PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 13, 1997)
[GRAPHIC OMITTED]
$300,000,000 AGGREGATE PRINCIPAL
AMOUNT OF 4 1/2% CONVERTIBLE
SUBORDINATED NOTES DUE 2002
12,185,834 SHARES
OF COMMON STOCK
This Prospectus Supplement and the accompanying Prospectus relate to the
offer and sale from time to time by the holders named herein and therein or by
their transferees, pledgees, donees, or successors (collectively, the "Selling
Holders") of up to $300,000,000 aggregate principal amount of 4 1/2% Convertible
Subordinated Notes due 2002 (the "Notes") of Tel-Save Holdings, Inc. (the
"Company") and up to 12,185,834 shares of common stock, par value $.01 per
share, of the Company (the "Common Stock"), issuable upon the conversion of the
Notes in full (the "Shares" and, together with the Notes, the "Securities"). The
Company will receive no part of the proceeds of the sales made under this
Prospectus Supplement or the accompanying Prospectus. On August 24, 1998, the
last reported sale price for the Common Stock on the Nasdaq National Market was
$13 1/4.
----------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER
"RISK FACTORS" BEGINNING ON PAGE 5 OF THE ACCOMPANYING PROSPECTUS.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is
August 27, 1998.
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The information in this Prospectus Supplement is qualified in its entirety
by the more detailed information and consolidated financial statements and notes
thereto appearing or incorporated by reference in the accompanying Prospectus.
Prior to making an investment decision with respect to the Securities offered by
this Prospectus Supplement and the accompanying Prospectus, prospective
investors should consider carefully the information contained and incorporated
by reference in this Prospectus Supplement and the accompanying Prospectus.
Capitalized terms used herein and not defined have the meaning assigned to
them in the accompanying Prospectus.
SELLING HOLDERS
The following table supplements the table appearing on pages 38 and 39 of
the accompanying Prospectus and sets forth information with respect to Selling
Holders not identified in the accompanying Prospectus. The name of each Selling
Holder identified below is accompanied by the amount of Notes beneficially owned
by such Selling Holder that may be offered pursuant to this Prospectus
Supplement and the accompanying Prospectus. Such information was obtained from
the Selling Holders between July 11, 1998 and the date hereof unless otherwise
noted. The Shares into which the Notes are convertible are also offered pursuant
to this Prospectus Supplement and the accompanying Prospectus, and the formula
for conversion is set forth in the accompanying Prospectus under "DESCRIPTION OF
THE NOTES -- Conversion." To the Company's knowledge, except as noted below,
none of the Selling Holders identified below has, or within the past three years
has had, any position, office or other material relationship with the Company or
any of its predecessors or affiliates. Because the Selling Holders may offer all
or some portion of the Notes or Shares issuable upon conversion thereof pursuant
to this Prospectus Supplement and the accompanying Prospectus, no estimate can
be given as to the amount of the Notes or Shares issuable upon conversion
thereof that will be held by the Selling Holders upon termination of any such
sales. In addition, the Selling Holders identified below may have sold,
transferred or otherwise disposed of all or a portion of their Notes, since the
date on which they provided the information regarding the Notes, in transactions
exempt from the registration requirements of the Securities Act.
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PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF NOTES NOTES COVERED
BENEFICIALLY BY THIS
SELLING HOLDER NAME OWNED PROSPECTUS
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AAM/Zazove Institutional Income Fund, L.P.(3)(6) ..................... $ 300,000 $ 300,000
Aim Charter(3) ....................................................... $13,000,000 $13,000,000
Aim VI Growth and Income(3) .......................................... $ 2,000,000 $ 2,000,000
American Bible Society(1) ............................................ $ 1,000,000 $ 1,000,000
Argent Classic Convertible Arbitrage Fund L.P.(8) .................... $ 3,000,000 $ 3,000,000
Arkansas PERS(2) ..................................................... $ 1,265,000 $ 1,265,000
BancAmerica Robertson Stephens(3)(6) ................................. $ 1,000,000 $ 1,000,000
Black Diamond Ltd.(6) ................................................ $ 419,000 $ 419,000
Black Diamond Partners, L.P.(6) ...................................... $ 491,000 $ 491,000
BNP Arbitrage SNC(9) ................................................. $ 2,000,000 $ 2,000,000
BTI - Bankers Trust International(1) ................................. $ 9,000,000 $ 9,000,000
BZW Securities Limited(1) ............................................ $ 6,500,000 $ 6,500,000
Chase Securities Inc(9) .............................................. $16,000,000 $16,000,000
Continental Assurance
Company on behalf of its Separate Account (E)(1) .................... $ 2,600,000 $ 2,600,000
Continental Casualty Company(1) ...................................... $ 3,900,000 $ 3,900,000
Delaware PERS(2) ..................................................... $ 1,100,000 $ 1,100,000
Deutsche Morgan Grenfell, Inc.(3)(4) ................................. $ 8,305,000 $ 8,305,000
D.E. Shaw Investments, L.P.(2) ....................................... $ 1,400,000 $ 1,400,000
D.E. Shaw Portfolios International, L.L.C.(2) ........................ $ 1,150,000 $ 1,150,000
D.E. Shaw Securities, L.P.(2) ........................................ $ 3,150,000 $ 3,150,000
Donaldson, Lufkin & Jenrette Sec. Corp.(3) ........................... $11,000,000 $11,000,000
Forest Fulcrum Fund L.P.(3) .......................................... $ 530,000 $ 530,000
Forest Global Convertible Fund Series A-5(1) ......................... $ 450,000 $ 450,000
Forest Investment Management L.P.(3) ................................. $ 95,000 $ 95,000
Franklin Investors Securities Trust -- Convertible Securities Fund(9) $ 1,000,000 $ 1,000,000
</TABLE>
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<TABLE>
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PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF NOTES NOTES COVERED
BENEFICIALLY BY THIS
SELLING HOLDER NAME OWNED PROSPECTUS
- ------------------------------------------------------------------ ----------------- --------------
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Goldman, Sachs & Co(8) ........................................... $ 1,002,000 $ 1,002,000
Gleneagles Fund Company(3) ....................................... $ 500,000 $ 500,00
Hawaiian Airlines Pension Plan -- IAM(2) ......................... $ 100,000 $ 100,000
Hawaiian Airlines Pension Plan for Salaried Employees(2) ......... $ 25,000 $ 25,000
Highbridge Capital Corporation ................................... $ 5,114,000 $ 5,114,000
ICI America Holdings(2) .......................................... $ 450,000 $ 450,000
Kapiolani Medical Center(2) ...................................... $ 225,000 $ 225,000
MainStay Convertible Fund(3)(6) .................................. $ 3,500,00 $ 3,500,000
MainStay Strategic Value Fund(3) ................................. $ 500,000 $ 500,000
Massachusetts Mutual Life Insurance Company(1) ................... $ 4,700,000 $ 4,700,000
MassMutual Corporate Investors(1) ................................ $ 1,000,000 $ 1,000,000
MassMutual Corporate Value Partners Limited(1) ................... $ 1,000,000 $ 1,000,000
MassMutual High Yield Partners LLC(1) ............................ $ 3,000,000 $ 3,000,000
MassMutual Participation Investors(1) ............................ $ 500,000 $ 500,000
McMahan Securities Co., L.P.(8) .................................. $ 250,000 $ 250,000
Merrill Lynch Pierce Fenner & Smith Inc.(8) ...................... $ 2,750,000 $ 2,750,000
Nalco Chemical Retirement(2) ..................................... $ 210,000 $ 210,000
NATWEST Securities Limited(2) .................................... $ 35,800,000 $35,800,000
Orrington International Fund Limited(1) .......................... $ 350,000 $ 350,000
Orrington Investments L.P.(1) .................................... $ 650,000 $ 650,000
Palladin Overseas Fund Limited(3) ................................ $ 250,000 $ 250,000
Palladin Partners I L.P.(3) ...................................... $ 250,000 $ 250,000
Paloma Securities L.L.C.(2) ...................................... $ 1,550.000 $ 1,550,000
PRIM Board(2) .................................................... $ 1,725,000 $ 1,725,000
Q Investments, L.P.(8) ........................................... $ 3,575,000 $ 3,575,000
Retirement Plan for Pilots of Hawaiian Airlines(2) ............... $ 150,000 $ 150,000
R2 Investments, LDC(3) ........................................... $ 1,425,000 $ 1,425,000
Shepherd Investments International Ltd.(1) ....................... $ 25,800,000 $25,800,000
Silverton International Fund Limited(2) .......................... $ 800,000 $ 800,000
Smith Barney Inc.(3)(7) .......................................... $ 27,121,000 $27,121,000
Societe Generale Securities Corp.(1) ............................. $ 5,750,000 $ 5,750,000
Spruce Partners, L.P.(1) ......................................... $ 500,000 $ 500,000
Starvest Discretionary(2) ........................................ $ 500,000 $ 500,000
State of Oregon Equity(2) ........................................ $ 4,500,000 $ 4,500,000
Tribeca Investments, L.L.C.(9) ................................... $ 7,000,000 $ 7,000,000
Worldwide Transactions Limited(5) ................................ $ 93,000 $ 93,000
ZENECA Holdings(2) ............................................... $ 450,000 $ 450,000
</TABLE>
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(1) Information was provided by the Selling Holder prior to December 4, 1997.
(2) Information was provided by the Selling Holder between December 4, 1997 and
December 23, 1997.
(3) Information was provided by the Selling Holder between December 24, 1997
and January 22, 1998.
(4) Deutsche Morgan Grenfell, Inc. and its affiliated companies and/or
individuals may, from time to time, own, have positions in, or options in
the Company's securities and also may perform advisory services and/or have
lending or other credit relationships with the Company. Specifically,
Deutsche Morgan Grenfell, Inc. was an Initial Purchaser of the Notes.
(5) The Prospectus dated November 13, 1997 incorrectly identified the Selling
Holder of certain of these Notes as Carlson Capital, L.P. and not Worldwide
Transactions Limited.
(6) The Notes listed here are in addition to those listed in the Prospectus
dated November 13, 1997.
(7) Salamon Brothers Inc, which merged with Smith Barney Inc. in December 1997,
was an Initial Purchaser of the Notes and has provided advisory services
for, and had credit relationships with, the Company.
(8) Information was provided by the Selling Holder between January 23, 1998 and
March 5, 1998.
(9) Information was provided by the Selling Holder between March 6, 1998 and
July 10, 1998.
The foregoing list of Selling Holders, and the list of Selling Holders
pages 38 and 39 of the accompanying Prospectus, may not include holders of
additional aggregate principal amount of Notes which have been registered for
future sale under the Registration Statement of which this Prospectus Supple-
S-3
<PAGE>
ment and the accompanying Prospectus are parts. Additional Selling Holders will
be identified, together with the amount of Securities to be offered by such
holders, in one or more additional supplements to the accompanying Prospectus.
Any such supplement will be circulated with the accompanying Prospectus and will
be deemed to be a part thereof as of the date of such supplement. Only the
Selling Holders listed in the accompanying Prospectus or any supplement thereto,
including this Prospectus Supplement, (or the transferees, pledgees or donees of
such Selling Holders, or their successors) will be entitled to offer their
Securities by means of the accompanying Prospectus, as supplemented from time to
time.
S-4
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<TABLE>
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====================================================== ======================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY $300,000,000 AGGREGATE PRINCIPAL
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR AMOUNT OF 4 1/2% CONVERTIBLE
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN SUBORDINATED NOTES DUE 2002
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN 12,185,834 SHARES
AUTHORIZED BY THE COMPANY OR ANY OF ITS AGENTS. OF COMMON STOCK
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH
INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH SOLICITATION.
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TABLE OF CONTENTS
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PAGE
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PROSPECTUS SUPPLEMENT --------------------------
PROSPECTUS SUPPLEMENT
Selling Holders .............................. S-2
--------------------------
PROSPECTUS
Available Information ........................ 2
Incorporation of Certain Documents by
Reference ................................. 3
Risk Factors ................................. 5
The Company .................................. 15
Description of Capital Stock ................. 15
Description of the Notes ..................... 15
Book-Entry System; Delivery and Form ......... 29
Certain U.S. Federal Income Tax Conse-
quences ................................... 33
Use of Proceeds .............................. 37
Selling Holders .............................. 37
Plan of Distribution ......................... 40
Legal Matters ................................ 40
Experts ...................................... 40 Dated August 27, 1998
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