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WorldQuest Networks, Inc.
16990 Dallas Parkway, Suite 220, Dallas, TX 75248 * (972) 818-0460
Business Description The company is an international telephone company. The company carries international long distance calls over their own enhanced services platform through transmission over their own Internet network and also over their network of traditional long distance telephone lines.
Offering
Information

Company has
gone public

Trading As  WQNI (NASNTL) Industry  Telecommunications (SIC 4813)
Type of Stock Offered  Common Shares Filing Date  7/13/99
Domestic Shares Offered  2,750,000 Offer Date  2/3/00
Foreign Shares Offered  0 Filing Range  $10.00 - $12.00
Company Shares  2,750,000 Offer Price  $13.00
Selling Shrhldrs Shares  0 Gross Spread  $0.970
Gross Proceeds  $35,750,000 Selling  $0.580
Expenses  - - Reallowance  $0.100
Post-IPO Shares  - - Employees  - -
Primary
Underwriting
Group
Underwriter NameParticipationUnderwriter Phone
Ladenburg, Thalmann & Co. Inc. Lead Manager (212) 409-2300
EBI Securities Corp. Co-manager (303) 694-0295
John G. Kinnard Co-manager (612) 370-2844
Kaufman Brothers L.P. Co-manager (212) 292-4200
Income
Statement
and
Cash Flow
Summary
  Prior
Audited
Income
Latest
Unaudited
Income
  Full Year Audited Figures 3 Months Ending
Figures in U.S. millions except per share data       12/31/97 12/31/98 3/31/98 3/31/99
Revenues   - - - 0.052 1.841 0.055 1.432
Income from Oper.   - - - - - - -
Net Income   - - - -1.590 -1.578 -0.339 -0.371
E.P.S   - - - -0.530 -0.530 -0.110 -0.120
Revenue Growth (%)      - - - 3,443.750   2,486.95
Net Income Growth (%)      - - - -   -
Oper. Profit Margin (%)    - - - - - - -
Net Profit Margin (%)    - - - - - - -
Cash Flow - Oper.     -0.66 -0.34 0.05
Cash Flow - Inv.     -0.15 -0.03 -0.08
Cash Flow - Fin.     0.84 0.42 0.02
Balance Sheet
Summary
and
Financial
Ratios
Balance sheet as of: 3/31/99 Financial Ratios
Total Assets    0.97 Current Assets    0.09 Current Ratio    0.03
Total Liab.    3.86 Current Liab.    2.62 Debt Ratio    397.43%
Total Equity    -2.89 Working Cap.    -2.53 Debt to Equity Ratio    -
Cash    0.01    Return on Assets   -
Use Of
Proceeds
The proceeds from the proposed offering will be used to expand our sales and marketing efforts; to fund equipment purchases including certain additional back-up systems; to repay indebtedness; to fund software development; to increase deposits with credit card processing companies and for working capital and other general corporate purposes.
Legal Counsel
Registrar
Auditor
Issuer's Law Firm  Glast, Phillips & Murray, P.C.
Bank's Law Firm  Freshman, Marantz, Orlanski, Cooper & Klein
Auditor  Ernst & Young
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Industry
Competition
With respect to prepaid calling cards, the company competes with many of the largest telecommunications providers, including AT&T;, MCI WorldCom, Cable & Wireless and Sprint. These companies are substantially larger and have greater financial, technical, engineering, personnel and marketing resources, longer operating histories, greater name recognition and larger customer bases than the company does. The company also competes with smaller, emerging carriers in the prepaid calling card market, including PT-1 Communications, Inc., RSL Communications, IDT Corp., SmarTalk Teleservices, Inc., Pacific Gateway Exchange, Inc., FaciliCom International, LLC and Telegroup, Inc. the company may also compete with large operators in other countries. These companies may have larger, more established customer bases and other competitive advantages. Deregulation in other countries could also result in significant rate reductions. The company believes that additional competitors will be attracted to the prepaid card market. These competitors include Internet-based service providers and other telecommunications companies. Competition from existing or new competitors could substantially reduce the company's revenues from the sale of these cards. A general decrease in telecommunication rates charged by international long distance carriers could also have a negative effect on the company's operations.
Business
Plan
The company's goal is to be a leading worldwide Internet telephony company. The company's objective is to increase its revenues through increasing their customer base and the number of countries it accesses through its own Internet network. The strategy to achieve the company's goal and take advantage of market opportunities includes: (i) focusing their marketing efforts on developing countries that have high international long distance rates and significant calling traffic to the U.S. or other countries; (ii) advertising on Web sites and portals frequently visited by the company's target groups; (iii) increasing the company's name recognition; (iv) increasing the number of countries in which the company locates its Internet gateways; (v) developing and offering enhanced products and services to complement existing products and services; (vi) promoting repeat purchases; and (vii) advertising, selling and delivering the company's virtual calling cards 24 hours per day, year round.

Last updated: 5/29/00 12:57:29 AM
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