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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
Date of Report (Date of earliest event reported): January 7, 1999
SMARTALK TELESERVICES, INC.
(Exact name of registrant as specified in its charter)
California 0-21579 95-4502740
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5080 Tuttle Crossing Boulevard 43016-3566
Dublin, Ohio (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (614) 789-8500
No change
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(Former name or former address, if changed since last report)
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ITEM 5 -- OTHER EVENTS.
On Thursday, January 7, 1999 (Columbus, Ohio): SmarTalk TeleServices, Inc.
(Nasdaq:SMTK; the "Company") announced that it has discovered accounting issues
that will likely require a restatement of previously reported results for the
third quarter ended September 30, 1998 and are expected to have a material
adverse effect on such results. The Company has discovered issues that could
decrease by approximately $3.6 million the Company's previously reported third
quarter revenues of $59.8 million, increase third quarter costs by approximately
$2.2 million, and could increase by approximately $0.21 the previously reported
third quarter net loss per share of $0.82. These preliminary estimates are
currently being reviewed and have not been fully quantified. There can be no
assurance that the Company will not discover other accounting issues that could
materially adversely affect SmarTalk's restated third quarter financial results.
It is expected that the Company will experience difficulty in financing its
liquidity requirements, both in the long and short term. The Company has
retained Zolfo Cooper LLC to provide management assistance.
Reference is made to the exhibit filed herewith for a complete text of the
press release discussing the above referenced matters which exhibit is
incorporated by reference herein in its entirety.
ITEM 7 -- FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) The Exhibit furnished in accordance with Item 601 of Regulation S-K is:
99.1 Press Release of the Company, dated January 7, 1999.
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SIGNATURE
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
undersigned hereunto duly authorized.
Date: January 7, 1999
SMARTALK TELESERVICES, INC.
(Registrant)
/s/Thaddeus Bereday
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(Signature)
Thaddeus Bereday
Vice President and General Counsel
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EXHIBIT INDEX
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(c) The Exhibit furnished in accordance with Item 601 of Regulation S-K is:
99.1 Press Release of the Company, dated January 7, 1999.
[GRAPHIC OMITTED]
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact: SmarTalk TeleServices
Pamela Bennett
Manager, Corporate Communications
(614) 789-8650
SMARTALK ANNOUNCES DISCOVERY OF ACCOUNTING ISSUES
Thursday, January 7, 1999 (Columbus, Ohio): SmarTalk TeleServices, Inc.
(Nasdaq:SMTK; the "Company") today announced that it has discovered accounting
issues that will likely require a restatement of previously reported results for
the third quarter ended September 30, 1998 and are expected to have a material
adverse effect on such results. The Company has discovered issues that could
decrease by approximately $3.6 million the Company's previously reported third
quarter revenues of $59.8 million, increase third quarter costs by approximately
$2.2 million, and could increase by approximately $0.21 the previously reported
third quarter net loss per share of $0.82. These preliminary estimates are
currently being reviewed and have not been fully
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quantified. There can be no assurance that the Company will not discover other
accounting issues that could materially adversely affect SmarTalk's restated
third quarter financial results.
It is expected that the Company will experience difficulty in financing its
liquidity requirements, both in the long and short term. The Company has
retained Zolfo Cooper LLC to provide management assistance.
SmarTalk TeleServices, Inc. is a leading provider of prepaid calling cards
and prepaid wireless services. Based in Dublin, Ohio, SmarTalk maintains
distribution agreements with the U.S. Postal Service and leading mass
merchandisers, consumer electronics retailers, supermarkets, hotels, home office
superstores and convenience stores throughout North America and the U.K.
SmarTalk also creates promotional card programs for advertisers and corporate
clients. Visit the SmarTalk website at www.smartalk.com.
Note: Certain statements made herein that are not historical in nature are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 including: the estimated impact of the accounting
issues on the Company's financial results, including its net loss for the third
quarter ended September 30, 1998; and the Company's ability to continue
financing its liquidity requirements. Investors are cautioned that all
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those expressed in such forward-looking
statements. These risks include, without limitation, risks relating to: the
possibility that additional accounting issues may be identified in connection
with the anticipated restatement; the risk that the SEC could disagree with the
Company's accounting treatment with respect to specific items; possible
difficulty in obtaining financing to meet the Company's liquidity requirements;
and difficulty in integrating the Company's operations. Investors who seek more
information about the Company's business and relevant risk factors may wish to
review the Company's SEC reports, including, without limitation, its Annual
Report on Form 10-K for 1997 and its Quarterly Reports on Form 10-Q, as each of
such documents may be amended.
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