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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 2 TO
CURRENT REPORT
(PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934)
November 25, 1997
(Date of Report (Date of Earliest Event Reported))
GLOBAL ONE DISTRIBUTION & MERCHANDISING INC.
(Exact name of registrant as specified in its charter)
DELAWARE 2741 95-4578632
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification
Code Number) Number)
5548 Lindbergh Lane
Bell, California 90201-6410
(213) 980-4300
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
Effective November 25, 1997, Deloitte & Touche LLP ("Deloitte") resigned as
the independent accountants of Global One Distribution & Merchandising Inc.
(the "Company"). In the past two years, Deloitte's reports on the financial
statements have not contained an adverse opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles. Except as
described below, for the two most recent fiscal years and the subsequent
interim period through the date of Deloitte's resignation, there were no
disagreements with Deloitte on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope procedure, which
disagreements, if not resolved to the satisfaction of Deloitte, would have
caused it to make reference to the subject matter of the disagreement in
connection with its report.
On October 8, 1997, the assets of OSP Publishing, Inc., the Company's wholly
owned subsidiary ("OSP"), were sold through a public sale to Senoral, Inc., the
Company's lender ("Senoral"), for $1,000,000 as the result of the Company's
defaults on certain indebtedness in favor of Senoral aggregating approximately
$1.7 million. In connection with the public sale, the Company and OSP waived
their rights to, among other things, certain notices, rights of redemption and
rights to object to the form of sale. Senoral is controlled by Alan Saloner who
owns 250,000 shares of the Company's common stock. Following the public sale, a
deficiency of approximately $770,000 was owed by the Company to Senoral under
the line of credit.
The assets were then sold to LJR Trading, Inc. ("LJR"), a wholly owned
subsidiary of Erekesef Securities Limited ("Erekesef"). Effective October 24,
1997, the Company and Erekesef entered into an agreement whereby the Company
agreed to purchase all of the outstanding stock of LJR in exchange for 8,000,000
shares of the Company's common stock. As a result of the above transactions,
the Company's management seeks to be relieved of the liabilities of OSP (the
"OSP Liabilities"), which would result in the recognition of gain in the fourth
quarter of fiscal year end December 31, 1997. Deloitte has advised the Company
that, due to the uncertainties of whether the OSP Liabilities have been legally
settled, a gain should not be recognized during the fourth quarter. The
Company's Board of Directors, as a whole, did not discuss the subject matter
with Deloitte. Since the above transactions occurred following the Company's
third fiscal quarter, Deloitte was not required to issue a report regarding the
transactions.
The Company is seeking an independent accounting opinion from another accounting
firm to the effect that, as a result of the sale of the assets of OSP and upon
sale of the OSP stock, the Company will be relieved of the OSP Liabilities.
In November 1997, Deloitte advised management that the Company's controller
was overburdened and that the Company needed additional assistance to perform
internal audit control procedures in a timely manner.
The Company is currently seeking to engage new independent accountants.
The Company has authorized Deloitte to respond fully to the inquiries of
successor accountants.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
Exhibit No. Description Page No.
----------- ----------- --------
16 Letter, dated December 22, 1997, from
Deloitte to the SEC
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SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, Global One
Distribution & Merchandising Inc. has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: December 23, 1997
GLOBAL ONE DISTRIBUTION
& MERCHANDISING INC.
By: /s/ Douglass E. Coy
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Douglass E. Coy
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[LETTERHEAD]
December 22, 1997
Securities and Exchange Commission
Mail Stop 9-5
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read item 4 of the Form 8-K/A of Global One Distribution & Merchandising
Inc. (the "Company") dated December 9, 1997 and have the following comments:
- - We agree with the comments in paragraph 1.
- - We agree with the comments in paragraph 3, sentences 4, 5 and 6 except that
we were not requested by the Company to issue a report expressing our
conclusions with respect to the transactions described in paragraph 2 and
paragraph 3.
- - We agree with the comments in paragraph 5 except that following our review
of the Company's financial statements included in its Form 10-Q for the
quarter ended September 30, 1997, we advised management that, in our
opinion, the internal controls necessary to develop reliable interim
financial statements had deteriorated significantly.
- - We agree with the comments in paragraph 7.
- - We have no basis to agree or disagree with the comments included in
paragraph 2; paragraph 3, sentences 1, 2 and 3; paragraph 4; and
paragraph 6.
Yours truly,
Deloitte & Touche LLP
