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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001104659-01-502051.txt : 20010821
<SEC-HEADER>0001104659-01-502051.hdr.sgml : 20010821
ACCESSION NUMBER:		0001104659-01-502051
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20010604
ITEM INFORMATION:		Acquisition or disposition of assets
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20010820

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			I LINK INC
		CENTRAL INDEX KEY:			0000849145
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEGRAPH & OTHER MESSAGE COMMUNICATIONS [4822]
		IRS NUMBER:				592291344
		STATE OF INCORPORATION:			FL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-17973
		FILM NUMBER:		1719368

	BUSINESS ADDRESS:	
		STREET 1:		13751 S WADSWORTH PK DR SUITE 200
		STREET 2:		STE 200
		CITY:			DRAPER
		STATE:			UT
		ZIP:			84020
		BUSINESS PHONE:		8015765000

	MAIL ADDRESS:	
		STREET 1:		13751 S WADSWORTH PK DR
		STREET 2:		STE 200
		CITY:			DRAPER
		STATE:			UT
		ZIP:			84020

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDCROSS INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>j1587_8ka.htm
<TEXT>
<html>

<head>
<title>Prepared by MerrillDirect</title>
</head>

<body link=blue vlink=purple>

<div>

<div align=right><b><font size=2>

<hr size=2 width="100%" noshade color=black align=right>

</font></b></div>


<div align=right><b><font size=2>

<hr size=1 width="100%" noshade color=black align=right>

</font></b></div>


<p align=center><b><font size=5>UNITED
STATES<br>
SECURITIES AND EXCHANGE COMMISSION</font></b><b><font size=5><br>
</font></b><b><font size=2>WASHINGTON, D.C. 20549</font></b></p>

<p><font size=2 face=Times>&nbsp;</font></p>

<p align=center><b><font size=5 face=Times>FORM 8-K/A#1</font></b></p>

<p align=center><b><font size=3 face=Times>CURRENT REPORT PURSUANT TO SECTION 13 OR
15(d) OF<br>
THE SECURITIES AND EXCHANGE ACT OF 1934</font></b></p>

<p align=center><font size=2>June 4, 2001<br>
Date of Report (date of Earliest Event Reported)</font></p>

<p align=center><b><font size=5 face=Times>I-LINK INCORPORATED</font><br>
</b><font size=2>(Exact Name of Registrant as Specified in its
Charter)</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="110%">
 <tr>
  <td  align=center width=213 valign=top><b><font size=2>FLORIDA</font></b></td>
  <td  align=center width=213 valign=top><b><font size=2>0-17973</font></b></td>
  <td  align=center width=213 valign=top><b><font size=2>59-2291344</font></b></td>
 </tr>
 <tr>
  <td  align=center width=213 valign=top><font size=2>(State or Other
  Jurisdiction of<br>
  Incorporation or Organization)</font></td>
  <td  align=center width=213 valign=top><font size=2>(Commission File No.)</font></td>
  <td  align=center width=213 valign=top><font size=2>(I.R.S. Employer
  Identification No.)</font></td>
 </tr>
</table>

<p align=center><b><font size=2>13571 South Wadsworth Park
Drive, Suite 200, Draper, Utah 84020<br>
</font></b><font size=2>(Address of
principal executive offices and zip code)</font></p>

<p align=center><b><font size=2>(801) 576-5000<br>
</font></b><font size=2>(Registrant&#146;s telephone number, including
area code)</font></p>

<p align=center><b><font size=2>not applicable<br>
</font></b><font size=2>(Former name or
former address, if changed from last report)</font></p>





<hr size=1 width="100%" noshade color=black align=right>






<hr size=2 width="100%" noshade color=black align=right>


<page>


<p><b><font size=2>ITEM 2.&nbsp; Acquisition
or Disposition of Assets</font></b></p>

<p><font size=2>On June 19, 2001, Registrant filed a
Current Report on Form 8-K to announce the purchase of certain select assets of
Communications Telesystems International d.b.a. WorldxChange Communications
from a bankruptcy proceeding and assumption or renegotiation of certain select
contracts associated with the assets purchased.&nbsp; This amendment to Registrant&#146;s Current Report on Form 8-K is
being filed to include the Financial Statements and Pro Forma Financial Information
required by Item 7 of Form 8-K.</font></p>

<p><b><font size=2>ITEM 7.&nbsp; Financial
Statements and Exhibits.</font></b></p>

<dir>
<p><font size=2>(a)&nbsp; Consolidated Financial Statements of the
Business Acquired.</font></p>
</dir>

<p><font size=2>See Index to Consolidated Financial
Statements and Pro Forma Financial Information on Page F-1 of this Report</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp; Pro Forma Financial Information.</font></p>

<p><font size=2>See Index to Consolidated Financial
Statements and Pro Forma Financial Information on Page F-1 of this Report</font></p>

<p><font size=2>&nbsp;</font></p>

<p align=center><font size=2>SIGNATURES</font></p>

<p><font size=2>Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the duly authorized undersigned.</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="11%" valign=top><font size=2>Date:</font></td>
  <td width="51%" valign=top><font size=2>August
  20, 2001</font></td>
  <td  align=center width="37%" valign=top><font size=2>I-Link Incorporated</font></td>
 </tr>
 <tr>
  <td width="11%" valign=top>&nbsp;</td>
  <td width="51%" valign=top>&nbsp;</td>
  <td width="37%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width="11%" valign=top>&nbsp;</td>
  <td width="51%" valign=top>&nbsp;</td>
  <td width="37%" valign=top><font size=2>/s/
  James A. Giauque&nbsp; III</font></td>
 </tr>
 <tr>
  <td width="11%" valign=top>&nbsp;</td>
  <td width="51%" valign=top>&nbsp;</td>
  <td  align=center width="37%" valign=top>
<hr size=1 width="100%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="11%" valign=top>&nbsp;</td>
  <td width="51%" valign=top>&nbsp;</td>
  <td  align=center width="37%" valign=top><font size=2>James A. Giauque III</font></td>
 </tr>
 <tr>
  <td width="11%" valign=top>&nbsp;</td>
  <td width="51%" valign=top>&nbsp;</td>
  <td  align=center width="37%" valign=top><font size=2>Chief Accounting
  Officer</font></td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<p><b><font size=2>Exhibit Index:</font></b></p>

<p><font size=2>23.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consent of Ernst &amp; Young LLP,&nbsp; Independent Auditors</font></p>

<page>


<p align=center><b><font size=2>I-LINK INCORPORATED<br>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND PRO FORMA<br>
FINANCIAL INFORMATION</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="97%">
 <tr>
  <td width=545 valign=top><b><font size=2>United
  States Operations of Communications Telesystems International<br>
  d.b.a. WorldxChange Communications</font></b>&nbsp;</td>
  <td width=19 valign=top><h6 align=left>&nbsp;</h6></td>
  <p></p>
 </tr>
</table>

<p><font size=3 face=Times>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="97%">
 <tr>
  <td width=504 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=504 valign=top><font   size=2><a
  href="#Reportofernstyoungllpindependentauditors"   title="Click to goto REPORT OF ERNST &amp; YOUNG LLP, INDEPENDENT AUDITORS">Report
  of Ernst &amp; Young LLP, Independent Auditors</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font   size=2><a
  href="#ConsolidatedBalanceSheets"   title="Click to goto Consolidated Balance Sheets">Consolidated Balance Sheets</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font   size=2><a
  href="#ConsolidatedStatementsOfOperations"   title="Click to goto Consolidated Statements of Operations">Consolidated
  Statements of Operations</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font   size=2><a
  href="#ConsolidatedStatementsOfShareholdersDefi"   title="Click to goto Consolidated Statements of Shareholders&#146; Deficit and&#11;Comprehensive Loss">Consolidated
  Statements of Shareholders&#146; Deficit</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font   size=2><a
  href="#ConsolidatedStatementsOfCashFlows"   title="Click to goto Consolidated Statements of Cash Flows">Consolidated
  Statements of Cash Flows</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font   size=2><a   href="#Businessactivity1" title="Click to goto 1. Business Activity">Notes to
  Consolidated Financial Statements</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top>&nbsp;</td>
  <td width=60 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td width=504 valign=top><b><font size=2>Pro
  forma Combined Condensed Financial Statements (unaudited)</font></b></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font size=2><a
  href="#UnauditedProFormaCombinedCondensedStatem"   title="Click to goto UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS&#13;&#7;">Unaudited
  Pro Forma Combined Condensed Statements of Operations</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
 <tr>
  <td width=504 valign=top><font size=2><a
  href="#NotesToUnauditedProFormaCombinedCondense"   title="Click to goto NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED">Notes
  to Unaudited Pro Forma Combined Condensed Financial Statements</a></font></td>
  <td width=60 valign=top>&nbsp;</td>
  <p></p>
 </tr>
</table>

<page>


<p>&nbsp;</p>

<p align=center><a name=Reportofernstyoungllpindependentauditors><b><font size=2>REPORT OF ERNST &amp; YOUNG
LLP, INDEPENDENT AUDITORS</font></b></a></p>

<p><font size=2>The
Board of Directors<br>
WorldxChange Corporation</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We have audited the consolidated
balance sheets for the United States operations of Communications Telesystems
International d.b.a. WorldxChange Communications as of September 30, 2000 and
1999, and the related consolidated statements of operations, shareholders&#146;
deficit, and cash flows for each of the three years in the period ended
September 30, 2000. These financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an opinion on the
financial statements based on our audits.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; We conducted our audits in accordance
with auditing standards generally accepted in the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In our opinion, the consolidated
financial statements referred to above present fairly, in all material
respects, the consolidated financial position for the United States operations
of Communications Telesystems International d.b.a. WorldxChange Communications
at September 30, 2000 and 1999 and the consolidated results of its operations
and its cash flows for each of the three years in the period ended September
30, 2000, in conformity with accounting principles generally accepted in the
United States.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As discussed in Note 2 to the
financial statements, the Company&#146;s recurring losses and deficiency in working
capital and shareholders&#146; equity raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.&nbsp; In December 2000, the Company completed its
merger transaction with World Access, Inc.&nbsp;
Also, as discussed in Note 13 to the financial statements, on April 24,
2001 World Access filed voluntary petitions for Chapter 11 relief in the United
States Bankruptcy Court.&nbsp; On June 4,
2001, I-Link Incorporated, through its wholly-owned subsidiary WorldxChange
Corporation, completed its purchase of certain assets employed in the long
distance business of Communications Telesystems International d.b.a.
WorldxChange Communications as part of a court supervised sale in the
bankruptcy proceedings of World Access, and assumed or renegotiated certain
select contracts associated with the assets purchased.</font></p>

<dir><dir><dir><dir><dir><dir><dir><dir><dir>
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/ ERNST &amp; YOUNG LLP</font></p>
</dir></dir></dir></dir></dir></dir></dir></dir></dir>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>San
Diego, California<br>
January 10, 2001,<br>
except for Note 13, as to which the date is<br>
August 15, 2001</font></p>

<page>


<p align=center><b><font size=2>United States Operations<br>
of<br>
COMMUNICATIONS TELESYSTEMS INTERNATIONAL<br>
d.b.a.<br>
WORLDxCHANGE COMMUNICATIONS</font></b></p>

<p align=center><a name=ConsolidatedBalanceSheets><b><font size=2>Consolidated Balance Sheets</font></b></a><b><font size=2><br>
(Dollars in thousands)</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="24%" colspan=5 valign=bottom><b><font size=2>September 30,</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><b><font size=2>March 31,</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="24%" colspan=5 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><b><font size=2>2001</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom><b><font size=2>1999</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><b><i><font size=2>(unaudited)</font></i></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom bgcolor="#cceeff"><b><font size=2>ASSETS</font></b></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Current assets:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Cash and cash
  equivalents</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font size=2>56</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font size=2>1,442</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>35,999</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom><font size=2>Accounts receivable,
  net of allowance of&nbsp; $10,567 at March
  31, 2001 (unaudited), $10,642 at September 30, 2000 and $5,853 at September
  30, 1999</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>26,527</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>26,866</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>44,246</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Prepaid expenses and
  other current assets</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>3,064</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>2,477</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>2,597</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom><font size=2>Total current assets</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>29,647</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>30,785</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>82,842</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Equipment and
  leasehold improvements, net</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>103,672</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>108,675</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>95,875</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Investments in and
  advances to majority-owned unconsolidated foreign subsidiaries</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>63,601</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>27,354</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Other assets</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>1,948</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>2,030</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>2,947</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="55%" valign=bottom bgcolor="#cceeff"><font size=2>Total assets</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font size=2>135,267</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font size=2>205,091</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>209,018</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td  align=center width="61%" colspan=4 valign=bottom bgcolor="#cceeff"><b><font size=2>LIABILITIES AND SHAREHOLDERS&#146;
  DEFICIT</font></b></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Current liabilities:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Accrued network costs</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font size=2>75,295</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font size=2>72,379</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>71,416</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom><font size=2>Accounts payable</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>6,464</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>16,679</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>9,698</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Other accrued
  liabilities</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>42,388</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>20,635</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>13,090</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom><font size=2>Current portion of
  long-term debt</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>51,007</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>190,394</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>9,767</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Current portion of
  capital lease obligations</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>11,034</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>10,854</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>9,655</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom><font size=2>Total current
  liabilities</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>186,188</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>310,941</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>113,626</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Net advance from
  affiliate</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>114,292</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Long-term debt</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>28,251</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>34,427</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>100,215</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Capital lease
  obligations</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>18,612</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>22,384</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>28,792</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Other long-term liabilities</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>675</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>652</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>1,438</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom><font size=2>Total liabilities</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>348,018</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>368,404</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>244,071</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="61%" colspan=4 valign=bottom><font size=2>Shareholders&#146; deficit:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Preferred Stock, no
  par value; Authorized shares &#150; 10,000,000:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="3%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="57%" colspan=2 valign=bottom><font size=2>Series A Cumulative
  Preferred Stock; Issued and outstanding 30,000 at&nbsp; September 30, 2000 and 1999; liquidation preference of $30,000</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>30,000</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>30,000</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>30,000</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Common Stock, no par
  value; Authorized shares &#150; 100,000,000, Issued and outstanding 42,613,954 at
  September 30, 2000 and 36,965,911 at September 30, 1999</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>147,938</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>148,056</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>99,047</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom><font size=2>Notes receivable from
  shareholders</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>(2,041</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>(1,988</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>(1,474</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>Accumulated deficit</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(375,099</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(325,138</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(160,221</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom><font size=2>Accumulated other
  comprehensive loss</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>(13,549</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>(14,243</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>(2,405</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="59%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="55%" valign=bottom bgcolor="#cceeff"><font size=2>Total shareholders&#146;
  deficit</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(212,751</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(163,313</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(35,053</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom><font size=2>Total liabilities and
  shareholders&#146; deficit</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>135,267</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom><font size=2>205,091</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>209,018</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="55%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=10></td>
  <td width=8></td>
  <td width=11></td>
  <td width=323></td>
  <td width=5></td>
  <td width=59></td>
  <td width=10></td>
  <td width=5></td>
  <td width=71></td>
  <td width=10></td>
  <td width=5></td>
  <td width=50></td>
  <td width=10></td>
 </tr>
</table>

<p align=center><font size=2>See accompanying notes.<page>

<b>United
States Operations<br>
of<br>
COMMUNICATIONS TELESYSTEMS INTERNATIONAL<br>
d.b.a.<br>
WORLDxCHANGE COMMUNICATIONS</b></font></p>

<p align=center><a name=ConsolidatedStatementsOfOperations><b><font size=2>Consolidated Statements of Operations</font></b></a><b><font size=2><br>
(Dollars in thousands)</font></b></p>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="40%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=center width="22%" colspan=8 valign=bottom><b><font size=2>Six months ended March 31,</font></b></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="32%" colspan=9 valign=bottom><b><font size=2>Years Ended September 30,</font></b></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="40%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=center width="22%" colspan=8 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="32%" colspan=9 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="40%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=4 valign=bottom><b><font size=2>2001</font></b></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom><b><font   size=2>1999</font></b></td>
  <td  align=center width="2%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom><b><font size=2>1998</font></b></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="40%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="40%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=center width="24%" colspan=9 valign=bottom><b><font size=2>(unaudited)</font></b></td>
  <td width="11%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="11%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="10%" colspan=3 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="40%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="11%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="12%" colspan=5 valign=bottom>&nbsp;</td>
  <td width="11%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="11%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="10%" colspan=3 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=2>Revenues</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>111,238</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>189,046</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>297,845</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>370,307</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>354,531</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom><font size=2>Operating expenses:</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="39%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Cost of services
  (exclusive of depreciation and amortization shown separately below)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>109,798</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>156,390</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>280,510</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>289,204</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>259,735</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="39%" colspan=4 valign=bottom><font size=2>Selling, general and
  administrative</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>31,292</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=2>39,113</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>83,952</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>78,525</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>82,256</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="39%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Depreciation and
  amortization</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>12,812</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>9,232</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>20,451</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>12,923</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>9,074</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="35%" colspan=3 valign=bottom><font size=2>Total operating
  expenses</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>153,902</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=2>204,735</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>384,913</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>380,652</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>351,065</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=2>Operating loss</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(42,664</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(15,689</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>(87,068</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(10,345</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>3,466</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom><font size=2>Interest expense</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>6,771</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=2>9,546</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>22,219</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>11,548</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>9,434</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=2>Loss from
  majority-owned unconsolidated foreign subsidiaries</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>33,451</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>74,867</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>41,391</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>20,045</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom><font size=2>Reimbursement from
  World Access of net losses under Management Agreement</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>(22,688</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>&#150;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=2>Other expense, net</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>526</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>586</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>769</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>567</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>1,440</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom><font size=2>Net loss</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>(49,961</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=2>(59,272</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>(162,235</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=2>(63,851</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>(27,453</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="39%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Preferred stock
  dividends</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>1,584</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>2,682</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>2</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>7</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom><font size=2>Net loss applicable to
  common shareholders</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>(49,961</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(60,856</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td width="0%" colspan=2 valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>(164,917</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>(63,853</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="0%" colspan=2 valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>(27,460</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=3 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=11></td>
  <td width=21></td>
  <td width=203></td>
  <td width=1></td>
  <td width=2></td>
  <td width=5></td>
  <td width=51></td>
  <td width=10></td>
  <td width=1></td>
  <td width=5></td>
  <td width=57></td>
  <td width=10></td>
  <td width=1></td>
  <td width=4></td>
  <td width=51></td>
  <td width=13></td>
  <td width=5></td>
  <td width=50></td>
  <td width=12></td>
  <td width=0></td>
  <td width=5></td>
  <td width=49></td>
  <td width=9></td>
 </tr>
</table>

<p align=center><font size=2>See accompanying notes.<page>

<b>United
States Operations<br>
of<br>
COMMUNICATIONS TELESYSTEMS INTERNATIONAL<br>
d.b.a.<br>
WORLDxCHANGE COMMUNICATIONS</b></font></p>

<p align=center><a name=ConsolidatedStatementsOfShareholdersDefi><b><font size=2>Consolidated Statements of
Shareholders&#146; Deficit and<br>
Comprehensive Loss</font></b></a><b><font size=2><br>
(Dollars in thousands)</font></b></p>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="16%" colspan=4 valign=bottom><b><font size=2>Series A<br>
  Cumulative<br>
  Preferred Stock</font></b></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="18%" colspan=4 valign=bottom><b><font size=2>Series B<br>
  Cumulative<br>
  Preferred Stock</font></b></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="20%" colspan=4 valign=bottom><b><font size=2>Common Stock</font></b></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="16%" colspan=4 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="18%" colspan=4 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="20%" colspan=4 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="7%" valign=top><b><font   size=2>Shares</font></b></td>
  <td  align=center width="1%" valign=top>&nbsp;</td>
  <td  align=center width="7%" colspan=2 valign=top><b><font   size=2>Amount</font></b></td>
  <td  align=center width="1%" valign=top>&nbsp;</td>
  <td  align=center width="8%" valign=top><b><font   size=2>Shares</font></b></td>
  <td  align=center width="1%" valign=top>&nbsp;</td>
  <td  align=center width="8%" colspan=2 valign=top><b><font   size=2>Amount</font></b></td>
  <td  align=center width="1%" valign=top>&nbsp;</td>
  <td  align=center width="9%" valign=top><b><font   size=2>Shares</font></b></td>
  <td  align=center width="1%" valign=top>&nbsp;</td>
  <td  align=center width="8%" colspan=2 valign=bottom><b><font size=2>Amount</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="7%" valign=top>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=top>&nbsp;</td>
  <td width="7%" colspan=2 valign=top><div align=right><b><font   size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=top>&nbsp;</td>
  <td width="8%" valign=top><div align=right><b><font   size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=top>&nbsp;</td>
  <td width="8%" colspan=2 valign=top><div align=right><b><font   size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=top>&nbsp;</td>
  <td width="9%" valign=top><div align=right><b><font   size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=top>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><b><font size=2>Balance at October 1, 1997</font></b></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>23</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="6%" valign=bottom bgcolor="#cceeff"><font size=2>7</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>27,734,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>258</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Dividends on Series A
  Preferred Stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Issuance of Common
  Stock</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>788,127</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>10,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Exercise of
  options/warrants</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>54,425</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>39</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Comprehensive loss:</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Net loss</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Foreign currency
  translation adjustment</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="7%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="7%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="38%" valign=bottom bgcolor="#cceeff"><font size=2>Total comprehensive
  loss</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="7%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="7%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><b><font size=2>Balance at September 30, 1998</font></b></td>
  <td  align=right width="7%" valign=bottom><font size=2>23</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>7</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>28,576,552</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>10,297</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Repurchase of Series A
  Cumulative Preferred Stock</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>(23</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(7</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Dividends on Series A
  Preferred Stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Issuance of Series A
  Cumulative Preferred Stock</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>30,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>30,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Issuance of Common
  Stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>8,153,120</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>87,102</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Exercise of
  options/warrants</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>236,239</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>1,648</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Notes receivable for
  sales of common stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Comprehensive loss:</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Net loss</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Foreign currency
  translation adjustment</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="38%" valign=bottom><font size=2>Total comprehensive
  loss</font></td>
  <td  align=right width="7%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="7%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="7%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><b><font size=2>Balance at September 30, 1999</font></b></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>30,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>30,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>36,965,911</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>99,047</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Dividends on Preferred
  Stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Issuance of Series B
  Cumulative Preferred Stock net of issuance cost of $1,342</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>50,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>48,658</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Conversion of Series B
  Cumulative Preferred Stock into Common Stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>(50,000</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>(48,658</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>5,555,550</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>48,658</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Exercise of options/warrants</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>92,493</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>351</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Notes receivable for
  sales of common stock</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Comprehensive loss:</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom><font size=2>Net loss</font></td>
  <td  align=right width="7%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Foreign currency
  translation adjustment</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="38%" valign=bottom><font size=2>Total comprehensive
  loss</font></td>
  <td  align=right width="7%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="7%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="7%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="7%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom bgcolor="#cceeff"><b><font size=2>Balance at September 30, 2000</font></b></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>30,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="6%" valign=bottom bgcolor="#cceeff"><font size=2>30,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>42,613,954</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="7%" valign=bottom bgcolor="#cceeff"><font size=2>148,056</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="39%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="7%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="7%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="8%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
</table>

<p align=center><font size=1>&nbsp;</font></p>

<page>


<p align=center>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="99%">
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="12%" colspan=2 valign=bottom><b><font size=2>Notes Receivable<br>
  from<br>
  Shareholders</font></b></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><b><font size=2>Accumulated<br>
  Deficit</font></b></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" colspan=2 valign=bottom><b><font size=2>Accumulated<br>
  Other<br>
  Comprehensive<br>
  Loss</font></b></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="12%" colspan=2 valign=bottom><b><font size=2>Total<br>
  Shareholders&#146;<br>
  Deficit</font></b></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><b><font size=2>Balance at October 1, 1997</font></b></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font size=2>(68,908</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>(237</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(68,880</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Dividends on Series A
  Preferred Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>(7</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(7</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Issuance of Common
  Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>10,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Exercise of
  options/warrants</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>39</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Comprehensive loss:</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Net loss</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>(27,453</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(27,453</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Foreign currency
  translation adjustment</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(3,292</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(3,292</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="39%" valign=bottom><font size=2>Total comprehensive
  loss</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(30,745</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><b><font size=2>Balance at September 30, 1998</font></b></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(96,368</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(3,529</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(89,593</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Repurchase of Series A
  Cumulative Preferred Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(7</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Dividends on Series A
  Preferred Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(2</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(2</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Issuance of Series A
  Cumulative Preferred Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>30,000</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Issuance of Common
  Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>87,102</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Exercise of
  options/warrants</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>1,648</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Notes receivable for
  sales of common stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(1,474</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(1,474</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Comprehensive loss:</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Net loss</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(63,851</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(63,851</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Foreign currency
  translation adjustment</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>1,124</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>1,124</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="39%" valign=bottom bgcolor="#cceeff"><font size=2>Total comprehensive
  loss</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(62,727</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><b><font size=2>Balance at September 30, 1999</font></b></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(1,474</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>(160,221</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>(2,405</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(35,053</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Dividends on Preferred
  Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(2,682</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(2,682</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Issuance of Series B
  Cumulative Preferred Stock net of issuance cost of $1,342</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>48,658</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Conversion of Series B
  Cumulative Preferred Stock into Common Stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Exercise of
  options/warrants</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>351</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Notes receivable for
  sales of common stock</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(514</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(514</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Comprehensive loss:</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Net loss</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(162,235</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(162,235</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><font size=2>Foreign currency
  translation adjustment</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=2>(11,838</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(11,838</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="39%" valign=bottom bgcolor="#cceeff"><font size=2>Total comprehensive
  loss</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(174,073</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom><b><font size=2>Balance at September 30, 2000</font></b></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(1,988</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>(325,138</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=2>(14,243</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="0%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(163,313</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="41%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
</table>

<p align=center><font size=2>See accompanying notes.</font></p>

<page>


<p align=center><b><font size=2><br>
United States Operations<br>
of<br>
COMMUNICATIONS TELESYSTEMS INTERNATIONAL<br>
d.b.a.<br>
WORLDxCHANGE COMMUNICATIONS</font></b></p>

<p align=center><a name=ConsolidatedStatementsOfCashFlows><b><font size=2>Consolidated Statements of Cash Flows</font></b></a><b><font size=2><br>
(Dollars in thousands)</font></b></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="29%" colspan=10 valign=bottom><b><font size=2>Six months ended March 31,</font></b></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="34%" colspan=16 valign=bottom><b><font size=2>Years Ended September 30,</font></b></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=center width="29%" colspan=10 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="34%" colspan=16 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=3 valign=bottom><b><font size=2>2001</font></b></td>
  <td  align=center width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=4 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=4 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=4 valign=bottom><b><font size=2>1999</font></b></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=4 valign=bottom><b><font size=2>1998</font></b></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=3 valign=bottom><div><b><font   size=2><hr size=1 width="100%" noshade color=black align=left></font></b></div></td>
  <td  align=center width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=4 valign=bottom><div><b><font   size=2><hr size=1 width="100%" noshade color=black align=left></font></b></div></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=4 valign=bottom><div><b><font   size=2><hr size=1 width="100%" noshade color=black align=left></font></b></div></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=4 valign=bottom><div><b><font   size=2><hr size=1 width="100%" noshade color=black align=left></font></b></div></td>
  <td  align=center width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom><div><b><font size=2><hr size=1 width="100%" noshade color=black align=left></font></b></div></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=center width="29%" colspan=10 valign=bottom><b><font size=2>(unaudited)</font></b></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><b><font size=2>Operating activities</font></b></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><font size=2>Net loss</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>(49,961</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom><font size=2>(59,272</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>(162,235</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>(63,851</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>(27,453</font></td>
  <td width="0%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Adjustments to
  reconcile net loss to net cash used in operating activities:</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="30%" colspan=6 valign=bottom><font size=2>Depreciation and
  amortization</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>12,812</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>9,232</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>20,451</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>12,923</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>9,074</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="30%" colspan=6 valign=bottom bgcolor="#cceeff"><font size=2>Reimbursement from
  World Access of net losses under Management Agreement</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(22,688</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="30%" colspan=6 valign=bottom><font size=2>Changes in operating
  assets and liabilities:</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="27%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Accounts receivable</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>339</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>13,835</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>17,380</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(13,448</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>16,126</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="27%" colspan=4 valign=bottom><font size=2>Prepaid expenses and
  other assets</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(505</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>833</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>1,037</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(411</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(829</font></td>
  <td width="0%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="27%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Accrued network costs</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>2,916</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(10,473</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>963</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>38,066</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(14,254</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="27%" colspan=4 valign=bottom><font size=2>Accounts payable</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(10,215</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>2,088</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>6,981</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>967</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(5,699</font></td>
  <td width="0%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="5%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="27%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>Other accrued
  liabilities</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>21,753</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>2,359</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>7,545</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>1,044</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(8,597</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="7%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="25%" colspan=3 valign=bottom><font size=2>Net cash used in
  operating activities</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(22,861</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>(41,398</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(130,566</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(24,710</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(31,632</font></td>
  <td width="0%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><b><font size=2>Investing activities</font></b></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><font size=2>Acquisition of
  equipment and leasehold improvements</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(3,958</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>(2,235</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(4,523</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(15,731</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(11,790</font></td>
  <td width="0%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Advances to
  majority-owned unconsolidated foreign subsidiaries</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>(3,851</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(60,668</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>23,581</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(23,247</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(1,330</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="27%" colspan=5 valign=bottom><font size=2>Net cash provided by
  (used in) investing activities</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(7,809</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>(62,903</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>19,058</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(38,978</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(13,120</font></td>
  <td width="0%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><b><font size=2>Financing activities</font></b></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><font size=2>Proceeds (repayment)
  from debt and capital lease obligations, net</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(149,132</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>21,469</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>28,994</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(20,418</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>51,326</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Net advance from
  affiliate</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>177,722</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><font size=2>Proceeds from the
  issuance of preferred stock</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>&#150;</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>48,658</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>48,658</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>29,991</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>&#150;</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Proceeds from issuance
  of common stock</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>71,648</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>10,032</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="27%" colspan=5 valign=bottom><font size=2>Net cash provided by
  financing activities</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>28,590</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>70,127</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>77,652</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>81,221</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>61,358</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Effect of exchange
  rate changes on cash</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>694</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(1,270</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(701</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>11</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>(219</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="27%" colspan=5 valign=bottom><font size=2>Net increase
  (decrease) in cash and cash equivalents</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom><font size=2>(1,386</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom><font size=2>(35,444</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>(34,557</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>)</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>17,544</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom><font size=2>16,387</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Cash and cash
  equivalents at beginning of period</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>1,442</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>35,999</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>35,999</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>18,455</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=2>2,068</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><font size=2>Cash and cash
  equivalents at end of period</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>56</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom><font size=2>555</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>1,442</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>35,999</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>18,455</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><b><font size=2>Supplemental disclosure of cash flow information</font></b></td>
  <td  align=right width="13%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Cash paid during the
  period for:</font></td>
  <td  align=right width="13%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="10%" colspan=4 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="30%" colspan=6 valign=bottom><font size=2>Interest</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font size=2>7,029</font></td>
  <td width="4%" colspan=3 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom><font size=2>5,585</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>21,341</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>9,248</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>6,686</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="30%" colspan=6 valign=bottom bgcolor="#cceeff"><font size=2>Income taxes</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom><b><font size=2>Non&#151;cash investing and financing activities</font></b></td>
  <td  align=right width="13%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="1%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="33%" colspan=7 valign=bottom bgcolor="#cceeff"><font size=2>Assets acquired by
  incurring capital lease obligations or long&#151;term debt</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>10,235</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>26,850</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>53,391</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>10,421</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="30%" colspan=5 valign=bottom><font size=2>Common stock issued in
  exchange for the acquisition of certain minority interest</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" colspan=3 valign=bottom><font size=2>&#150;</font></td>
  <td width="4%" colspan=2 valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>17,102</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" colspan=2 valign=bottom><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom><font size=2>&#150;</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td   width="2%" colspan=2>&nbsp;</td>
 </tr>
 <tr>
  <td width="30%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=2>Debt issued in
  conjunction with Acquisition of ACC</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="4%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="10%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>53,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="9%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>53,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="8%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=2>&#150;</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td   width="2%" colspan=2>&nbsp;</td>
 </tr>

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  <td width=134></td>
  <td width=7></td>
  <td width=6></td>
  <td width=7></td>
  <td width=60></td>
  <td width=13></td>
  <td width=11></td>
  <td width=7></td>
  <td width=6></td>
  <td width=7></td>
  <td width=49></td>
  <td width=11></td>
  <td width=2></td>
  <td width=4></td>
  <td width=6></td>
  <td width=7></td>
  <td width=42></td>
  <td width=11></td>
  <td width=2></td>
  <td width=4></td>
  <td width=6></td>
  <td width=7></td>
  <td width=38></td>
  <td width=11></td>
  <td width=2></td>
  <td width=4></td>
  <td width=6></td>
  <td width=7></td>
  <td width=38></td>
  <td width=2></td>
  <td width=11></td>
  <td width=2></td>
 </tr>
</table>

<p align=center><font size=2>See accompanying notes.</font></p>

<page>


<p align=center><b><font size=2>United States Operations<br>
of<br>
COMMUNICATIONS TELESYSTEMS INTERNATIONAL<br>
d.b.a.<br>
WORLDxCHANGE COMMUNICATIONS</font></b></p>

<p align=center><b><font size=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br>
(Information subsequent to September 30, 2000 and pertaining to March 31, 2001
and for the six months ended March 31, 2000 and 2001 is unaudited)</font></b></p>

<p><a name=Businessactivity1><b><font size=2>1. Business Activity</font></b></a></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Communications Telesystems
International d.b.a WorldxChange Communications (&#147;WorldxChange&#148;), a California
corporation, is a facilities based telecommunications carrier that provides
international and domestic long distance service to retail and carrier
customers. WorldxChange&#146;s retail base was comprised of residential and
commercial customers. WorldxChange&#146;s wholesale base was comprised of other U.S.
and foreign telecommunications carriers and resellers. WorldxChange has
established retail and carrier operations in the United States, the Pacific
Rim, Canada, Europe and Latin America. WorldxChange also provides operator,
debit/calling card service, toll free, private line and other enhanced
services.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the purposes of these financial
statements for the United States operations of WorldxChange, its operations in
the United Kingdom, France, Germany, Belgium, The Netherlands, Australia, New Zealand
and Canada controlled up until WorldxChange was acquired by World Access
through majority-owned subsidiaries have been excluded from operations with the
net loss shown as &#147;Loss from majority-owned unconsolidated foreign
subsidiaries.&#148;</font></p>

<p><b><font size=2>2.
Basis of Presentation and Summary of Significant Accounting Policies</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Basis of Presentation</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The accompanying financial
statements have been prepared assuming that WorldxChange will continue as a
going concern. WorldxChange has experienced recurring losses and has a
deficiency in working capital and shareholders&#146; equity, which raise substantial
doubt about its ability to continue as a going concern.&nbsp; The fiscal 2000 and March 31, 2001 financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.&nbsp; WorldxChange
completed its merger with World Access in December 2000 and in April 2001 World
Access filed for bankruptcy.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Interim Financial Information (Unaudited)</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The accompanying financial
statements at March 31, 2001 and for the six months ended March 31, 2001 and
2000 are unaudited but include all adjustments (consisting of normal recurring
accruals), which in the opinion of management, are necessary for a fair
statement of the financial position and the operating results and cash flows
for the interim date and periods presented. Results for the interim period
ended March 31, 2001 are not necessarily indicative of results for the entire
year or future periods.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Consolidation</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The accompanying consolidated
financial statements include the accounts of only the United States operations
of WorldxChange. Its wholly and majority owned foreign subsidiaries have been
shown utilizing the equity method of accounting. Only the domestic intercompany
accounts and transactions have been eliminated in consolidation.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Cash Equivalents</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash equivalents are highly liquid
investments purchased with maturities of three months or less when purchased.</font></p>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Foreign
Currency</i></font></p>

<p><font size=2>Net
assets and liabilities of operations outside the United States, for which the
functional currency is not U.S. dollars, are translated into U.S. dollars using
the exchange rate in effect at each period end. The net operating activity is
translated at the average exchange rate prevailing during the period.
Cumulative translation adjustments are included as a separate component of
shareholders&#146; deficit. Exchange gains and losses from foreign currency
transactions are included in &#147;Other expense, net&#148; in the accompanying
Consolidated Statements of Operations.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Concentration of Credit Risk</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange&#146;s customer base in the
United States is comprised of carrier customers and residential and commercial
users of its direct dial long distance telephone services, as well as hotels
and other users of its operator&#151;assisted long distance telephone services.
WorldxChange&#146;s United States revenues from residential and smaller commercial
users are billed and collected by local exchange carriers (LECs). These LECs
pass through their collections to WorldxChange based on the LECs own collection
experience with customers billed under these billing agreements. WorldxChange
direct bills carrier and certain commercial customers in the United States.
WorldxChange performs credit evaluations of the financial condition of these
direct bill customers, and may require a deposit in certain circumstances.
Revenue is reported net of estimated customer credits which are provided for in
the financial statements at the same time the corresponding revenue is
recognized. The Company periodically estimates its reserve requirements for
uncollectible accounts, and the bad debt expense is included in selling,
general and administrative expense. No one customer accounted for more than 10%
of revenues of the United States operations for any period during fiscal 2000,
1999, and 1998.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Equipment and Leasehold Improvements</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equipment and leasehold
improvements in the United States are recorded at cost and are depreciated or
amortized using the straight&#151;line method over the estimated useful lives of the
assets (generally two to seven years). Equipment under capital leases are
recorded at the net present value of the minimum lease payments and are
amortized over the shorter of the useful life of the asset or the lease term
(ranging from three to seven years). Interests in international undersea and
land based fiber optic cable systems are amortized over their estimated useful
lives, typically 20 years. Total depreciation expense related to the United
States operating assets for the fiscal years ended September 30, 2000, 1999 and
1998 was $18,573,000, $12,923,000 and $9,074,000, respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Installation Costs</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Installation costs consist of costs
incurred by WorldxChange for the expansion of its switching capacity and
related network. These costs also include dialer installation costs incurred
upon establishing network services with certain operator services customers.
These costs are amortized using the straight&#151;line method over three years.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Impairment of Long-Lived Assets</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company evaluates impairment of
long-lived assets pursuant to SFAS No. 121, &#147;Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,&#148; which requires
impairment losses to be recorded on long-lived assets used in operations when
events or changes in circumstances as of the balance sheet date indicate that
the carrying amount of an asset may not be recoverable. Management periodically
evaluates property and equipment and intangible assets for impairment whenever
events or changes in circumstances indicate the assets may be impaired. This
evaluation consists of comparing estimated future cash flows (undiscounted and
without interest charges) over the remaining life of the asset to its carrying
value. When such evaluation results in a deficiency, the asset is written down
to its estimated fair value.</font></p>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Accrued
Network Costs</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued network costs represent an
estimate for cost of network services received from third party
telecommunications companies related to its United States operations for which
WorldxChange has not been invoiced. The estimates are based upon vendor
contract rates and actual minutes utilized per WorldxChange&#146;s records.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Stock-Based Compensation</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As permitted by SFAS No. 123, <i>Accounting
for Stock&#151;Based Compensation,</i> WorldxChange accounts for compensation
expense under its stock&#151;based compensation plans in accordance with Accounting
Principles Board Opinion No. 25, <i>Accounting for Stock Issued to Employees</i>.
Pro forma disclosure of net loss, as if the fair value&#151;based method had been
applied in measuring compensation expense, is presented in Note 8.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Revenue Recognition</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue is recognized as long
distance telecommunications services are provided. Prepaid calling card revenue
is reported net of selling discounts and recorded when minutes are used.
Deferred revenue relates to amounts received from or billed to customers prior
to WorldxChange providing telecommunications services. For the years ended
September 30, 1998, 1999 and 2000, telecommunication services sold to
unconsolidated majority-owned foreign subsidiaries were $36,969,000,
$42,144,000 and $45,651,000, respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Cost of Services</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of services is exclusive of
depreciation and amortization related to the services network which is included
in &#147;Depreciation and amortization&#148; presented separately in the consolidated
statements of operations. For the years ended September 30, 1998, 1999 and
2000, purchases of telecommunication services from unconsolidated
majority-owned foreign subsidiaries were $35,830,000, $19,777,000 and
$20,157,000, respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Advertising</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange charges advertising
costs to expense as the costs are incurred. Total advertising expense for the
United States operations was $11,675,000, $15,812,000 and $8,599,000, for the
years ended September 30, 1998, 1999 and 2000, respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Use of Estimates</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States&nbsp; requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.</font></p>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Fair Values
of Financial Instruments</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange believes that the
carrying amounts of its cash, cash equivalents, accounts receivable, accrued
networks costs, accounts payable, accrued liabilities, long-term debt and
capital lease obligations approximate their fair values due to their short-term
nature or variable interest rates.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>New Accounting Standards</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In June 1998, the Financial
Accounting Standards Board (&#147;FASB&#148;) issued SFAS No. 133, <i>Accounting for Derivative Instruments
and Hedging Activities. </i>In May 1999, the FASB voted to delay the
effective date of SFAS No. 133 by one year. The Company adopted SFAS 133 for
fiscal year 2001.&nbsp; This statement
establishes a new model for accounting for derivatives and hedging activities.
Under SFAS No. 133, all derivatives must be recognized as assets and
liabilities and measured at fair value.&nbsp;
The adoption of SFAS No. 133 has not had a significant impact on
WorldxChange&#146;s consolidated financial position or results of operations.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Reclassifications</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certain prior period amounts have
been reclassified to conform with the current period presentation.</font></p>

<p><b><font size=2>3.
Acquisitions</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In December 1998, WorldxChange
completed a business combination with CTS Telcom, Inc., an affiliate, with
operations in the United States, under common ownership and management control,
which has been accounted for in a manner similar to a pooling-of-interests. No
consideration was paid for the acquisition of CTS Telcom. The accompanying
consolidated financial statements are derived from the combined historical
financial statements of CTS Telcom and WorldxChange. All significant
intercompany accounts and transactions have been eliminated.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net revenues and net loss for
fiscal 1998, by entity, are as follows (in thousands):</font></p>

<p><font size=2>&nbsp;</font></p>

<dir><dir><dir>
<table border=0 cellspacing=0 cellpadding=0 width="67%">
 <tr>
  <td  align=center width="53%" valign=bottom>&nbsp;</td>
  <td  align=center width="21%" colspan=2 valign=bottom><b><font   size=2>Net<br>
  Revenues</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=3 valign=bottom><b><font   size=2>Net<br>
  Loss</font></b></td>
  <td  align=center width="5%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="53%" valign=bottom>&nbsp;</td>
  <td  align=center width="21%" colspan=2 valign=bottom><div align=right><b><font   size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=3 valign=bottom><div align=right><b><font   size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="5%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="53%" valign=bottom bgcolor="#cceeff"><font   size=2>WxC</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font   size=2>$</font></td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font size=2>340,792</font></td>
  <td  align=right width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>(25,354</font></td>
  <td width="5%" valign=bottom bgcolor="#cceeff"><font   size=2>)</font></td>
 </tr>
 <tr>
  <td width="53%" valign=bottom><font   size=2>CTS
  Telcom</font></td>
  <td  align=right width="21%" colspan=2 valign=bottom><font size=2>16,343</font></td>
  <td width="2%" valign=bottom><font   size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=3 valign=bottom><font size=2>(2,099</font></td>
  <td width="5%" valign=bottom><font   size=2>)</font></td>
 </tr>
 <tr>
  <td width="53%" valign=bottom bgcolor="#cceeff"><font size=2>Eliminations</font></td>
  <td  align=right width="21%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>(2,604</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="17%" colspan=3 valign=bottom bgcolor="#cceeff"><font   size=2>&#151;</font></td>
  <td width="5%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="53%" valign=bottom>&nbsp;</td>
  <td  align=right width="21%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=3 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="5%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="53%" valign=bottom><font size=2>Combined</font></td>
  <td width="2%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="18%" valign=bottom><font size=2>354,531</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="3%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=2>(27,453</font></td>
  <td width="5%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="53%" valign=bottom>&nbsp;</td>
  <td  align=right width="21%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=3 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="5%" valign=bottom>&nbsp;</td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=210></td>
  <td width=9></td>
  <td width=74></td>
  <td width=10></td>
  <td width=15></td>
  <td width=1></td>
  <td width=52></td>
  <td width=21></td>
 </tr>
</table>
</dir></dir></dir>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On November 4, 1999, WorldxChange
acquired the outstanding shares of certain European subsidiaries of ACC
Corporation (&#147;ACC&#148;), a subsidiary of AT&amp;T. The operations of these
subsidiaries are located in the United Kingdom, Germany, France and Italy. As
part of this transaction, WorldxChange also acquired from ACC a switch located
in the United States and certain indefeasible rights of use of a transatlantic
telecommunications cable system. The $113 million purchase price for this
transaction was comprised of $60 million cash and a $53 million, 12% per annum
interest rate note due on or before December 28, 2000. The acquisition resulted
in excess purchase price over the fair value of the net assets acquired of
approximately $75.2 million allocated to goodwill and customer base based on
management&#146;s estimates. Goodwill is being amortized on a straight-line basis
over twenty years and the customer base is being amortized over five years. For
the purpose of these financial statements for the United States operations of
WorldxChange, the operating results of this purchase transaction have been
excluded from operations with the net loss shown as &#147;Loss from majority-owned
unconsolidated foreign subsidiaries.&#148;</font></p>

<page>


<p><font size=1><br>
</font><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange
financed $50 million of the cash payment through the issuance in November 1999
of 50,000 shares of Series B Convertible Preferred Stock to two existing
shareholders for $50 million. The Series B Convertible Preferred Stock has a
liquidation preference of $1,000 per share. In May 2000, the Series B
Convertible Preferred Stock was converted into 5,555,550 shares of common
stock.</font></p>

<p><b><font size=2>4.
Balance Sheet Information</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Sale of Accounts Receivable with Recourse</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange sold certain of its
receivables related to its operations in the United States, subject to full
recourse provisions, to Zero Plus Dialing Incorporated (ZPDI), one of
WorldxChange&#146;s providers of billing and collection services. At September 30,
1999 the outstanding balance of such accounts for which WorldxChange is
contingently liable was approximately $1,962,000. No amounts were outstanding
under this arrangement at March 31, 2001 or&nbsp;
September 30, 2000.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Equipment and Leasehold Improvements</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equipment and leasehold
improvements related to WorldxChange&#146;s United States operations consist of the
following (in thousands):</font></p>

<p><font size=2>&nbsp;</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="92%">
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>March
  31,</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="30%" colspan=5 valign=bottom><b><font size=2>September
  30,</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=center><b><font size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="30%" colspan=5 valign=bottom><div align=center><b><font size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>2001</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>1999</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=center><b><font size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=center><b><font size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=center><b><font size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>(unaudited)</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=bottom bgcolor="#cceeff"><font size=2>Telecommunications
  equipment and cables</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>135,118</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>134,325</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>101,972</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom><font size=2>Computer equipment and
  software</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>22,873</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>19,767</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>12,377</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom bgcolor="#cceeff"><font size=2>Office furniture,
  equipment and vehicles</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>8,970</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>8,947</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>8,219</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom><font size=2>Leasehold improvements</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>2,118</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>2,082</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>2,062</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom bgcolor="#cceeff"><font size=2>Equipment in progress</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>&#150;</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>&#150;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>9,118</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td  align=right width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>169,079</font></td>
  <td  align=right width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>165,121</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>133,748</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom bgcolor="#cceeff"><font size=2>Accumulated
  depreciation and amortization</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>(65,407</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>(56,446</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>(37,873</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>103,672</font></td>
  <td  align=right width="3%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>108,675</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>95,875</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td  align=right width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
</table>
</dir>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Telecommunications equipment and
cables include eight indefeasible rights of use in cable systems related to
WorldxChange&#146;s United States operations amounting to $60,891,000 and
$41,892,000 and ownership interests in international cables related to
WorldxChange&#146;s United States operations amounting to $17,140,000 and
$15,605,000 at September 30, 2000 and 1999, respectively. As of March 31, 2001,
WorldxChange had indefeasible rights of use in cable systems amounting to
$60,450,000 and ownership interests in international cables amounting to
$17,265,000. These assets are amortized over the life of the agreements of 15
to 20 years.</font></p>

<page>


<p><b><font size=2>5. Debt</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt consists of the following (in thousands): </font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="93%">
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>March
  31,</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="29%" colspan=5 valign=bottom><b><font size=2>September
  30,</font></b></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=center><b><font   size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="29%" colspan=5 valign=bottom>
<hr size=1 width="100%" noshade color=black align=center></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font   size=2>2001</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="12%" colspan=2 valign=bottom><b><font size=2>1999</font></b></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=center><b><font size=2><hr size=1 width="100%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=center></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=center></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>(unaudited)</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="12%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Loan and security
  agreement payable upon collections of accounts receivable with interest
  payable monthly at prime rate plus 1.75% (11.25% at September 30, 2000) and
  prime plus 2.75% (11.00% at September 30, 1999)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font   size=2>30,000</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>24,221</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Unsecured subordinated
  note balance due December 2000 with interest payable at maturity of 12%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>53,000</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Secured subordinated
  note, balance due November 2000 with interest payable quarterly at 12.5%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>32,950</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>45,200</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>45,200</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Unsecured note due
  February 2002 with varying monthly principal payments from $300,000 to
  $1,250,000. The unpaid principal bears interest at 13.0%, which is payable at
  maturity</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>7,624</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>15,101</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Term loan due October
  2000, with principal reductions of $300,000 due monthly and interest payable
  monthly at prime plus 5.00% (14.5% at September 30, 2000) and prime plus
  6.75% (15.00% at September 30, 1999)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>2,900</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>4,600</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Term loan due February
  2001 with interest payable at a per annum rate equal to 11.0%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>35,732</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Note payable due March
  2004, with principal and interest payments payable in monthly installments of
  $184,000 at 12.00%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>5,397</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>6,148</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>7,521</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Notes payable due June
  2004 to March 2005, with aggregate monthly principal and interest payments at
  12% due in monthly installments of $355,000 at September 30, 2000 and
  $197,000 at September 30, 1999</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>15,359</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>16,932</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>8,693</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Note payable due May
  2004, with principal and interest payments payable in monthly installments of
  $323,000 at 11.5%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>10,457</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>11,326</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>13,742</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Note payable due
  August 2004, with principal and interest payments payable in monthly
  installments of $73,000 at 11.5%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>2,522</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>2,714</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>3,247</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Note payable due June
  2004, with principal and interest payments payable in monthly installments of
  $57,000 at 10%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>1,884</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>2,084</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>2,568</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Note Payable due June
  2002 with quarterly payments of $67,000</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>358</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>499</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff"><font size=2>Note payable due May
  2004 with principal and interest payments made payable in monthly
  installments of $93,000 at 11%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>2,707</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>3,104</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Secured and unsecured
  notes, with principal and interest payments payable in quarterly
  installments, maturing at various dates through June 2002. Interest rates
  ranging from 10% to 14.25%</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>81</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>190</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td  align=right width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>79,258</font></td>
  <td  align=right width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>224,821</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>109,982</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom><font size=2>Less current portion</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font   size=2>(51,007</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font   size=2>(190,394</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="12%" colspan=2 valign=bottom><font   size=2>(9,767</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td  align=right width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="52%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>28,251</font></td>
  <td  align=right width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font   size=2>34,427</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>100,215</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="52%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td  align=right width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
</table>
</dir>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In March
1997, WorldxChange entered into a credit facility, which consists of an
accounts receivable-based revolving credit facility and a term loan. In
February and May 2000, the credit facility was amended to increase the maximum
borrowing capacity, add a bridge loan, extend the maturity date of the
revolving credit agreement and term loan and reduce the interest rate charge.
The amended credit facility allows WorldxChange to borrow up to a maximum of
$80.0 million, subject to certain restrictions and borrowing base limitations.
The maximum available borrowing base under the revolving credit agreement is
$30.0 million and is determined as a specified percentage of eligible accounts
receivable. The balance outstanding on the revolving credit agreement is
reduced by the application of payments received on collections of accounts
receivable. The accounts receivable revolving credit facility had an
outstanding balance of approximately $30.0 million at September 30, 2000. This
facility bears interest at the prime rate plus 1.75% and is repaid through
collections of accounts receivable. The term loan was issued in the amount of
$5.0 million, which at September 30, 2000 had an outstanding balance of
approximately $2.9 million, bears interest at the prime rate plus 5.00% and
requires monthly reductions of principal of $300,000 plus interest. The bridge
loan has a maximum borrowing availability of $45.0 million, bears interest at
11% and matures on February 11, 2001. The maturity date may be extended until
October 1, 2003 by the bridge loan participant. As part of the amended
agreement and the WorldxChange merger agreement, World Access agreed to
participate in the bridge loan and agreed to fund the $45.0 million under the
agreement. As of September 30, 2000, the outstanding balance on the bridge loan
was $35.7 million and $9.3 million was available for borrowing. In total, as of
September 30, 2000, WorldxChange had $68.6 million borrowed under the credit
facility and $9.3 million available for borrowing. In November 2000, all
outstanding amounts owed under this arrangement were paid off by World Access
and the borrowing agreement was terminated. This transaction increased the
amount WorldxChange owes to World Access.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From May through August 1998,
WorldxChange issued and sold subordinated promissory notes in the aggregate
principal amount of $55.0 million. These notes bear interest at 12.5% per
annum, provide for quarterly payments of interest only and mature on November
30, 2000. These notes provide the lender the right to require WorldxChange to
use a portion of the net proceeds from any private placement or public offering
of WorldxChange&#146;s common stock to repay the notes. As of September 30, 1999 and
2000 the outstanding balance was $45,200,000.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition, WorldxChange also
issued a promissory note in August 1998 in the amount of $1.2 million
representing accrued interest on the subordinated promissory notes. This note
bears interest at the rate of 10.0% per annum, provides for quarterly payments
of interest only and matures on November 30, 2000. In accordance with the terms
of the note, this balance was repaid out of the proceeds of the private
placement equity offerings.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In July 1999, WorldxChange entered
into an indefeasible right of use agreement to lease capacity in a
transatlantic telecommunications cable system for $4,000,000. At September 30,
2000 the outstanding balance related to this agreement was $3,104,000.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In October 1998, WorldxChange
entered into an indefeasible right of use agreement to lease capacity in a
transatlantic telecommunications cable system for $8,250,000. The purchase was
vendor financed with a note that bears interest at 12.0% per annum and provides
for monthly payments of principal and interest. WorldxChange&#146;s obligations
under this agreement are secured by a first-priority security interest in the
leased capacity. At September 30, 2000 and 1999, the outstanding balances
related to this agreement were $6,148,000 and $7,521,000, respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In February 1999, WorldxChange
entered into an indefeasible right of use agreement to lease capacity in a
nationwide fiber optic communications system. The initial fee for each capacity
segment is calculated based on mileage between cities, as defined per the
agreement. This purchase was vendor financed with notes that bear interest at
12.0% per annum and provide for payments in equal monthly installments of
principal and interest. At September 30, 2000 and 1999, the outstanding
balances related to this agreement were $16,932,000 and $8,693,000
respectively.</font></p>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In March
1999, WorldxChange entered into an indefeasible right of use agreement to lease
capacity in a nationwide telecommunications network. Pursuant to this
agreement, WorldxChange signed notes payable to the vendor for the purchase
price. These notes bear interest at 11.5% per annum and provide for monthly
payments of principal and interest. WorldxChange&#146;s obligations under this
agreement are secured by a security interest in the leased capacity. At
September 30, 2000 and 1999, the aggregate outstanding balances were
approximately $14,040,000 and $16,989,000, respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In June 1999, WorldxChange entered
into an indefeasible right of use agreement to lease capacity in a fiber optic
communications system for $2,969,000. The purchase was vendor financed with a
note that bears interest at 10.0% per annum and provides for payments in equal
monthly installments of principal and interest, which are inclusive of all
operation and maintenance fees. At September 30, 2000 and 1999, the outstanding
balances related to this agreement were $2,084,000 and $2,568,000 respectively.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In January 2000, WorldxChange
negotiated payment terms with a network provider to finance outstanding
invoices payable to the carrier.&nbsp; Under
the terms of the agreement, the Company agreed to pay to the carrier a total of
$24.1 million for services through August 31, 1999.&nbsp; Payments in the aggregate of $4.3 million were due and payable in
monthly installments through September 30, 2000 and the remainder is payable in
monthly installments of $1.25 million beginning October 2000.&nbsp; At September 30, 2000, $15.1 million remains
outstanding and bears interest at 13% per annum.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Maturities of long-term debt as of
September 30, 2000 are as follows (in thousands):</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="83%">
 <tr>
  <td width="74%" colspan=2 valign=bottom><b><font size=2>Year Ending September 30,</font></b></td>
  <td  align=center width="25%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom><div><b><font size=2><hr size=1 width="72%" noshade color=black align=left></font></b></div></td>
  <td  align=center width="25%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>2001</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="23%" valign=bottom bgcolor="#cceeff"><font size=2>190,394</font></td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom><font size=2>2002</font></td>
  <td  align=right width="25%" colspan=2 valign=bottom><font size=2>12,315</font></td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>2003</font></td>
  <td  align=right width="25%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>12,010</font></td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom><font size=2>2004</font></td>
  <td  align=right width="25%" colspan=2 valign=bottom><font size=2>9,135</font></td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>2005</font></td>
  <td  align=right width="25%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>967</font></td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="25%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
 </tr>
 <tr>
  <td width="5%" valign=bottom>&nbsp;</td>
  <td width="69%" valign=bottom><font size=2>Total</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="23%" valign=bottom><font size=2>224,821</font></td>
 </tr>
 <tr>
  <td width="74%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="25%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=27></td>
  <td width=333></td>
  <td width=7></td>
  <td width=114></td>
 </tr>
</table>
</dir>

<p><b><font size=2>6.
Commitments and Contingencies</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Leases</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange leases its primary
operating facilities in the United States under noncancellable operating leases
which expire at various dates through March 2015. Certain of these leases
contain escalation clauses based on inflation or fixed amounts and the leases
generally require WorldxChange to pay utilities, insurance, taxes and other
operating expenses. Rental expense under such leases was $3,273,000, $2,235,000
and $2,173,000, respectively, for the years ended September 30, 2000, 1999 and
1998.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange leases its switches
and certain other telecommunication and computer equipment under capital leases,
most of which contain bargain or fair market value purchase options. At
September 30, 2000 and 1999 assets acquired under these leases have an original
cost of $82,228,000 and $52,929,000, respectively, and accumulated amortization
of $31,751,000 and $14,700,000, respectively. The amortization of these assets
is included with depreciation and amortization expense presented in the
Consolidated Statements of Operations.</font></p>

<page>


<p>&nbsp;</p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Future minimum payments for capital
leases and noncancellable operating leases related to WorldxChange&#146;s United
States operations with initial or remaining terms of one year or more as of
September 30, 2000 are as follows (in thousands):</font></p>

<p><font size=2>&nbsp;</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="90%">
 <tr>
  <td width="63%" valign=bottom><b><font size=2>Year Ending September 30,</font></b></td>
  <td  align=center width="16%" colspan=2 valign=bottom><b><font size=2>Capital<br>
  Leases</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="16%" colspan=2 valign=bottom><b><font size=2>Operating<br>
  Leases</font></b></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom><div><b><font size=2><hr size=1 width="90%" noshade color=black align=left></font></b></div></td>
  <td  align=center width="16%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="16%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom bgcolor="#cceeff"><font size=2>2001</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>13,825</font></td>
  <td  align=center width="3%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>1,404</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom><font size=2>2002</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>12,777</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>1,255</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom bgcolor="#cceeff"><font size=2>2003</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>7,652</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>272</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom><font size=2>2004</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>3,715</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>146</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom bgcolor="#cceeff"><font size=2>2005</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>6</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>146</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom><font size=2>Thereafter</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>&#150;</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>733</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom bgcolor="#cceeff"><font size=2>Total minimum lease
  payments</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>37,975</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>3,956</font></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
 </tr>
 <tr>
  <td width="63%" valign=bottom><font size=2>Less amount
  representing interest</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>(4,737</font></td>
  <td width="3%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="63%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="63%" valign=bottom bgcolor="#cceeff"><font size=2>Present value of
  minimum lease payments</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>33,238</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="63%" valign=bottom><font size=2>Less current portion</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>(10,854</font></td>
  <td width="3%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="63%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="63%" valign=bottom bgcolor="#cceeff"><font size=2>Amounts due after one
  year</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>22,384</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="63%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
 </tr>
</table>
</dir>

<p><font size=2>Future
minimum commitments related to the unconsolidated foreign operations of
WorldxChange for the capital and operating leases totaling $11,006,000 and
$10,826,000 respectively, have been excluded from the above table.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Commitments for Undersea Cable and Land-based Fiber
Optic Cable Systems</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange has entered into three
agreements to increase its ownership of undersea cables. These commitments are
expected to require incremental capital expenditures of approximately $18.0
million.&nbsp; Of this balance, $4.0 million
will be vendor financed at 11% interest, with monthly principal and interest
payments over a four year amortization period.&nbsp;
The remaining $14.0 million will be paid in installments of $6.8 million
upon service delivery date and payments of $3.0 million and $4.2 million on the
1<sup>st</sup> and 2<sup>nd</sup> anniversaries of the service delivery dates,
respectively.&nbsp; As of September 30, 1999
and 2000 these obligations remain outstanding.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange entered into an
agreement during the year ended September 30, 1999 to acquire $25.0 million of
capacity in land-based fiber optic cable systems. The vendor has agreed to
finance 90% of the commitment at 12% interest, with monthly principal and
interest payments over a five year amortization period. At September 30, 2000,
a commitment of $3.2 million remained under this obligation. Also, as of this
date, total outstanding indebtedness totaled $16.9 million.</font></p>

<p><b><font size=2>7.
Income Taxes</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes are provided for in
accordance with the provisions of FASB Statement No. 109, <i>Accounting for Income Taxes</i>.
Under this method, WorldxChange recognizes deferred tax assets and liabilities
for the expected future tax effects of temporary differences between the carrying
amounts and the tax bases of assets and liabilities, as well as operating loss
carryforwards.</font></p>

<p><font size=2>The
significant components of WorldxChange&#146;s deferred tax assets and liabilities
related to the operations in the United States as of September 30, 2000 and 1999
are shown below (in thousands). At September 30, 2000, a valuation allowance of
$95,568,000 has been recorded as realization of such net deferred assets is
uncertain.</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="92%">
 <tr>
  <td  align=center width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="39%" colspan=5 valign=bottom><b><font size=2>September 30,</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="39%" colspan=5 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="19%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><b><font size=2>1999</font></b></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="19%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Deferred tax assets:</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="54%" valign=bottom><font size=2>U.S. net operating
  loss carryforward</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="18%" valign=bottom><font size=2>89,384</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>39,286</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="54%" valign=bottom bgcolor="#cceeff"><font size=2>Accrued liabilities
  and reserves</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>7,101</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>4,263</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="19%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Deferred tax
  liabilities:</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="54%" valign=bottom><font size=2>Depreciation and
  amortization</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom><font size=2>(913</font></td>
  <td width="3%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom><font size=2>(1,153</font></td>
  <td width="3%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="54%" valign=bottom bgcolor="#cceeff"><font size=2>Other</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(4</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>199</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="19%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom><font size=2>Net deferred tax
  assets</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom><font size=2>95,568</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom><font size=2>42,595</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Deferred tax assets
  valuation allowance</font></td>
  <td  align=right width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(95,568</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(42,595</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="19%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="18%" valign=bottom><font size=2>&#150;</font></td>
  <td  align=right width="3%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>&#150;</font></td>
  <td width="3%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="56%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td  align=right width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="3%" valign=bottom>&nbsp;</td>
 </tr>
</table>
</dir>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At September 30, 2000 and 1999,
WorldxChange had net operating loss carryforwards available for federal and
state tax purposes of approximately $239,212,000 and $101,765,000,
respectively. The federal tax loss carryforwards will begin expiring in 2007,
unless previously utilized. The state tax loss carryforwards continue expiring
in 2000 and will continue to expire through 2003, unless previously utilized.
Other foreign loss carryforwards which related to the unconsolidated foreign
subsidiaries have not been shown in the above tables. The realization of future
domestic benefits from net operating loss carryforwards may be limited under
Section 382 of the Internal Revenue Code if certain cumulative changes occur in
WorldxChange&#146;s ownership.</font></p>

<p><b><font size=2>8.
Shareholders&#146; Deficit</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Common Stock</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In September 1998, WorldxChange
completed a private placement for the issuance of 1,659,214 shares of common
stock. WorldxChange issued 788,127 shares of common stock in September 1998 for
$10,000,000. The remaining 871,087 shares of common stock were issued in
December 1998 for another $10,000,000. During fiscal 1999, WorldxChange issued
5,727,000 shares of common stock for proceeds of $60,000,000.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In September 1999, WorldxChange
issued 1,554,763 shares of its common stock in exchange for minority interests
held in certain of its foreign subsidiaries. The acquisition was accounted for
under the purchase method of accounting at a value of $17,102,000, or $11.00
per share. The excess value of the stock issued over the minority interest
balance at September 30, 1999 was recorded as goodwill of $12,194,000 on the
balance sheet of the foreign subsidiary, which is carried on the equity method
of accounting for the purposes of these financial statements. This intangible
asset is being amortized on a straight-line basis over 20 years with the
resulting amortization being included in the net operating activity for the
foreign subsidiaries shown as &#147;Loss from majority-owned unconsolidated foreign
subsidiaries.&#148;</font></p>

<page>


<p>&nbsp;</p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Preferred Stock</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As of September 30, 1998,
WorldxChange had 23 shares of Series A Cumulative Preferred Stock outstanding.
The shares were non-voting and entitled the holders to certain annual cumulative
dividends. During fiscal 1999, all 23 shares were repurchased by WorldxChange.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In August 1999, WorldxChange issued
30,000 shares of Series A Convertible Preferred Stock for $30,000,000. The
holders of the Series A Convertible Preferred Stock are entitled to receive an
annual cash dividend of $40 per share (an aggregate of $1,300,000 and $100,000
at September 30, 2000 and 1999, respectively). The holders of the Series A
Convertible Preferred Stock are entitled to certain antidilution rights and have
liquidation rights senior to those of common shareholders.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each share of Series A Convertible
Preferred Stock is convertible into 90.9091 shares of common stock. The stock
is convertible at the option of the holder six months after issuance provided
WorldxChange has not completed a public offering and no such offering is
pending. The stock is automatically convertible: (i) six months from a
completed registered public offering, provided there has been no other
registered public offering during the course of the six months and no
registered public offering is pending, or (ii) in the event there is no
registered public offering, two years from the date of issuance, provided there
is no registered public offering pending.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In connection with the ACC
acquisition, WorldxChange financed $50 million of the cash payment through the
issuance in November 1999 of 50,000 shares of Series B Convertible Preferred
Stock to two existing shareholders for $50 million. In May 2000 the Series B
stock converted into 5,555,550 shares of common stock.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Stock Options</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange&#146;s 1996 Stock Option
Plan provides for the granting of stock options to purchase, and the issuance
of, up to 3 million shares to employees, non-exempt directors and consultants.
Generally, options are granted at prices at least equal to the fair value of
WorldxChange&#146;s common stock on the date of grant as determined by
WorldxChange&#146;s Board of Directors. In addition, certain officers and directors
have been granted stock options outside the Plan.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pro forma information regarding net
loss is required by SFAS No. 123, and has been determined as if WorldxChange
had accounted for its employee stock options under the fair value method of
that statement. The fair value of these options was estimated at the date of grant
using the minimum value method and the following weighted average assumptions
for fiscal year 1998, 1999 and 2000, respectively: risk free interest rate of
5.25%, 5.75% and 6.43%; expected option life of seven years; and no annual
dividends.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For purposes of pro forma
disclosures, the estimated fair value of the options is amortized to expense
over the vesting period of such options. The effects of applying SFAS 123 for
pro forma disclosure purposes are not likely to be representative of the
effects on pro forma net income or loss in future years because they do not
take into consideration pro forma compensation expenses related to grants made
prior to fiscal 1996. WorldxChange&#146;s pro forma information follows:</font></p>

<p><font size=2>&nbsp;</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="91%">
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>2000</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><b><font size=2>1999</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><b><font size=2>1998</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><b><font size=2>(in thousands)</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=bottom bgcolor="#cceeff"><font size=2>Pro forma net loss
  before preferred stock dividends&#133;&#133;...</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font size=2>(163,781</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff"><font size=2>(65,016</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(28,176</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=266></td>
  <td width=7></td>
  <td width=64></td>
  <td width=9></td>
  <td width=7></td>
  <td width=85></td>
  <td width=13></td>
  <td width=7></td>
  <td width=63></td>
  <td width=9></td>
 </tr>
</table>
</dir>

<page>


<p>&nbsp;</p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A summary of WorldxChange&#146;s stock
option activity, including those issued outside of the plans and related
information are as follows:</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="34%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" valign=bottom><b><font size=2>Shares<br>
  Available<br>
  for Grant</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" valign=bottom><b><font size=2><br>
  Number<br>
  of Shares</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="15%" colspan=2 valign=bottom><b><font size=2><br>
  Price<br>
  per Share</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
  <td  align=center width="16%" colspan=2 valign=bottom><b><font size=2>Weighted-<br>
  Average<br>
  Exercise Price</font></b></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Balance as of October
  1, 1997</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>712,566</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>2,197,434</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>0.42-$7.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>2.84</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="31%" valign=bottom><font size=2>Additional shares
  reserved</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>1,008,166</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="15%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="31%" valign=bottom bgcolor="#cceeff"><font size=2>Grants</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(1,377,453</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>1,377,453</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>7.00-$10.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>9.67</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="31%" valign=bottom><font size=2>Exercises</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(54,425</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=2>0.67-$7.00</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>0.72</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="31%" valign=bottom bgcolor="#cceeff"><font size=2>Cancellations</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>320,162</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(320,162</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>4.33-$5.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>5.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Balance as of
  September 30, 1998</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>663,441</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>3,200,300</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>0.42-$10.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>5.73</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="31%" valign=bottom><font size=2>Additional shares
  reserved</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>4,000,000</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="15%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="31%" valign=bottom bgcolor="#cceeff"><font size=2>Grants</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(1,273,752</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>1,273,752</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>10.00-$11.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>10.34</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="31%" valign=bottom><font size=2>Exercises</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(236,239</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=2>0.67-$11.00</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>6.98</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="31%" valign=bottom bgcolor="#cceeff"><font size=2>Cancellations</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>495,391</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(495,391</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>5.00-$10.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>9.06</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Balance as of
  September 30, 1999</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>3,885,080</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>3,742,422</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>0.42-$11.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>6.85</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="31%" valign=bottom><font size=2>Grants</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(1,574,081</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>1,574,081</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=2>3.52-$13.00</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>7.43</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="31%" valign=bottom bgcolor="#cceeff"><font size=2>Exercises</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>&#151;</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(92,486</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>0.42-$10.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>3.80</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="31%" valign=bottom><font size=2>Cancellations</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>1,163,158</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(1,163,158</font></td>
  <td width="2%" valign=bottom><font size=2>)</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=2>5.00-$13.00</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>9.79</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Balance as of September
  30, 2000</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>3,474,157</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>4,060,859</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>0.42-$13.00</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>6.29</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="34%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
</table>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The following table summarizes
significant ranges of outstanding and exercisable options at September 30,
2000:</font></p>

<div align=center>


<table border=0 cellspacing=0 cellpadding=0 width="95%">
 <tr>
  <td  align=center width="16%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="48%" colspan=6 valign=bottom><b><font size=2>Outstanding
  Options</font></b></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="31%" colspan=4 valign=bottom><b><font size=2>Options
  Exercisable</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="16%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=center width="48%" colspan=6 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="31%" colspan=4 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="16%" colspan=2 valign=bottom><b><font size=2><br><br>
  Range of<br>
  Exercise Prices</font></b></td>
  <td  align=center width="11%" valign=bottom><b><font size=2><br><br><br>
  Shares</font></b></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" valign=bottom><b><font size=2>Weighted<br>
  Average<br>
  Remaining Life<br>
  in Years</font></b></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><b><font size=2>Weighted<br>
  Average<br>
  Exercise<br>
  Price</font></b></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" valign=bottom><b><font size=2>Shares</font></b></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><b><font size=2>Weighted<br>
  Average<br>
  Exercise<br>
  Price</font></b></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="16%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="11%" valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="17%" colspan=2 valign=bottom><div align=right><b><font size=2><hr size=1 width="100%" noshade color=black align=right></font></b></div></td>
  <td  align=center width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>0.42-$3.52</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>1,131,575</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" valign=bottom bgcolor="#cceeff"><font   size=2>3.96</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff"><font   size=2>1.16</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font   size=2>950,975</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>0.71</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>3.62-$6.80</font></td>
  <td  align=right width="11%" valign=bottom><font   size=2>1,162,833</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" valign=bottom><font   size=2>8.04</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom><font   size=2>5.45</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" valign=bottom><font   size=2>502,317</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom><font   size=2>5.14</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>7.00-$10.00</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>1,221,572</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" valign=bottom bgcolor="#cceeff"><font   size=2>8.10</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>9.66</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font   size=2>604,905</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom bgcolor="#cceeff"><font   size=2>9.47</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>11.00-$13.00</font></td>
  <td  align=right width="11%" valign=bottom><font   size=2>544,880</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" valign=bottom><font   size=2>8.98</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom><font   size=2>11.22</font></td>
  <td width="0%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" valign=bottom><font   size=2>117,117</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
  <td  align=right width="17%" colspan=2 valign=bottom><font   size=2>11.20</font></td>
  <td width="2%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font   size=2>4,060,860</font></td>
  <td  align=right width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="17%" valign=bottom bgcolor="#cceeff"><font   size=2>7.05</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff"><font   size=2>6.29</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font   size=2>2,175,314</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>4.73</font></td>
  <td width="2%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td  align=right width="16%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="17%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="2%" valign=bottom>&nbsp;</td>
 </tr>
</table>


</div>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The weighted average fair value at
date of grant for options granted during fiscal 1998, 1999 and 2000 were $1.88,
$2.52 and $3.65 per share, respectively.</font></p>

<p><b><font size=2>9.
Related Party Transactions</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <i>Affiliated Long Distance Companies</i></font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In fiscal 1996, WorldxChange began
utilizing long distance services from four affiliated companies owned by a
relative of WorldxChange&#146;s officers/shareholders. Billings by the four
affiliates for long distance services provided to WorldxChange were
approximately $5,409,000 and $1,705,000 for the years ended September 30, 1998
and 1999, respectively. Effective January 1999, WorldxChange terminated the
agreements with these affiliates.</font></p>

<page>


<p><br>
<b><font size=2>10.
Savings Plan</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In January 1996, WorldxChange
adopted a 401(k) Savings Plan covering substantially all employees that have
been employed for at least one year and meet other age and eligibility
requirements. Participants may elect to contribute up to six percent of their
compensation. WorldxChange matches 25% of participant contributions.
WorldxChange&#146;s matching contribution totaled $82,000, $100,000 and $116,000
during the years ended September 30, 1998, 1999 and 2000, respectively.</font></p>

<p><b><font size=2>11.
Litigation and Regulation</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange is required under
federal law and regulations to file tariffs showing rates, terms and conditions
affecting its services. WorldxChange has filed interstate long distance tariffs
with the FCC. The FCC has adopted an order that, with certain exceptions,
rescinds the requirement that carriers such as WorldxChange maintain FCC
tariffs and mandates that tariffs be withdrawn. The FCC stayed its order
pending judicial review. If tariffs are eliminated, it will probably be
necessary for WorldxChange to secure contractual agreements with its customers
providing for many of the terms of its existing tariffs. Absent tariffs and contracts,
WorldxChange believes that disputes could arise concerning the respective
rights of WorldxChange and its customers, which could hinder WorldxChange&#146;s
ability to collect its accounts receivable, increase WorldxChange&#146;s overall bad
debt losses and collection expenses, and increase WorldxChange&#146;s exposure to
unlimited damage claims. The FCC has not proposed to change its requirements
that tariffs for international services be filed, and WorldxChange continues to
file such tariffs.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The intrastate long distance
operations of WorldxChange are also subject to various state laws. The majority
of states require certification or registrations. WorldxChange has secured the
ability to offer intra-state service in forty-one states. Many states require
tariff filing as well.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WorldxChange has been successful in
obtaining all necessary regulatory approvals to date, although revision of
tariffs, authorities and approvals are being made on a continuing basis and
many such requests are pending at any one time.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Some states may assess penalties on
long distance service providers for traffic sold prior to tariff approval. Such
states may require refunds to be made to customers. It is the opinion of
management that such penalties and refunds, if any, would not have a material
adverse effect on the consolidated results of operations, financial position or
liquidity of WorldxChange.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In May 1997, the California Public
Utilities Commission issued an order, which became effective in October 1997,
revoking WorldxChange&#146;s Certificate of Public Convenience and Necessity in
California and imposing certain other fines and penalties against WorldxChange
based on the California Public Utilities Commission&#146;s findings that
WorldxChange violated California laws and regulations requiring WorldxChange to
obtain prior consumer authorization before switching consumers&#146; long distance
carriers. As a result of the revocation for WorldxChange&#146;s Certificate of
Public Convenience and Necessity, WorldxChange cannot provide intrastate
telecommunication services in California. In addition, WorldxChange must, among
other things, (i) pay a $19.6 million fine to the state of California, $2
million of which has been paid with the balance suspended so long as
WorldxChange is not found to have committed any future violations of California
law or California Public Utilities Commission directives; (ii) reimburse the
California Public Utilities Commission for $100,000 in prosecution costs which
has also been paid; and (iii) pay approximately $1.9 million in reparations to
consumers, of which $1,211,000 was payable at September 30, 1999 with no
remaining amounts outstanding at September 30, 2000.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Under the California Public
Utilities Commission&#146;s order, the suspension of WorldxChange&#146;s Certificate of
Public Convenience and Necessity and the other sanctions and fines imposed on
WorldxChange are binding on any successor of WorldxChange. WorldxChange may
apply to the California Public Utilities Commission for reinstatement of the
Certificate of Public Convenience and Necessity after October 22, 2000,
although there can be no assurance that such reinstatement would be granted.</font></p>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In
addition, WorldxChange is subject to certain legal, regulatory and
administrative proceedings, claims and inquiries arising in the ordinary course
of business, some of which involve claims for substantial amounts of damages.
The ultimate outcome of such proceedings, claims or inquiries cannot be
predicted at this time. It is management&#146;s opinion, after consultation with its
legal counsel, that any such liability or possible restrictions placed on
WorldxChange&#146;s operations resulting from the ultimate resolution of such
proceedings, claims, and inquiries, beyond that provided, would not have a
material effect on WorldxChange&#146;s consolidated financial position or
WorldxChange&#146;s future consolidated results of operations or cash flows related
to its operations in the United States.</font></p>

<p><b><font size=2>12.
Merger and Management Services Agreements with World Access</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In February 2000, WorldxChange
executed a definitive merger agreement with World Access, Inc. (&#147;World
Access&#148;). On August 1, 2000, WorldxChange entered into an Executive Management
Services Agreement (&#147;Management Agreement&#148;) with World Access. Under this
agreement, World Access serves as the exclusive agent for WorldxChange to
provide all management services required for the operation and management of
WorldxChange. World Access has the authority, to the fullest extent permitted
by law, to take all actions and make all decisions on behalf of WorldxChange in
the operation and management of WorldxChange&#146;s assets and the power to select,
terminate and determine the compensation of the management and employees of
WorldxChange. Under this agreement, World Access has also assumed all financial
responsibility related to the operations of WorldxChange subsequent to August
1, 2000.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As of September 30, 2000,
WorldxChange has net advances due to World Access of $91.0 million. The amounts
comprising this balance and the classification on the September 30, 2000
Consolidated Balance Sheet are as follows (in thousands):</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="84%">
 <tr>
  <td width="82%" valign=bottom bgcolor="#cceeff"><font size=2>Reimbursement from
  World Access of Net Loss under Management Agreement (Accounts payable)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=2>(22,688</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="82%" valign=bottom><font size=2>Secured term loan
  (Current portion of long-term debt)</font></td>
  <td  align=right width="15%" colspan=2 valign=bottom><font size=2>35,732</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="82%" valign=bottom bgcolor="#cceeff"><font size=2>Working capital
  advances (Accounts payable)</font></td>
  <td  align=right width="15%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>77,957</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="82%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="82%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=2>91,001</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="82%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
</table>
</dir>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As a result of World Access
assuming all financial responsibility for WorldxChange, WorldxChange has
recorded the reimbursement of the net loss incurred by WorldxChange since
August 1, 2000 as a single line item, &#147;Reimbursement from World Access of Net
Losses Under Management Agreement,&#148; in its Consolidated Statement of
Operations.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As of September 30, 2000, World
Access and WorldxChange have consolidated their sales forces, billing systems
and network operations centers, as well as decommissioned certain switches as
traffic has migrated from one network to the other.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Consolidated Statement of
Operations for WorldxChange for the two months ended September 30, 2000 while
operating under the Management Agreement consisted of the following (in
thousands):</font></p>

<dir>
<table border=0 cellspacing=0 cellpadding=0 width="80%">
 <tr>
  <td width="81%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Revenue</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>74,031</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom><font size=2>Cost of services</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>55,920</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Selling, general and
  administrative</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>25,842</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom><font size=2>Depreciation and
  network amortization</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>6,808</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Amortization of
  intangibles</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>1,889</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="5%" valign=bottom>&nbsp;</td>
  <td width="75%" valign=bottom><font size=2>Total operating
  expense</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>90,459</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Operating loss</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(16,428</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom><font size=2>Interest and other
  income</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>280</font></td>
  <td width="1%" valign=bottom><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Interest expense</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>(6,511</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom><font size=2>Loss before income
  taxes</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom><font size=2>(22,659</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>Income taxes</font></td>
  <td  align=right width="16%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=2>29</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom><font size=2>Net loss</font></td>
  <td width="1%" valign=bottom><font size=2>$</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(22,688</font></td>
  <td width="1%" valign=bottom><font size=2>)</font></td>
 </tr>
 <tr>
  <td width="81%" colspan=2 valign=bottom>&nbsp;</td>
  <td  align=right width="16%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=27></td>
  <td width=352></td>
  <td width=7></td>
  <td width=71></td>
  <td width=8></td>
 </tr>
</table>
</dir>

<page>


<p><br>
<font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In
February 2000, World Access entered into a participation agreement with a
lender under which WorldxChange can borrow money. In this participation
agreement, the lender is the lead lender and acts as agent for World Access in
dispersing the funds and in administering and collecting the loan. The
participation agreement allows World Access to advance up to $45.0 million to
WorldxChange. The terms of the loan are governed by the terms of an existing
loan agreement between the lender and WorldxChange.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Advances by World Access under the
participation agreement are structured as a term loan which bears interest at a
rate of 11% per annum and matures on February 11, 2001. Both the term loan and
the existing indebtedness under the loan arrangement are secured by a security
interest in all personal property of WorldxChange. Subsequent to September 30,
2000, the borrowings under this loan were repaid by World Access.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As of September 30, 2000,
WorldxChange owed $68.6 million under the loan, including $35.7 million
advanced by World Access. These funds are being used to finance operating losses
expected to be incurred by WorldxChange prior to the merger date as well as to
make permanent investments in working capital that are required to support
WorldxChange&#146;s international expansion.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During December 2000, the
acquisition of WorldxChange by World Access was completed.</font></p>

<p><b><font size=2>13.
Recent Events</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On April 24, 2001, World Access
filed voluntary petitions for Chapter 11 relief in the United States Bankruptcy
Court. On June 4, 2001, I-Link Incorporated, through its wholly-owned
subsidiary WorldxChange Corporation, completed its purchase of certain select
assets employed in the long distance business of WorldxChange as part of a
court supervised sale in the bankruptcy proceedings of World Access, and
assumed or renegotiated certain select contracts associated with the assets
purchased.</font></p>

<page>


<p align=center><br>
<b><font size=2>I-LINK
INCORPORATED<br>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL<br>
STATEMENTS</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
following unaudited pro forma combined condensed financial statements have been
prepared to give effect to the purchase of certain select assets of the United
States operations of Communications Telesystems International d.b.a.
WorldxChange Communications (&#147;Communications&#148;) from a bankruptcy proceeding and
assumption or renegotiation of certain select contracts by I-Link Incorporated
(&#147;I-Link&#148;) through its wholly-owned subsidiary WorldxChange Corporation
(&#147;WorldxChange&#148;) effective June 4, 2001. These unaudited pro forma combined
condensed financial statements have been prepared to also give effect to the
merger of I-Link with WebToTel, Inc (&#147;WebToTel&#148;) and its subsidiary Nexbell
Communications, Inc. (&#147;Nexbell&#148;). Effective March 2001,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I-Link became a majority owned
subsidiary of Counsel Corporation (&quot;Counsel&quot;). The historical
financial statements of I-Link do not reflect the transaction between Counsel
and I-Link. As a result of the transaction, I-Link, WebToTel and Nexbell were
under common control of Counsel at the time of I-Link's acquisition of
WebToTel. This transaction was recorded using book value purchase accounting
(similar to the pooling-of-interests method of accounting).&nbsp; WebToTel acquired Nexbell on February 22,
2001 and accounted for that acquisition using the purchase method of
accounting, the effects of which are reflected in the accompanying pro forma
financial statements.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
unaudited pro forma combined condensed statements of operations for the three
months ended March 31, 2001 combine the historical consolidated statements of
operations of I-Link, WebToTel and Nexbell for the three months ended March 31,
2001 and historical financial statements of Communications for the three months
ended December 31, 2000. The unaudited pro forma combined condensed statements
of operations for the twelve months ended December 31, 2000 combine the
historical consolidated statements of operations of I-Link, WebToTel, and
Nexbell for the twelve months ended December 31, 2000 and historical financial
statements of Communications for the twelve months ended September 30,
2000.&nbsp; Presentation of the unaudited pro
forma statements of operations include the effects of the merger with WebToTel
and acquisition of certain Communications&#146; assets and assumption or
renegotiation of certain select contracts as if the merger and acquisition had
occurred at the beginning of the earliest period presented.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unaudited
pro forma combined condensed financial information is presented for
illustrative purposes only and is not necessarily indicative of the financial
position or results of operations that would have actually been reported had
the merger and acquisition occurred at the beginning of the periods presented,
nor is it necessarily indicative of future financial position or results of
operations. These unaudited pro forma combined condensed financial statements
are based upon the respective historical consolidated financial statements of
I-Link, WebToTel, Nexbell and Communications and notes thereto. These unaudited
pro forma combined condensed financial statements do not incorporate, nor do
they assume, any benefits from cost savings or synergies of operations of the
combined company.</font></p>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr height=21>
  <td  align=center width="100%" nowrap height=21 valign=bottom><a   name=UnauditedProFormaCombinedCondensedStatem><b><font size=2>UNAUDITED PRO FORMA COMBINED
  CONDENSED STATEMENT OF OPERATIONS</font></b></a></td>

 </tr>
 <tr height=21>
  <td  align=center width="100%" nowrap height=21 valign=bottom><font size=2>for
  the quarter ended March 31, 2001</font></td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=center width="9%" colspan=2 valign=bottom><font size=1>I-Link</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom><font size=1>Nexbell</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><font size=1>WebToTel</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="13%" colspan=2 valign=bottom><font size=1>Communications</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom><font size=1>Adjustments</font></td>
  <td  align=center width="4%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom><font size=1>Pro
  Forma</font></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td  align=right width="4%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Revenues:</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="4%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom><font size=1>Telecommunication
  services</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=1>&nbsp;4,127,856</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>&nbsp;800,045</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="12%" valign=bottom><font size=1>&nbsp;36,443,391</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(15,386,265</font></td>
  <td width="4%" valign=bottom><font size=1>)(C)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>&nbsp;25,985,027</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Technology
  licensing and development</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,436,899</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,436,899</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom><font size=1>Other</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>666,583</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>666,583</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>6,231,338</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>800,045</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>36,443,391</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(15,386,265</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>28,088,509</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom><font size=1>Operating costs and expenses:</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Telecommunication
  network expense</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>5,728,641</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,680,501</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>36,058,222</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(16,956,455</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>)(D)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>26,510,909</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom><font size=1>Selling,
  general and administrative</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>3,579,781</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>496,268</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>13,154,646</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>736,813</font></td>
  <td width="4%" valign=bottom><font size=1>(E)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>17,967,508</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Provision
  for doubtful accounts</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>52,283</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>95,063</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>2,682,099</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(1,839,814</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>)(F)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>989,631</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom><font size=1>Depreciation
  and amortization</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>1,484,133</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>41,546</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>6,512,608</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>456,821</font></td>
  <td width="4%" valign=bottom><font size=1>(A)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>8,495,108</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Research
  and development</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,066,758</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,066,758</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="6%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="14%" valign=bottom><font size=1>Total
  operating costs and expenses</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>11,911,596</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>2,313,378</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>58,407,575</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(17,602,635</font></td>
  <td width="4%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>55,029,914</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom><font size=1>Operating loss</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>(5,680,258</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(1,513,333</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>(21,964,184</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>2,216,370</font></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(26,941,405</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom><font size=1>Other income (expense):</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Interest
  expense</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(266,203</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(185,764</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(31,906</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(4,306,084</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>3,432,776</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>(I)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(1,357,181</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom><font size=1>Interest
  and other income</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>29,803</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>2,299</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>(512,274</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(480,172</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="19%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Loss
  on sale of assets</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(50,620</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(50,620</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="6%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="14%" valign=bottom><font size=1>Total
  other income (expense)</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>(236,400</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(234,085</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(31,906</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>(4,818,358</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>3,432,776</font></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(1,887,973</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="6%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="14%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="6%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="14%" valign=bottom bgcolor="#cceeff"><font size=1>Net
  loss</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=1>(5,916,658</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;(1,747,418</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;(31,906</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;(26,782,542</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;5,649,146</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(28,829,378</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=left></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Calculation of net income per common share:</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Net loss</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=1>(5,916,658</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;(1,747,418</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;(31,906</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;(26,782,542</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>5,649,146</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(28,829,378</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Dividends accrued and paid on Class M
  redeemable preferred stock</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(269,027</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(269,027</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom><font size=1>Net effect on retained earnings of redemption
  and reissuance of Class M and N preferred stock, including beneficial
  conversion features</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>15,512,473</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="4%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>15,512,473</font></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Cumulative preferred stock dividends not paid
  in current year</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(10,947</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="4%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(10,947</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="6%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="14%" valign=bottom><font size=1>Income
  (loss) applicable to common stock</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="8%" valign=bottom><font size=1>9,315,841</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>&nbsp;(1,747,418</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>&nbsp;(31,906</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="12%" valign=bottom><font size=1>&nbsp;(26,782,542</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>&nbsp;5,649,146</font></td>
  <td width="4%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(13,596,879</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom><font size=1>Basic and diluted weighted average shares
  outstanding</font></td>
  <td  align=right width="9%" colspan=2 valign=bottom><font size=1>47,079,855</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>17,454,333</font></td>
  <td width="4%" valign=bottom><font size=1>(B)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>64,534,188</font></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Net income (loss) per common share - basic and
  diluted</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="8%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;0.20</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="4%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(0.21</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="21%" colspan=3 valign=bottom>&nbsp;</td>
  <td  align=right width="9%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="13%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="4%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=21 valign=bottom><font size=1>The
  accompanying notes are an integral part of these unaudited proforma combined
  condensed financial statements</font></td>
 </tr>

<!-- DO NOT remove the following table row. It is needed for  .               the proper rendering of tables containing misaligned cells.-->
 <tr height=0>
  <td width=14></td>
  <td width=27></td>
  <td width=84></td>
  <td width=7></td>
  <td width=50></td>
  <td width=9></td>
  <td width=7></td>
  <td width=53></td>
  <td width=11></td>
  <td width=7></td>
  <td width=57></td>
  <td width=10></td>
  <td width=7></td>
  <td width=74></td>
  <td width=11></td>
  <td width=7></td>
  <td width=55></td>
  <td width=24></td>
  <td width=7></td>
  <td width=56></td>
  <td width=2></td>
 </tr>
</table>

<p><font size=1 face=Times>&nbsp;</font></p>

<page>


<p>&nbsp;</p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr height=21>
  <td  align=center width="100%" nowrap height=21 valign=bottom><b><font size=2>UNAUDITED
  PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS</font></b></td>
 </tr>
 <tr height=21>
  <td  align=center width="100%" nowrap height=21 valign=bottom><font size=2>for the year ended
  December 31, 2000</font></td>
 </tr>
</table>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><font size=1>I-Link</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom><font size=1>Nexbell</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom><font size=1>WebToTel</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" colspan=2 valign=bottom><font size=1>Communications</font></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><font size=1>Adjustments</font></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom><font size=1>Pro Forma</font></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td  align=center width="1%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td  align=center width="3%" valign=bottom>&nbsp;</td>
  <td  align=center width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=right></td>
  <td  align=center width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=1>Revenues:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Telecommunication services</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>18,300,548</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>1,455,456</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=1>297,844,628</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>(193,212,192</font></td>
  <td width="3%" valign=bottom><font size=1>)(C)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>124,388,440</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Marketing services</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>463,740</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>463,740</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Technology licensing and
  development</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>8,972,828</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>8,972,828</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Other</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>2,667,039</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>2,667,039</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>30,404,155</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>1,455,456</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>297,844,628</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(193,212,192</font></td>
  <td width="3%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>136,492,047</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=1>Operating
  costs and expenses:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Telecommunication network expense</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>24,958,320</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>4,048,943</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>280,509,798</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(193,347,408</font></td>
  <td width="3%" valign=bottom><font size=1>)(D)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>116,169,653</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Marketing services</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>456,354</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>456,354</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Selling, general and
  administrative</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>18,353,731</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>2,788,040</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>63,096,554</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>1,353,380</font></td>
  <td width="3%" valign=bottom><font size=1>(E)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>85,591,705</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Unsuccessful acquisition costs</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>1,137,485</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,137,485</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Provision for doubtful accounts</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>113,168</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>164,921</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>20,855,483</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(16,670,186</font></td>
  <td width="3%" valign=bottom><font size=1>)(F)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>4,463,386</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Depreciation and amortization</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>6,399,318</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>265,257</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>20,451,083</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,800,573</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>(A)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>28,916,231</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Research and development</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>4,220,333</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>4,220,333</font></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="4%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="14%" colspan=3 valign=bottom bgcolor="#cceeff"><font size=1>Total operating costs and
  expenses</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>54,501,224</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>7,267,161</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>1,137,485</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>384,912,918</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(206,863,641</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>240,955,147</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=1>Operating
  loss</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(24,097,069</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(5,811,705</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(1,137,485</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(87,068,290</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>13,651,449</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(104,463,100</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom><font size=1>Other
  income (expense):</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Interest expense</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(1,502,676</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(256,878</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(23,718</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(22,219,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>19,010,377</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>(I)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(4,991,895</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Interest and other income
  (expense)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>487,132</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>21,457</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>21,919,000</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(22,659,391</font></td>
  <td width="3%" valign=bottom><font size=1>)(G)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(231,802</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Loss on sale of assets</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(139,606</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(139,606</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom><font size=1>Settlement expense</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(639,565</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>-</font></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(639,565</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom bgcolor="#cceeff"><font size=1>Loss incurred by unconsolidated
  entities</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(74,866,903</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>74,866,903</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>(H)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>0</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="2%" valign=bottom>&nbsp;</td>
  <td width="16%" colspan=4 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="4%" colspan=3 valign=bottom>&nbsp;</td>
  <td width="14%" colspan=2 valign=bottom><font size=1>Total other income (expense)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(1,655,109</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(375,027</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom><font size=1>(23,718</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom><font size=1>(75,166,903</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>71,217,889</font></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom><font size=1>(6,002,868</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="4%" colspan=3 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>Net loss</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(25,752,178</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(6,186,732</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=1>(1,161,203</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="13%" valign=bottom bgcolor="#cceeff"><font size=1>(162,235,193</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font size=1>84,869,338</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font size=1>(110,465,968</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom><font size=1>Calculation
  of net loss per common share:</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom><font size=1>Net
  loss</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(25,752,178</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(6,186,732</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(1,161,203</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=1>(162,235,193</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>84,869,338</font></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>(110,465,968</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=1>Cumulative
  preferred stock dividends not paid in current year</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(1,646,818</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(2,682,000</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>-</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>(4,328,818</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff"><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=1 width="100%" noshade color=black align=left></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="4%" colspan=4 valign=bottom>&nbsp;</td>
  <td width="14%" valign=bottom><font size=1>Loss applicable to common stock</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(27,398,996</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(6,186,732</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(1,161,203</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="13%" valign=bottom><font size=1>(164,917,193</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>84,869,338</font></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>(114,794,786</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="3%" valign=bottom><font size=1>&nbsp;</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom><font size=1>&nbsp;</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom bgcolor="#cceeff"><font size=1>Basic
  and diluted weighted average shares outstanding</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>26,669,058</font></td>
  <td width="1%" valign=bottom bgcolor="#cceeff"><font size=1>&nbsp;</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="1%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>17,454,333</font></td>
  <td width="3%" valign=bottom bgcolor="#cceeff"><font size=1>(B)</font></td>
  <td  align=right width="11%" colspan=2 valign=bottom bgcolor="#cceeff"><font size=1>44,123,391</font></td>
  <td width="0%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom><font size=1>Net
  loss per common share - basic and diluted</font></td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="9%" valign=bottom><font size=1>(1.03</font></td>
  <td width="1%" valign=bottom><font size=1>)</font></td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom><font size=1>$</font></td>
  <td  align=right width="10%" valign=bottom><font size=1>(2.60</font></td>
  <td width="0%" valign=bottom><font size=1>)</font></td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="14%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="3%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>
<hr size=2 width="100%" noshade color=black align=right></td>
  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="19%" colspan=5 valign=bottom>&nbsp;</td>
  <td  align=right width="11%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" colspan=2 valign=bottom>&nbsp;</td>
  <td width="1%" valign=bottom>&nbsp;</td>
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  <td width="0%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=23 valign=bottom><font size=1>The
  accompanying notes are an integral part of these unaudited proforma combined
  condensed financial statements</font></td>
 </tr>

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<page>


<p align=center><br>
<b><font size=2>I-LINK
INCORPORATED</font></b><font size=2><br>
<a name=NotesToUnauditedProFormaCombinedCondense><b>NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED</b></a><br>
<b>FINANCIAL
STATEMENTS</b></font></p>

<p><b><font size=2>NOTE 1&#151;BASIS OF PRESENTATION:</font></b></p>

<p><font size=2>On June 4, 2001, I-Link Incorporated
(&#147;I-Link&#148;), through its wholly owned subsidiary WorldxChange Corporation
(&#147;WorldxChange&#148;) completed its purchase of certain select assets employed in
the long-distance business of Communications Telesystems International d.b.a.
WorldxChange Communications (&#147;Communications&#148;) as part of a court supervised
sale in a bankruptcy proceeding and assumed or renegotiated certain select
contracts associated with the assets purchased.&nbsp; Communications was an entity providing telecommunications
services worldwide.&nbsp; However,
WorldxChange acquired only the domestic long-distance business. This
transaction was recorded using purchase accounting.</font></p>

<p><font size=2>On April 17, 2001, I-Link completed the
merger with WebToTel, Inc. (&quot;WebToTel&quot;) and its subsidiary Nexbell
Communications Inc. (&quot;Nexbell&quot;). WebToTel was an entity established
to acquire telecommunication companies. Nexbell is a wholesale network
telecommunications provider. I-Link acquired WebToTel and its subsidiary
Nexbell for consideration consisting of 17,454,333 shares of I-Link's common
stock. Each share of WebToTel stock was exchanged for .1313 shares of I-Link
common stock. This transaction was recorded using book value purchase
accounting (similar to the pooling-of-interests method of accounting) as all
three entities were under common control of Counsel Communications LLC (a
wholly-owned subsidiary of Counsel Corporation) at the time of the merger. The
merger was a tax-free reorganization under Section 368(a) of the Internal
Revenue Code of 1986, as amended.</font></p>

<p><b><font size=2>NOTE 2&#151;PRO FORMA ADJUSTMENTS:</font></b></p>

<p><font size=2>The following pro forma adjustments were
applied to the historical consolidated financial statements of I-Link, WebToTel
and Nexbell to arrive at the unaudited pro forma combined condensed financial
information.</font></p>

<dir>
<p><b><font size=2>(A)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to reflect purchase
accounting adjustments including the addition of goodwill from the acquisition
of Nexbell by WebToTel in February 2001.</font></p>
</dir>

<dir>
<p><b><font size=2>(B)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment relates to the issuance of
17,454,333 shares of I-Link common stock in exchange for all of the outstanding
stock of WebToTel.</font></p>
</dir>

<page>


<p><font size=2><br>
The following pro forma adjustments were applied to the historical consolidated
financial statements of I-Link and Communications to arrive at the unaudited
pro forma combined condensed financial information.</font></p>

<dir>
<p><b><font size=2>(C)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to remove revenues related to
non-retail lines of business included in the historical financial statements
that WorldxChange is not continuing to offer following the acquisition.</font></p>
</dir>

<dir>
<p><b><font size=2>(D)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to remove variable
telecommunication network expenses related to non-retail lines of business
included in the historical financial statements that WorldxChange is not
continuing to offer following the acquisition.</font></p>
</dir>

<dir>
<p><b><font size=2>(E)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to selling, general and
administrative expense relating to the capitalization of various selling,
general and administrative expenses and specific rebranding expenses related to
the purchase of Communications by World Access.</font></p>
</dir>

<dir>
<p><b><font size=2>(F)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to provision for doubtful
accounts to remove provision related to non-retail lines of business included
in the historical financial statements that WorldxChange is not continuing to
offer following the acquisition.</font></p>
</dir>

<dir>
<p><b><font size=2>(G)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to remove other income
related to a management contract with <br>
World Access in the historical financial statements of Communications that does
not continue with WorldxChange.</font></p>
</dir>

<dir>
<p><b><font size=2>(H)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to remove loss incurred by
unconsolidated entities that WorldxChange did not purchase out of the
bankruptcy proceedings.</font></p>
</dir>

<dir>
<p><b><font size=2>(I)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustment to interest expense to
remove interest costs relating to debt not assumed by WorldxChange out of the
bankruptcy proceedings or restructured after the purchase, net of interest on
borrowings used by WorldxChange to purchase and capitalize the ongoing
business.</font></p>
</dir>

<p><font size=2>I-Link through its wholly-owned
subsidiary WorldxChange paid $13 million for substantially all of the assets
employed in the long-distance business of Communications which included
accounts receivable of approximately $13 million and predominately all of the
telephony network and systems associated with the long-distance business
located in the United States.</font></p>

<page>


<p><br>
<font size=2>WorldxChange commenced operating this business under a
substantially reduced cost structure and anticipates realizing significant
additional cost reductions through the modification of agreements with
principal equipment vendors, service providers, and lower levels of fixed
facility costs.&nbsp; However, the ultimate
amount of cost savings that may be obtained is not presently determinable and
accordingly are not reflected in the pro forma financial statements herein
provided.</font></p>

<p><b><font size=2>NOTE 3&#151;PRO FORMA NET LOSS PER SHARE:</font></b></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic
and diluted weighted average shares outstanding were calculated based upon the
historical basic and diluted weighted average shares outstanding of I-Link,
increased by the shares I-Link issued upon acquisition of WebToTel and Nexbell
which assumes the shares had been outstanding during all of 2000.&nbsp; Because the companies are in a net loss
position on a pro forma combined condensed basis, inclusion of potential common
stock in the computation of pro forma net loss per share is anti-dilutive;
therefore, potential common stock is excluded from the per share amounts.</font></p>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>j1587_ex23d1.htm
<TEXT>
<html>

<head>
<title>Prepared by MerrillDirect</title>
</head>

<body>

<div>

<p align=right><b><font size=2>EXHIBIT
23.1</font></b></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p align=center><b><font size=2>CONSENT
OF ERNST &amp; YOUNG LLP, INDPENDENT AUDITORS</font></b></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>We consent to
the incorporation by reference in the following Registration Statements for
I-Link Incorporated: Form S-8/Form S-3 No. 333-86761 pertaining to the 1997
Recruitment Stock Option Plan of I-Link Incorporated; Form S-8/S-3 No.
333-88881 pertaining to Various Written Compensation Contracts of I-Link
Incorporated; Form S-8/S-3 No. 333-08483 pertaining to the 1995 MedCross, Inc.
Employee Stock Option and Appreciation Rights Plan of MedCross, Inc.; Form
S-8/S-3 No. 333-08477 pertaining to the 1995 MedCross, Inc. Director Stock
Option and Appreciation Rights Plan of MedCross, Inc.; and Form S-8 No.
33-81646 pertaining to the 1994 Director Stock Option Plan of MedCross, Inc. of
our report dated January 10, 2001 (except for Note 13, as to which the date is
August 15, 2001) with respect to the consolidated financial statements of the
United States operations of Communications Telesystems International d.b.a.
WorldxChange Communications included in the Current Report (Form 8-K/A#1) of
I-Link Incorporated filed with the Securities and Exchange Commission on or
about August 20, 2001.</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p align=right><font size=2>/s/ERNST
&amp; YOUNG LLP</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>&nbsp;</font></p>

<p><font size=2>San Diego, California<br>
August 15, 2001</font></p>

<p><font size=2>&nbsp;</font></p>

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</TEXT>
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