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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
(PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934)
January 28, 1998
(Date of Report (Date of Earliest Event Reported))
GLOBAL ONE DISTRIBUTION & MERCHANDISING INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 2741 95-4578632
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification) Identification Number)
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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 January 28, 1998, the Company engaged Lurie, Besikof, Lapidus &
Co., LLP, a Minnesota-based accounting firm ("Lurie, Besikof"), as the
Company's principal independent accountants.
On October 8, 1997, the assets of OSP Publishing, Inc., the Company's wholly
owned subsidiary ("OSP"), were sold through a public foreclosure 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. 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 OSP assets were then sold to LJR Trading, Inc. ("LJR"), a wholly owned
subsidiary of Erekesef Securities Limited, an independent third party
("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.
The Company is contemplating selling the stock of OSP to a third party, and,
in December 1997, the Company sought the opinion of Lurie, Besikof to the
effect that, following such sale, the liabilities of OSP (the "OSP
Liabilities") would be removed from the Company's consolidated balance sheet.
On December 11, 1997, Lurie, Besikof furnished a memorandum to the Company
indicating that, upon a sale of the stock of OSP to an independent third
party, the OSP Liabilities would be removed from the Company's balance sheet.
The memorandum was qualified by any contrary position of the SEC, whose
concurrence on this matter is currently being sought.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit No. Description Page No.
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16.1 Memorandum, dated December 11, 1997 from
Lurie, Besikof to Global One
2
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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: February 2, 1998
GLOBAL ONE DISTRIBUTION
& MERCHANDISING INC.
By: /s/ Douglass E. Coy
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Douglass E. Coy
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EXHIBIT 16.1
MEMORANDUM
TO: Doug Coy
FROM: Joel Lebewitz & Mark Ziessman
DATE: December 11, 1997
RE: Accounting Treatment of OSP Liabilities
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You have inquired about the accounting treatment for the remaining OSP
liabilities.
Our position is, in the event of a sale of all of the OSP stock to an
independent third party, OSP is no longer part of the Global One
consolidation and, therefore, the remaining liabilities would be removed
from the consolidated balance sheet. They would be reversed and recorded as
nonoperating income on the sale of a subsidiary on the consolidated
profit/loss statement.
Preliminary discussions with Global One's counsel indicate that they are
prepared to give us written assurance that it is remote that Global One would
be legally responsible for these liabilities.
As with any public company, accounting practices are subject to oversight by
the S.E.C. and this position could be changed by them. We are currently
attempting to obtain their concurrence with this position.
