Stock Purchase Agreement for acquisition of Bibbins & Rice
Electronics, Inc. and Rice Electronics, Inc. 3
10.08 Investment Banking Consulting Agreement with H.D. Vest
Investment Securities, Inc. 7
10.09 Sales and Service Agreement with Corroon & Black Administrative
Services, Inc. 7
30
<PAGE>
10.10 Agreement with Arkansas Credit Union League and Service
Corporation 7
10.11 Agreement with HCU Services Corporation (Hawaii) 7
10.12 Agreement with KYCUL Services Incorporated (Kentucky) 7
10.13 Agreement with League Services Corporation (Michigan) 7
10.14 Selling Agent Agreement with Meridian Associates, Inc. 7
10.15 Financial Consulting Agreement with Meridian Associates, Inc. 7
10.16 Lock-Up Agreement with Selling Security Holders 7
10.17 Rescission Offer Responses 7
10.18 Agreement with Computer Concepts Corp. 8
10.19 Agreement with Greg Paige and Paige & Associates Corp. 9
10.20 Agreements with Computer Concepts Corp. 13
10.21 Agreement with Comstator, S. A. 13
10.22 Agreement with Allan J. Ontai 10
10.23 Letter of Agreement with Servicecorp (Indiana Credit Union
League) 13
10.24 Agreement and Plan of Merger with Membership Realty Ltd., Inc.
and other parties described therein 10
10.25 Agreement with Stenton Leigh Capital Corp. 10
10.26 Agreement with Universal Solutions, Inc., Investor Resource
Services, Inc. and SMI Capital Corp. 12
10.27 Amendment No. 1 to Agreement and Plan of Merger with Membership
Realty Ltd., Inc. 14
10.28 Agreement with Computer Concepts Corp. 15
10.29 Agreement and Plan of Merger with Elfworks, Inc. 16
10.30 Stock Purchase Agreement and Assignments with Administracion de
Seguros, S.A. 17
10.31 Letter of Intent to Purchase and Sell between Jalmark Realty,
Inc. and Membership Realty Holding Corp. 19
10.32 Amendment No. 4 To Agreement and Plan of Merger with Membership
Realty Ltd., Inc. 20
10.33 Agreement with JRL Acquisition, Inc. 20
10.34 Financial Advisory and Consulting Agreement with Coleman and
Company 20
10.35 Stock Purchase and Exchange Agreement with American Indemnity
Company Limited 21
10.36 Stock Purchase Agreement with U.S. Mortgage Network Corp. 22
10.37 Stock Purchase Agreement with Maraval & Associates 22
10.38 Stock Purchase and Exchange Agreement with American Indemnity
Company Limited and Global RE., Ltd. 23
10.39 Agreement wit Real Estate Services Network Holding Corp., U.S.
Mortgage Network Corp., Intervest, Inc. and Sidney A. Lewis 24

31
<PAGE>

10.40 Agreement with Total National Telecommunications, Inc. 25
10.41 Agreement with Global RE., Ltd. and American Indemnity Company,
Ltd. 26
10.42 Stock Purchase Agreement with Southwestern Telecom, Inc. 27
10.43 Stock Purchase Agreement for the purchase of NETTouch
Communications, Inc. and Common Stock Purchase Warrant 28
10.44 Note Purchase Agreement with GFL Advantage Fund Limited,
Registration Rights Agreement and Promissory Note 28
16.01 Letter from Samson, Robbins & Associates to the Securities and
Exchange Commission 4
16.02 Letter from Grau & Registrant to the Securities and Exchange
Commission 6
16.03 Letter from Arthur Andersen & Co. to the Securities and
Exchange Commission 11
16.04 Letter from Grant Thornton to the Securities and Exchange
Commission 18
______________
1 Incorporated by reference from the Registrant's Registration Statement, as
amended, on Form S-18 filed with the Securities and Exchange Commission on
January 27, 1989 and declared effective on February 28, 1989.
2 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated January 11, 1991.
3 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated March 4, 1991.
4 Incorporated by reference to the Registrant's report on Form 8 filed with the
Securities and Exchange Commission dated February 27, 1991.
5 Incorporated by reference to the Registrant's report on Form 10-K filed with
the Securities and Exchange Commission dated April 30, 1991.
6 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated February 6, 1992.
7 Incorporated by reference to the Registrant's Registration Statement, as
amended, on Form S-1 filed with the Securities and Exchange Commission on May
14, 1992 and declared effective on November 12, 1992.
8 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated January 15, 1993.
9 Incorporated by reference to the Registrant's report on Form 10-K filed with
the Securities and Exchange Commission dated May 5, 1993.
10 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated April 8, 1994.
11 Incorporated by reference to the Registrant's report on Form 8-K/A filed with
the Securities and Exchange Commission dated January 17, 1994.

<PAGE>
12 Incorporated by reference to the Registrant's Registration Statement on Form
S-8 filed with the Securities and Exchange Commission on March 23, 1994.
13 Incorporated by reference to the Registrant's report on Form 10-KSB filed
with the Securities and Exchange Commission dated December 31, 1993.
14 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated April 21, 1994.
15 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated May 31, 1994.
16 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated July 19, 1994.
17 Incorporated by reference to the Registrant's report on Form 10-QSB filed
with the Securities and Exchange Commission dated September 20, 1994.
18 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated September 12, 1994.
19 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated March 1, 1995.
20 Incorporated by reference to the Registrant's report on Form 10-QSB filed
with the Securities and Exchange Commission dated August 17, 1995.
21 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated December 21, 1995.
22 Incorporated by reference to the Registrant's report on Form 10-KSB filed
with the Securities and Exchange Commission dated September 30, 1995.
23 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated December 21, 1995.
24 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated February 21, 1996.
24 Incorporated by reference to the Registrant's report on Form 10-QSB filed
with the Securities and Exchange Commission dated March 31, 1996.
25 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated May 28, 1996.
26 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated June 11, 1996.
27 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated October 29, 1996.
28 Incorporated by reference to the Registrant's report on Form 8-K filed with
the Securities and Exchange Commission dated November 8, 1996.

33
<PAGE>
SIGNATURE
---------

In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized on this day of , 1998.

WHITEHALL ENTERPRISES, INC.

By:_______________________________
President

In accordance with the Exchange, this Report has been signed below by
the following person on behalf of the Registrant, and in the capacities and on
the date indicated.

Signature
---------

______________________ President and Director __ , 1999
Luis Alvarez

______________________ Director __ , 1999
Joseph Lebovics

______________________ Director __ , 1999
Vincent Landis

______________________ Director __ , 1999
Carlos M. Trueba

______________________ Director __ , 1999
Les Miller

<PAGE>

WHITEHALL ENTERPRISES, INC.
FORMERLY
TOTAL WORLD TELECOMMUNICATIONS, INC.
Consolidated Financial Statements
(unaudited)
For the Year Ended September 30, 1997

Table of Contents
-----------------

Page No.
--------

Consolidated Balance Sheet F-1

Consolidated Statement of Operations F-2

Consolidated Statement of Changes in Stockholders' Equity F-3

Consolidated Statement of Cash Flows F-4

Notes to Consolidated Financial Statements F-5

<PAGE>
WHITEHALL ENTERPRISES, INC.
FORMERLY TOTAL WORLD TELECOMMUNICATIONS, INC.
Consolidated Balance Sheet
(unaudited)
September 30, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Cash $44,559

Property and Equipment 847,952
Less Accumulated Depreciation 151,893
--------------------
Property and Equipment - Net 696,059

Other Assets
Deposits 4,450
--------------------

TOTAL ASSETS $745,068
====================
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable $89,354
Mortgage payable and other current liabilities 436,305
Liabilities to be forgiven under Chapter XI
bankruptcy reorganization 30,135,217
--------------------

Total Current Liabilities 30,660,876
--------------------
Shareholders' Equity
Preferred stock, $.00001 par value,
10,000,000 million shares authorized,
377,699 shares issued and outstanding 4
Common Stock, $ .00001 par value,
100,000,000 shares authorized, 81,118,900
shares issued and outstanding 811
Additional Paid In Capital 82,474,223
Unearned compensation (4,927,394)
Accumulated deficit before quasi-reorganization (106,723,452)
Treasury Stock at Cost (740,000)
--------------------

Total Stockholders' Equity (Deficiency) (29,915,808)
--------------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $745,068
====================
</TABLE>
See Notes to Financial Statements.
F-1

<PAGE>
WHITEHALL ENTERPRISES, INC.
FORMERLY TOTAL WORLD TELECOMMUNICATIONS, INC.
Consolidated Statement of Operations
(unaudited)
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Revenues from Operations $41,034,609

Cost of Sales 47,139,547
--------------------

Gross Profit (6,104,938)
--------------------

Operating Expenses

Sales, general and administration 25,885,048
Depreciation and amortization 1,551,631
--------------------

Total Operating Expenses 27,436,679
--------------------

Net Loss from Operations (33,541,617)

Other Income (Expense)

Interest income 51,488
Interest expense (7,266,885)
Loss on investment of TNT (34,678,333)
Loss on note receivable uncollected in TNT (25,210,002)
Provision for doubtful accounts (8,775,445)
Other Income 1,423
Loss on writedown of goodwill in subsidiary (83,246)
--------------------

Total Other Income (Expense) (75,961,000)
--------------------

Loss from Continuing Operations (109,502,617)

Discontinued Operations:

Gain from forgiveness of debt in Chapter
VII proceedings 28,862,077
Loss on disposal of real estate (7,144,423)
--------------------

Gain from Discontinued Operations 21,717,654
--------------------

Net Loss ($87,784,963)
====================

Loss per common share

Loss from continuing operations ($1.35)
Gain from discontinued operations 0.27
--------------------

Net Loss per Common Share ($1.08)
====================

Number of Shares Used in Computation 81,118,900
====================
</TABLE>
See Notes to Financial Statements.
F-2

<PAGE>

TOTAL WORLD TELECOMMUNICATIONS, INC.
Consolidated Statement of Changes in Stockholders' Equity
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Preferred Stock Common Stock Paid in Unearned Treasury Stock
Shares Shares Shares Amount Capital Compensation Shares Amount
------ ------ ------ ------ ------- ------------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance per 10-KSB
September 30, 1996 1,216,300 $12 6,635,525 $66 $74,973,115 ($5,203,695) (55,933) ($740,000)

Adjustment to unconsolidate (136)
-------------------------------------------------------------------------------------------------

Balance of parent at
September 30, 1996 1,216,300 12 6,635,525 66 74,972,979 (5,203,695) (55,933) (740,000)

Redemption of preferred and
common stock (838,601) (8) 74,483,375 745 (26,419,312)

Issuance of convertible
preferred stock 38,841,188

Dividends paid (4,920,632)

Amortization of unearned
compensation 276,301

Net Loss from Operations

-------------------------------------------------------------------------------------------------
Balance September 30, 1997 377,699 $4 81,118,900 $811 $82,474,223 ($4,927,394) (55,933) ($740,000)
=================================================================================================

(TABLE CONTINUED)
Accumulated
Deficit Total
------- -----
<C> <C>
Balance per 10-KSB
September 30, 1996 ($30,221,374) $38,808,124
Adjustment to unconsolidate 11,282,885 11,282,749
-------------------------------------

Balance of parent at
September 30, 1996 (18,938,489) 50,090,873

Redemption of preferred and common stock (26,418,575)

Issuance of convertible preferred stock 38,841,188

Dividends paid (4,920,632)

Amortization of unearned compensation 276,301

Net Loss from Operations (87,784,963) (87,784,963)

-------------------------------------
Balance September 30, 1997 ($106,723,452) ($29,915,808)
=====================================

</TABLE>
See Notes to Financial Statements.
F-3

<PAGE>
WHITEHALL ENTERPRISES, INC.
FORMERLY TOTAL WORLD TELECOMMUNICATIONS, INC.
Consolidated Statement of Cash Flows
(unaudited)
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Cash Flows from Operating Activities:

Net Loss from Continuing Operations ($109,502,617)

Adjustments to Reconcile Net Loss to Cash
Used in Operating Activities:
Depreciation 1,551,631
Amortization of intangible assets 3,185,343
Writedown of goodwill of subsidiary 34,678,333
Amortization of deferred compensation 4,374,817
Forgiveness of subsidiary debt 25,967,796
Credit arising from disputed transaction (1,500,000)
Interest of debt for payment of interest on debentures 4,209,260
(Increase) decrease in accounts receivable 387,280
Increase (decrease) in mortgages held for sale 7,442,385
(Increase) decrease in advances to employees
and stockholders 473,647
(Increase) decrease in prepaid expenses and
other current assets 12,493,671
(Increase) decrease in other assets 998,921
Deferred revenue (4,118,138)
Increase (decrease) in accounts payable
and accrued expenses (12,379,293)
--------------------

Total adjustments 77,765,653
--------------------

Net cash provided (used) by operating activities (31,736,964)
--------------------

Cash Flows from Investing Activities:

Income from discontinued operations 21,717,654
--------------------

Net cash provided (used) by investing activities 21,717,654
--------------------

Cash Flows from Financing Activities:

Redemption of preferred stock and common stock (26,419,312)
Proceeds from notes payable and long term debt - net 858,605
Net proceeds from issuance of convertible
preferred stock 38,841,188
Stock dividends paid (4,920,632)
--------------------

Net cash provided (used) by financing activities 8,359,849
--------------------

Net increase (decrease) in cash and cash equivalents (1,659,461)

Cash and cash equivalents, October 1, 1996 1,704,020
--------------------

Cash and cash equivalents, September 30, 1997 $44,559
====================
</TABLE>
See Notes to Financial Statements
F-4
<PAGE>
WHITEHALL ENTERPRISES, INC.
FORMERLY
TOTAL WORLD TELECOMMUNICATIONS, INC.
Notes to Consolidated Financial Statements (unaudited)
September 30, 1997

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
- ---------------------
Whitehall Enterprises, Inc. ("the Company"), formerly Total World
Telecommunications, Inc., formerly International Standards Group, Limited, was
incorporated under the laws of the State of Delaware on October 12, 1988.

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, Total National Telecommunications, Inc.
("TNT") from the date of its acquisition, June 12, 1996.
Intercompany accounts and transactions have been eliminated in consolidation.

The initial objective of the Company was the establishment of accounting
services to assist credit unions and their supervisory committees in performing
comprehensive internal or regulatory compliance audits in satisfaction of their
statutory requirements. The Company also offered various other auditing,
accounting and managerial advisory services to the credit union industry but
does not perform audits of financial statements.

On April 21, 1994, the Company acquired all of the outstanding stock of
Membership Realty Limited, Inc. and subsequently formed Real Estate Services
Network Holding Corp (RESN). RESN is primarily engaged as a full service
commercial and residential real-estate brokerage firm that also provides
mortgage origination and title services.

In June, 1996, the Company acquired Houston based Total National
Telecommunications, Inc. (renamed Total World Telecom, Inc.) a Tier 2
switch-based inter exchange carrier that utilized digital and fiber optic
facilities, with switches located in five major United States cities.

On October 11, 1995, the Company's Board of Directors approved an amendment to
the certificate of incorporation of the Company to permit the Company to issue
up to 100,000,000 shares of common stock, $.00001 par value, and 10,000,000
shares of preferred stock, $.00001 par value, of the Company in order to permit
holders of various series of preferred stock and warrants and options to convert
their preferred stock or exercise their warrants and options for shares of
common stock of the Company.

On October 15, 1996, the Company effected a one-for-fifteen reverse stock split
of its outstanding common stock. All transactions described herein, and all
references to outstanding common stock of the Company or rights to acquire
common stock give effect to such reverse stock split unless otherwise indicated.

F-5
<PAGE>

WHITEHALL ENTERPRISES, INC.
FORMERLY
TOTAL WORLD TELECOMMUNICATIONS, INC.
Notes to Consolidated Financial Statements (unaudited)
September 30, 1997

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Chapter XI Bankruptcy
- ---------------------
On December 24, 1997, the Company filed for protection under Chapter XI of the
Federal Bankruptcy laws. Chapter XI encompasses the submission, by the court
appointed trustees, to the Court of a plan of reorganization. On August 28,
1997, the Court approved the plan of reorganization.

Pursuant to this plan, all preferred and common stock previously issued was
canceled. In place of these canceled shares, 124,927,647 shares of common stock,
par value $.0001, were issued.

Another 4,000,000 shares will be issued under a stock purchase agreement between
the Company and 1299004 Ontario Corporation. In exchange for these shares, the
Company will acquire 100% of the outstanding common stock of MegaBlow Moulding,
Ltd., a Canadian Corporation.

Chapter VII Bankruptcy of Subsidiary
- ------------------------------------
On July 1997 TNT, the Company's wholly-owned operating subsidiary, filed a
petition for relief under Chapter XI of federal bankruptcy laws. During
September 1997, the case was converted to Chapter VII and a trustee was
appointed. During September 1997 the assets of TWT were sold. All investments,
amounts receivable and intangible assets have been written off.

Capital Transactions
- --------------------
During fiscal year 1997, 838,601 shares of preferred stock were exchanged for
74,483,735 shares of common stock. As part of the exchange, the Company paid to
preferred shareholders $26,420,049.

During 1997, the Company filed a Regulation S private placement and raised
$38,841,188, which was recorded as paid in capital. No additional shares of
stock were issued.

Accounting Estimates
- --------------------
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

F-6
<PAGE>

WHITEHALL ENTERPRISES, INC.
FORMERLY
TOTAL WORLD TELECOMMUNICATIONS, INC.
Notes to Consolidated Financial Statements (unaudited)
September 30, 1997

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents
- -------------------------
The Company considers all highly liquid debt instrument purchased with an
original maturity of three months or less to be cash equivalents.

Income Taxes
- ------------
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 109 Accounting for Income Taxes, which requires
companies to use the asset and liability method of accounting for income taxes.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of temporary differences by applying enacted statutory tax
rates applicable to future years to differences between the consolidated
financial statement carrying amounts and the tax basis of existing assets and
liabilities. Pursuant to SFAS No. 109, the effect on deferred taxes of a change
in tax rates is recognized in income in the period that includes the enactment
date. Under the deferred method, deferred taxes were recognized using the tax
rate applicable to the year of the calculation and were not adjusted for
subsequent changes in tax rates. The Company adopted SFAS No. 109 in 1993.

Concentration of Credit Risk
- ----------------------------
Financial instruments that potentially subject the Company to concentrations of
credit risk are primarily cash and accounts receivable. The Company extends
credit based on an evaluation of the customer's financial condition, generally
(except for mortgages receivable) without requiring collateral.

Exposure to losses on receivables is principally dependent on each customer's
financial condition. The Company monitors its exposure for credit losses and
maintains allowances for anticipated losses. In addition, at September 30, 1997,
the Company had $22,695 on deposit with one financial institution, which was
insured for up to $100,000 by the U.S. Federal Deposit Insurance Corporation.
The Company believes it is not exposed to any significant credit risk on cash
and cash equivalents.

Net Loss per Common Share
- -------------------------
Net loss per common share is calculated by dividing the net loss by the weighted
average number of common shares outstanding.

F-7
<PAGE>

WHITEHALL ENTERPRISES, INC.
FORMERLY
TOTAL WORLD TELECOMMUNICATIONS, INC.
Notes to Consolidated Financial Statements (unaudited)
September 30, 1997

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going Concern Consideration
- ---------------------------
Since inception, the Company has incurred substantial losses and, as of
September 30, 1997 and 1996, has an accumulated deficit of $106,723,452 and a
working capital deficiency of $30,616,317, respectively. The Company commenced
revenue producing operation in October 1991. A significant amount of the
Company's officers' and directors' time has been spent in various financing
activities including, but not limited to raising private placement funds and
seeking new acquisitions.

The Company plans to purchase a Canadian Company in 1999, which the Company
anticipates will increase profitability. Management believes that the
acquisition, along with other future acquisitions and other activities, coupled
with cost cutting and revenue raising programs, should result in significant
improvement in the future.

There can be no assurance that funding will be completed, if the newly acquired
entities will be profitable, the cost cutting and revenue raising programs will
be effective, all of which are necessary to meet the Company's obligations over
the next year. During 1997-98 the Company went through a Chapter XI
Reorganization.

NOTE 2 PROPERTY, PLANT AND EQUIPMENT

Property, machinery, and equipment are stated at cost, and are depreciated over
their estimated useful lives on a straight-line basis as follows:

Useful Life
-----------
Furniture and fixtures 3-5 years
(including software)
Machinery and equipment 5 years

The following is a summary of plant and equipment, at cost, less accumulated
depreciation and amortization at September 30, 1997:

Buildings $ 646,303
Computer equipment 10,292
Furniture and fixtures 27,186
Equipment 164,171
-----------
847,952
Less: accumulated depreciation 151,893
-----------
Total $ 696,059
===========

F-8

<PAGE>
WHITEHALL ENTERPRISES, INC.
FORMERLY
TOTAL WORLD TELECOMMUNICATIONS, INC.
Notes to Consolidated Financial Statements (unaudited)
September 30, 1997

NOTE 3 INCOME TAXES

The Company reduced taxable income in 1997 by applying federal net operating
losses to pre-tax income, reducing taxable income by $71,249,531. These losses
were carried forward from prior years.

The Company has a remaining federal net operating loss carryforward of
$71,650,735, of which $71,249,531 expires in 2004, and $401,204 expires in 2017.

NOTE 4 MORTGAGE PAYABLE AND OTHER CURRENT LIABILITIES
<TABLE>
<CAPTION>
<S> <C>
Mortgage payable at 11% due in installments of $3,573 through March 1999,
collateralized by first mortgage on condominium building. $ 328,147

Other debt collateralized by a second mortgage on condominium building is
non-interest bearing. 108,158
----------
436,305
==========
</TABLE>
These liabilities were paid with the proceeds of the sale of the condominium
parcel in July 1998 as part of the Company's Chapter XI reorganization.

NOTE 5 SUBSEQUENT EVENTS

Quasi-Reorganization
- --------------------
The Company's Board of Directors approved a Quasi-Reorganizaion effective
September 30, 1998, whereby the accumulated deficit has been offset against
additional paid in capital. The resulting retained earnings at September 30,
1998 is zero. Profit or loss shall be measured and included in retained earnings
from October 1, 1998 forward.

Change in Name
- --------------
During January 8, 1999, the Company amended its articles of incorporation
changing its name from Total World Telecommunications, Inc. to Whitehall
Enterprises, Inc.
F-9

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<CASH> 44,559
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 44,559
<PP&E> 847,952
<DEPRECIATION> 151,893
<TOTAL-ASSETS> 745,068
<CURRENT-LIABILITIES> 30,660,876
<BONDS> 0
0
4
<COMMON> 811
<OTHER-SE> (29,916,623)
<TOTAL-LIABILITY-AND-EQUITY> 745,068
<SALES> 41,034,609
<TOTAL-REVENUES> 41,034,609
<CGS> 47,139,547
<TOTAL-COSTS> 47,139,547
<OTHER-EXPENSES> 27,436,679
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (7,266,885)
<INCOME-PRETAX> (109,502,617)
<INCOME-TAX> 0
<INCOME-CONTINUING> (109,502,617)
<DISCONTINUED> 21,717,654
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<NET-INCOME> (87,784,963)
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</TABLE>