Receiver Report, August 31, 2000

Carl F. Schoeppl, Esq., Receiver
TRANSWORLD ENTERPRISES, INC. D/B/A ATM INTERNATIONAL
RECEIVERSHIP ESTATE
4651 North Federal Highway,
Boca Raton, Florida 33431-5133

Toll Free: (888) ATM-5001


August 31, 2000

Re: FTC v. Transworld Enterprises, Inc. d/b/a ATM International, Mark Goldstein a/k/a Mark Davis, and James A. Mackey, Jr., Case No. 00-8126-GRAHAM (S.D. Fla.)

Dear Investors and Potential Creditors:

I. Background of the Case

On February 7, 2000, the Federal Trade Commission ("FTC") filed a complaint (the "Complaint") against Transworld Enterprises, Inc. d/b/a ATM International ("Transworld), Mark Goldstein a/k/a Mark Davis, and James A. Mackey, Jr. ("Mackey")(collectively, the "Defendants") alleging that they offered and sold Automated Teller Machine ("ATM") business ventures to investors in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a), and the FTC's Trade Regulation Rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures" (the "Franchise Rule"), 16 C.F.R. 436.

In summary, the Complaint alleges that between in or about 1996 and continuing through to in or about February 2000, the Defendants engaged in a variety of unfair and deceptive acts and practices in connection with the offer and sale of ATM business ventures to investors throughout the United States. (Compl., 9-33). Specifically, the Complaint alleges that the Defendants, expressly or by implication, represented that: (a) consumers who purchase the business venture would earn a net annual profit of between $6,360 and $39,840, when, in truth and fact, few, if any, consumers earned such net annual profits; (b) consumers would be provided with profitable locations for their ATM machines, when, in truth and fact, few, if any, consumers would be provided with profitable locations; and (c) the Defendants would provide consumers all the support necessary in all areas of the ATM business, when, in truth and fact, in most instances, the Defendants provided little or no support, and that consumers were instead required to obtain such support services from another company for an additional fee of $1,000 or more. (Compl., 17-26).

The Complaint further alleges that the Defendants failed to provide prospective franchisees with accurate and complete basic disclosure documents required by the Franchise Rule, and that, in connection with the offering of "franchises" as that term is defined in the Franchise Rule, the Defendants made "earnings claims" without providing prospective franchisees with earnings claim

documents required by the Franchise Rule, without having a reasonable basis for such claims at the time they were made, and without disclosing the information required by the Franchise Rule in immediate conjunction therewith. (Compl., 27-32).

Contemporaneous with the filing of the Complaint, the FTC filed an Emergency Motion for a Temporary Restraining Order against the Defendants which was subsequently granted by the Court. Thereafter, a Stipulated Preliminary Injunction (the "Receivership Order") was entered against Defendants Transworld and Mackey which contained provisions for my appointment as the permanent Receiver for Transworld.

The Receiver has the authority and responsibility to, among other things, determine the nature, location, and value of all assets and property owned by or in the possession of Transworld. Obviously, there are no guarantees as to whether and to what extent assets and property will be recovered for the Receivership Estate.

II. Material Developments in the Receivership Estate Since the Last Report

In summary, the Receiver's extensive and necessary services for and on behalf of the Receivership Estate since the last report can be categorized as follows: (a) Asset Analysis and Recovery; (b) Asset Disposition; (c) Case Administration; (d) Claims Administration and Objections; (e) Litigation; (f) Accounting Matters; and (g) Government Investigations, and are described in detail below.

(a) Asset Analysis and Recovery. Immediately upon his appointment, the Receiver and Counsel for the Receiver took all necessary actions to take custody of all of the Receivership Defendant's physical property, assets, and other estate property. This entailed taking possession of Transworld's offices at 1600 South Dixie Highway, Suites 4A and 4B, Boca Raton, Florida 33432 (the "Dixie Highway Offices"), the physical contents of the Dixie Highway Offices, and Transworld's business records and investor records consisting of approximately 25 boxes. In addition, Transworld maintains a "drop-box" located at 160 West Camino Real, Suite 145, Boca Raton, Florida 33432 (the "Drop-Box") which the Receiver also immediately seized, together with all of the physical contents of the same, which included, among other things, various items of mail addressed to Transworld at this address. The Receiver also took immediate action to take custody of all of the Receivership Estate's known bank accounts.

During the two-week period immediately following his appointment, the Receiver and his staff spent numerous hours devoted to the affairs of the Receivership Estate. For example, the Receiver completed the removal of all books and records from both the Dixie Highway Offices and the Drop-Box and spent considerable time reviewing such records, surveyed and supervised the photography and videography of the Dixie Highway Offices and inventoried the equipment and furniture there, and interviewed various persons relating to Transworld's business, including Patricia A. Diaz, former Transworld employee, Karen Brown, former receptionist for Transworld, and Ted Lanzaro, C.P.A. with Goldstein Lewin & Co., former accountants for Transworld. Contemporaneously and thereafter, the Receiver seized the accounting and bookkeeping records for Transworld, wrote letters to potential asset holders regarding the Receivership Estate, and otherwise took appropriate and necessary actions to preserve and protect the Receivership Estate with respect to leases, contracts, and agreements. To date, the Receiver has, inter alia: (i) recovered approximately $100,000.00 for the Receivership Estate (collectively, "Category I"); (ii) identified approximately $445,000.00 in transfers of Transworld funds to third-parties which are potentially recoverable by the Receivership Estate (collectively, "Category II"); and (iii) procured an offer, which is described in detail below in Section III, by International Merchant Services, Inc. ("IMS") to purchase ATM machines acquired by investors up to a maximum of $3,500.00 per machine subject to certain terms and conditions by IMS (collectively, "Category III"). The Category I assets have been deposited into a bank account established in the name of the Receivership Estate. With respect to Category II, the Receiver has engaged in discovery to establish a colorable basis to seek the recovery of all or a part of the "assets" in Category II. Finally, Category III represents a potential set-off on losses incurred by the majority of consumers who acquired ATM business opportunities by and/or through Transworld. The Receiver's efforts with respect to Categories II and III are ongoing at this time.

(b) Asset Disposition. The Receiver promptly undertook the task of disposing of the physical assets of the Receivership Estate in an expeditious and orderly manner, which asset disposition included the preparation of the Receiver's Motion to Abandon Leasehold Estate of Transworld With Memorandum, Motion to Liquidate the Contents of the Leasehold Estate of Transworld With Memorandum, and the identification and correspondence to potential asset holders regarding the repossession of a Mercedes Benz and Porsche in the possession of Defendant Mark Goldstein. The Receiver received $1,010.00 from the sale of the furniture, equipment, inventory, and supplies of the Dixie Highway Offices.

(c) Case Administration. The Receiver handled all day-to-day matters that arise in the course of managing a complex Receivership Estate. The Receiver has established a post office box for Transworld, and a toll-free telephone number for consumers and creditors to contact the Receiver. As of August 31, 2000, the Receiver has identified approximately 250 investors, employees, and other persons, primarily trade creditors, having potential claims against the assets of the Receivership Estate, which persons are located throughout the United States. The Receiver and his staff responded to inquiries concerning the affairs of the Receivership Estate, and strived to keep investors, putative creditors, and other interested persons well informed of the progress of the Receivership Estate. In addition, the Receiver and his staff conquered the arduous responsibility of organizing, inventorying, and compiling approximately 25 boxes of documents and other evidence seized from Transworld.

(d) Claims Administration and Objections. Following his appointment, the Receiver initiated an informal claims procedure and issued a Notice to Investors and Claim Form to all known investors in the Transworld ATM business opportunities. To date, the Receiver has received and analyzed over 110 executed Claim Forms from investors. However, to ensure that all known and unknown creditors receive notice of the administration of the Receivership Estate, and to provide such investors or creditors with an opportunity to file claims with the Receiver, the Receiver has filed a Motion for Order Establishing Claims Procedure and Claims Bar Date (the "Claims Procedure Motion") with the Court in June 2000. In the Claims Procedure Motion, the Receiver proposed that any investor who has previously submitted a duly executed Claim Form through this informal procedure need not submit a new Claim Form unless the Receiver gives such investor Notice of Insufficient Documentation which requires such investors to supplement their Claim Form. As of August 31, 2000, the Court has not yet entered an order on the Claims Procedure Motion.

(e) Litigation. The Receiver and his staff worked extensively on litigation issues, including, but not limited to, preparing of motions, affidavits, proposed orders, notices, memoranda of law, filing of the Complaint in other jurisdictions, conferences regarding Case Management Report, discovery, depositions, pretrial motions, and other issues specified under the Local Rule 16.1 for the United States District Court for the Southern District of Florida, and other legal memoranda, issuing subpoenas to potential asset holders, deposing numerous witnesses (e.g., Mark Goldstein a/k/a Mark Davis, Sonya Goldstein, Mark Goldstein's former wife, Alan Goldstein, Mark Goldstein's son, James A. Mackey, Jr., the nominal former President of Transworld, Karen Brown, the former receptionist for Transworld, and Patricia A. Diaz, the former secretary for Mark Goldstein at Transworld, and bookkeeper for Transworld), and interviewing numerous fact and expert witnesses. With the exception of the anticipated imminent recovery of an additional $100,000.00 from a corporate bail bond Goldstein established with Transworld funds, the Receiver anticipates that substantial litigation will be necessary to recover the additional assets (i.e., approximately $335,000.00) identified above in "Category II."

(f) Accounting Matters. The Accountants for the Receiver have been instrumental in strategy sessions on forensic accounting and tax issues relating to the Receivership Estate. The Accountants for the Receiver were responsible for examining, inventorying, and maintaining all of the original books and records seized from Transworld, verifying their accuracy, compiling a preliminary accounting of Transworld's affairs, including an analysis of the accounting, suspicious transactions, and source and use of funds by Transworld and Mark Goldstein, and preparing certain tax returns for the Receivership Estate. Based upon the compilations prepared by the Accountants for the Receiver, the Receiver has learned that between in or about April 1998 and February 2000, Transworld offered and sold ATM business ventures to over 200 investors throughout the United States, and raised, directly and/or indirectly, a total of at least $4,278,000.00 from such activities. Out of this total, Goldstein received, directly and/or indirectly, a total of at least $931,000.00 (or Twenty-Two Percent (22%)) from Transworld during the above-described time period. Based upon the discovery conducted to date, Goldstein claims that he transferred any and all funds to third-parties for the payment of personal expenses, and that he no longer has any of such funds available to him. The Category II assets identified above represents a substantial portion of these funds which the Receiver is currently in the process of attempting to recover from third-parties who received the same from Goldstein. The balance of the funds received by Goldstein were either payable to him in cash, and/or paid to third-party vendors for the personal expenses of Goldstein. The Receiver's efforts in determining whether Goldstein may have spirited away substantial assets to a secret unidentified location and/or nominee are ongoing at this time.

(g) Government Investigations. The Receiver and his staff worked with the Commission concerning its investigation of Transworld, Mark Goldstein and James A. Mackey, Jr., and their activities in connection with the Receivership Estate. The Receiver has also cooperated and provided assistance to federal criminal authorities in connection with Goldstein in United States v. Mark Goldstein, Case No. 99-6195-CR-RYSKAMP (S.D. Fla.) (the "Criminal Case"). Goldstein is currently incarcerated in the federal prison system in connection with the Criminal Case at this time.

III. The Offer to Repurchase ATM Machines from Transworld Investors by IMS

The Receiver has negotiated with IMS regarding the prospect of repurchasing ATM Machines from Transworld Investors. As a result of these negotiations, IMS has agreed, on a case-by-case basis, to purchase ATM machines acquired by investors at a fair market value up to a maximum of $3,500.00 per machine subject to certain terms and conditions specified by IMS. Investors will need to contact IMS directly to the discuss the terms and conditions of a possible sale. Please forward all inquiries to IMS concerning this offer to purchase. The contact information for IMS is as follows:

Neil Johnson or Marilyn Morris
INTERNATIONAL MERCHANT SERVICES, INC.
1331A Airport Freeway, Suite 306
Euless, Texas 76040
Telephone: (817) 868-1810
Facsimile: (817) 868-1931
E-Mail:sales@atm24.com
Web Site:www.atm24.com

TO TAKE ADVANTAGE OF THIS OFFER, IT IS IMPERATIVE THAT ANY INTERESTED TRANSWORLD INVESTOR ACT WITH ALL DISPATCH IN CONTACTING IMS TO DETERMINE WHETHER ACCEPTABLE TERMS OF A SALE CAN BE AGREED UPON. OTHERWISE, THE OFFER FROM IMS MAY BE WITHDRAWN AND/OR MODIFIED ON LESS FAVORABLE TERMS WITHOUT FURTHER NOTICE.

Please note that any Transworld Investors who sell his/her/its ATM Machine to IMS should amend their claim form submission to the Receiver to reflect a set-off of their claim by an amount equivalent to proceeds received from the sale of the ATM Machine.

IV. Toll-Free Investor Hotline

In order to keep investors informed as to the progress of the Receivership proceedings, I have established a toll-free investor "Hotline" at (888) ATM-5001. The Hotline provides investors with a recorded message detailing brief highlights in the case, and an opportunity to leave recorded

voice message if they so desire. In the interest of reducing expense to the Receivership Estate so that potential distributions to investors can be maximized, all communications to the Receiver should be in writing.

Please be advised that neither the Receiver, nor his legal counsel, can give you personal legal advice concerning your claim, and that you should consult with the attorney of your choice regarding your legal rights.

Sincerely,

Carl F. Schoeppl, Receiver Transworld Enterprises, Inc. Receivership Estate