SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
|X| Preliminary information
statement
|_| Definitive information statement
|_| Confidential, for use of the Commission
only (as permitted by Rule 14c-5(d)(2))
Global Telecommunication Solutions, Inc.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $.01 per share
(2) Aggregate number of securities to which transactions applies:
All outstanding securities of the Registrant
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
Not applicable
(4) Proposed maximum aggregate value of transaction:
Not applicable
(5) Total fee paid:
$0
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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* Set forth the amount on which the filing fee is calculated and state how
it was determined.
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PRELIMINARY COPIES
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
To the Holders of Common Stock of
Global Telecommunication Solutions, Inc.
Global Telecommunication Solutions, Inc. ("Company") has
obtained the written consent of certain of its stockholders of record as of
February 14, 1997 to approve an amendment to its Amended and Restated
Certificate of Incorporation to effectuate a one-for-three reverse stock split
of the issued and outstanding shares of Common Stock of the Company. This action
has been approved by the Board of Directors of the Company and the holders of a
majority of the Company's outstanding shares of Common Stock. Your consent is
not required and is not being solicited in connection with these actions.
Pursuant to Section 228 of the Delaware General Corporation Law, you are hereby
being provided with notice of the approval by less than unanimous written
consent of the stockholders of the Company. Pursuant to the Securities Exchange
Act of 1934, as amended, with this letter you are being furnished with an
Information Statement relating to these actions.
By Order of the Board of Directors
David S. Tobin
Secretary
Philadelphia, Pennsylvania
March 3, 1997
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PRELIMINARY COPIES
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
INFORMATION STATEMENT
CONCERNING CORPORATE ACTION AUTHORIZED BY
WRITTEN CONSENT OF STOCKHOLDERS OWNING
A MAJORITY OF SHARES OF CAPITAL STOCK
ENTITLED TO VOTE THEREON
THE COMPANY IS NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND THE COMPANY A PROXY
This Information Statement is furnished to the stockholders of
Global Telecommunication Solutions, Inc. ("Company") to advise them of certain
corporate actions described herein, which have been authorized by the written
consent of stockholders owning a majority of the shares of common stock, $.01
par value ("Common Stock"), of the Company entitled to vote thereon, pursuant to
the requirements of the General Corporation Law of Delaware and the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and the regulations
promulgated thereunder.
As described herein, by unanimous written consent dated
February 11, 1997, the Board of Directors of the Company authorized an amendment
("Amendment") to Article FOURTH of the Company's Amended and Restated
Certificate of Incorporation to effect a one-for-three reverse stock split
("Reverse Split") of the currently issued and outstanding shares of the
Company's Common Stock such that the Company thereafter will have outstanding
approximately 1,854,544 shares of Common Stock (excluding the obligation of the
Company to issue an insignificant number of additional shares of Common Stock in
lieu of fractional shares). The number of shares of Common Stock authorized by
the Amended and Restated Certificate of Incorporation will not change as a
result of the Reverse Split, and will remain at 35,000,000. The Board of
Directors fixed the close of business on February 14, 1997 as the record date
for the determination of stockholders entitled to vote with respect to
stockholder authorization of the Reverse Split. Thereafter, on February 17,
1997, ten stockholders ("Majority Stockholders") who are the owners of record of
2,880,154 shares (51.8%) of the Common Stock of the Company, the Company's only
class of voting securities outstanding, executed and delivered to the Company
their written consents to authorize the Amendment. Accordingly, all corporate
actions necessary to authorize the Amendment have been taken. Pursuant to the
regulations promulgated under the Exchange Act, the authorization of the Reverse
Split by the Board of Directors and Majority Stockholders shall not become
effective until twenty (20) days after the Company has mailed this Information
Statement to the stockholders of the Company. Promptly following the expiration
of this twenty (20) day period, the Company intends to file the Amendment with
the Delaware Secretary of State. The Reverse Split will become effective as of
5:00 p.m., Eastern Standard Time, on the date of such filing ("Effective Date").
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The executive offices of the Company are located at 5697
Rising Sun Avenue, Philadelphia, Pennsylvania 19120. On or about March 3, 1997,
this Information Statement will be mailed to each stockholder of record at the
close of business on February 14, 1997.
VOTING SECURITIES
The Board of Directors fixed the close of business on February
14, 1997 as the record date for the determination of stockholders entitled to
vote with respect to stockholder authorization of the Amendment. As of February
14, 1997, the Company had issued and outstanding 5,563,632 shares of Common
Stock, the Company's only class of voting securities outstanding. Each
stockholder of the Company was entitled to one vote for each share of Common
Stock registered in his name on the record date. The consent of the holders of a
majority of all of the outstanding shares of Common Stock was necessary to
authorize the Amendment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table and accompanying footnotes set forth
certain information as of February 14, 1997 with respect to the stock ownership
of (i) those persons known to the Company to beneficially own more than 5% of
the Company's Common Stock, (ii) each director of the Company, (iii) each
executive officer whose compensation exceeded $100,000 in the fiscal year ended
December 31, 1996, and (iv) all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address of Beneficial Owner Beneficial Ownership(1) Outstanding Shares
<S> <C> <C>
Shelly Finkel ....................................... 947,736(2) 16.4%
c/o Shelly Finkel Management, Inc.
60 East 42nd Street, Suite 464
New York, New York 10165
Gary J. Wasserson ................................... 535,523(3) 9.4%
c/o Global Telecommunication
Solutions, Inc.
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
John P. McCabe ...................................... 120,000(4) 2.1%
c/o Global Telecommunication
Solutions, Inc.
40 Elmont Road
Elmont, New York 11003
Alan W. Kaufman ..................................... 40,000(5) *
1150 Park Avenue #9A
New York, New York 10177
Jack N. Tobin ....................................... 20,000(6) *
7759 Highlands Circle
Margate, Florida 33063
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<PAGE>
Amount and Nature of Percent of
Name and Address of Beneficial Owner Beneficial Ownership(1) Outstanding Shares
Donald L. Ptalis .................................. 37,294(7) *
16 Ross Avenue
Emerson, New Jersey 07630
Cory Eisner ....................................... 25,750(8) *
c/o Global Telecommunication
Solutions, Inc.
40 Elmont Road
Elmont, New York 11003
David S. Tobin .................................... 49,048(9) *
c/o Global Telecommunication
Solutions, Inc.
5697 Rising Sun Avenue
Philadelphia, Pennsylvania 19120
Laifer Capital Management, Inc. ................... 450,205(10) 7.5%
45 West 45th Street
New York, New York 10036
Eli Oxenhorn ...................................... 425,340(11) 7.3%
56 The Intervale
Roslyn Estates, New York 11576
Barry Rubenstein .................................. 2,858,338(12) 34.7%
68 Wheatley Road
Brookville, New York 11545
Peoples Telephone Company, Inc. ................... 636,866 11.4%
2300 N.W. 89th Place
Miami, Florida 33172
Paul Silverstein .................................. 417,400(13) 7.4%
32 Edgewood Avenue
Larchmont, New York 10538
Whale Securities Co., L.P. ........................ 730,000(14) 12.0%
650 Fifth Avenue
New York, New York 10019
Wheatley Partners LLC ............................. 2,000,000(15) 26.4%
80 Cuttermill Road
Great Neck, New York 11021
All executive officers and directors as a ......... 1,796,101(16) 28.9%
group (9 persons)
</TABLE>
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* Less than 1%.
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(1) A person is deemed to be the beneficial owner of voting
securities that can be acquired by such person within 60 days
from the date of this Information Statement upon the exercise of
options, warrants or convertible securities. Each beneficial
owner's percentage ownership is determined by assuming that
convertible securities, options or warrants that are held by such
person (but not those held by any other person) and which are
exercisable within 60 days of the date of this Information
Statement have been exercised. Unless otherwise noted, the
Company believes that all persons named in the table have sole
voting and investment power with respect to all shares of Common
Stock beneficially owned by them.
(2) Includes (i) 50,000 shares of Common Stock underlying warrants
("December 1996 Warrants") issued in connection with a private
placement consummated by the Company in December 1996 ("December
1996 Private Placement"), which warrants become exercisable in
March 1997, (ii) 60,000 shares of Common Stock issuable upon
exercise of currently exercisable options and (iii) an aggregate
of 92,618 shares of Common Stock underlying warrants which are of
the same class as those issued in connection with the Company's
initial public offering ("IPO") in December 1994 and currently
quoted on the Nasdaq SmallCap Market ("Public Warrants").
(3) Includes 390,523 shares of Common Stock which are owned jointly
by Mr. Wasserson and his spouse and 145,000 shares of Common
Stock issuable upon exercise of currently exercisable options.
(4) Represents shares of Common Stock issuable upon exercise of
currently exercisable options.
(5) Includes 5,000 shares of Common Stock underlying Public Warrants
and 30,000 shares of Common Stock issuable upon exercise of
currently exercisable options.
(6) Represents shares of Common Stock issuable upon exercise of
currently exercisable options.
(7) Includes 16,192 shares of Common Stock issuable upon conversion
of $50,000 principal amount of debentures ("Convertible
Debentures") issued by Global Link Teleco Corporation, a company
acquired by the Company in February 1996, 379 shares of Common
Stock issuable upon exercise of warrants issued in connection
with the Convertible Debentures and 20,000 shares of Common Stock
issuable upon exercise of currently exercisable options.
(8) Includes 1,000 shares of Common Stock underlying Public Warrants
and 23,750 shares of Common Stock issuable upon exercise of
currently exercisable options. Does not include 11,250 shares of
Common Stock underlying options, 8,750 of which vest in October
1997 and 2,500 of which vest in October 1998.
(9) Includes 49,048 shares of Common Stock issuable upon exercise of
currently exercisable options. Does not include 33,334 shares of
Common Stock underlying options, 50% of which vest in each of
February 1998 and 1999.
(10) Includes 30,441 shares of Common Stock and 419,764 shares
issuable upon conversion of Convertible Debentures held by
entities for which Laifer Capital Management, Inc.
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("Laifer") acts as an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940. Such
information was obtained by the Company from a Schedule 13G
filed by Laifer with the Commission on February 6, 1997.
(11) Includes 1,000 shares of Common Stock and 1,000 shares issuable
upon exercise of Public Warrants owned by Mr. Oxenhorn's son, of
which he disclaims beneficial ownership, 94,170 shares of Common
Stock issuable upon exercise of Public Warrants and 175,000
shares issuable upon exercise of currently exercisable options.
(12) Includes 1,000 shares of Common Stock owned by The Marilyn and
Barry Rubenstein Family Foundation, a tax exempt organization of
which Mr. Rubenstein is a trustee, and 20,000 shares of Common
Stock owned by Marilyn Rubenstein, Mr. Rubenstein's spouse. Mr.
Rubenstein disclaims beneficial ownership over all of such
shares. Also includes 305,000 shares of Common Stock (including
40,000 shares of Common Stock underlying Public Warrants and
200,000 shares underlying December 1996 Warrants) owned by
Woodland Partners, a New York general partnership of which Mr.
Rubenstein is a partner. Also includes 109,000 shares of Common
Stock (including 100,000 shares of Common Stock underlying
December 1996 Warrants) owned by the Woodland Venture Fund, a New
York limited partnership of which Mr. Rubenstein is a general
partner. Also includes 100,000 shares of Common Stock underlying
December 1996 Warrants owned by Seneca Ventures, a New York
limited partnership of which Mr. Rubenstein is a general partner.
Also includes 1,880,000 and 120,000 shares of Common Stock
underlying December 1996 Warrants owned by Wheatley Partners,
L.P. ("Wheatley") and Wheatley Foreign Partners, L.P. ("Wheatley
Foreign"), respectively. Mr. Rubenstein is a member and officer
of Wheatley Partners LLC, a Delaware limited liability company
which is the general partner of Wheatley, and also a general
partner of Wheatley Foreign. Mr. Rubenstein disclaims beneficial
ownership of the securities owned by Woodland Partners, Woodland
Venture Fund, Seneca Ventures, Wheatley and Wheatley Foreign
except to the extent of his equity interest therein. Also
includes 54,169 shares of Common Stock owned individually by
Barry Rubenstein, 40,000 shares of Common Stock held in his IRA
Rollover account, 54,169 shares of Common Stock underlying Public
Warrants and 175,000 shares issuable upon exercise of currently
exercisable options.
(13) Includes 50,000 shares issuable upon exercise of currently
exercisable options and 17,500 shares of Common Stock underlying
Public Warrants.
(14) Does not include shares held in Whale's trading account. Includes
(i) 100,000 shares underlying warrants issued to Whale in
consideration of certain investment banking services rendered to
the Company, (ii) 150,000 shares underlying December 1996
Warrants issued to Whale in connection with the December 1996
Private Placement, (iii) 60,000 shares of Common Stock and
120,000 shares underlying warrants ("May 1996 Warrants") issuable
upon exercise of a purchase option ("UPO") issued to Whale in
connection with a private placement consummated by the Company in
May 1996 ("May 1996 Private Placement") and (iv) 150,000 shares
of Common Stock and 150,000 shares underlying Public Warrants
issuable to Whale pursuant to the warrant issued to Whale in
connection with the Company's IPO ("Underwriter's Warrant"). All
of the shares underlying the UPO and the Underwriter's Warrant
are held in the name of Whale Securities Co., L.P. for the
account of its equity owners and certain of its employees,
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pending transferability of such warrants pursuant to the rules
of the National Association of Securities Dealers, Inc.
(15) Includes 1,880,000 and 120,000 shares of Common Stock underlying
December 1996 Warrants owned by Wheatley and Wheatley Foreign,
respectively. Such entities are controlled by Wheatley Partners
LLC, a Delaware limited liability company which is the general
partner of Wheatley and a general partner of Wheatley Foreign.
(16) Includes those shares of Common Stock deemed to be included in
Messrs. Finkel, Wasserson, McCabe, Kaufman, Tobin and Ptalis'
respective beneficial ownership as described in notes 2, 3, 4, 5,
6 and 7 above. Also includes 18,750 shares of Common Stock
issuable upon exercise of currently exercisable options held by
Maria Bruzzese, Chief Financial Officer of the Company. Also
includes 1,000 shares of Common Stock and 1,000 shares underlying
Public Warrants beneficially owned by Ms. Bruzzese. Does not
include 6,250 shares underlying options granted to Ms. Bruzzese,
which vest in October 1997.
Section 16(a) of the Exchange Act requires the Company's
directors and executive officers and persons who beneficially own more than ten
percent of the Company's Common Stock to file with the Securities and Exchange
Commission ("Commission") initial reports of ownership and reports of changes in
ownership of Common Stock. Executive officers, directors and greater-than-ten
percent stockholders are required by Commission regulation to furnish the
Company with copies of all such reports they file. To the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company
and written representations that no other reports were required, during the year
ended December 31, 1996, all filings under Section 16(a) were made as required.
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<PAGE>
AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION TO EFFECTUATE A
ONE-FOR-THREE REVERSE STOCK SPLIT
General
The Board of Directors and Majority Stockholders have approved a
proposal to amend the Amended and Restated Certificate of Incorporation of the
Company to effect the Reverse Split. The complete text of the Amendment is set
forth in Exhibit A to this Information Statement; however, such text is subject
to change as may be required by the Delaware Secretary of State. Upon filing of
the Amendment with the Delaware Secretary of State, the Reverse Split will be
effective, and each certificate representing shares of Common Stock outstanding
immediately prior to the Reverse Split ("Old Shares") will be deemed
automatically without any action on the part of the stockholders to represent
one-third the number of shares of Common Stock after the Reverse Split ("New
Shares"); provided, however, that no fractional New Shares will be issued as a
result of the Reverse Split. In lieu thereof, each stockholder whose Old Shares
are not evenly divisible by three will receive one additional New Share for the
fractional New Share that such stockholder would otherwise be entitled to
receive as a result of the Reverse Split. After the Reverse Stock Split becomes
effective, stockholders will be asked to surrender certificates representing Old
Shares in accordance with the procedures set forth in a letter of transmittal to
be sent by the Company. Upon such surrender, a certificate representing the New
Shares will be issued and forwarded to the stockholders, however, each
certificate representing Old Shares will continue to be valid and represent New
Shares equal to one-third the number of Old Shares (plus one additional New
Share where such Old Shares are not evenly divisible by three).
The number of shares of capital stock authorized by the Amended and
Restated Certificate of Incorporation will not change as a result of the
proposed Reverse Split. The Common Stock issued pursuant to the Reverse Split
will be fully paid and nonassessable. The voting and other rights that presently
characterize the Common Stock will not be altered by the Reverse Split.
Purposes of the Proposed Reverse Split
The Board of Directors believes the Reverse Split is desirable for
several reasons. The Reverse Split should enhance the acceptability of the
Common Stock by the financial community and investing public. The reduction in
the number of issued and outstanding shares of Common Stock caused by the
Reverse Split is expected to increase the market price of the Common Stock. A
variety of brokerage house policies and practices tend to discourage individual
brokers within those firms from dealing with lower priced stocks. Some of those
policies and practices pertain to the payment of broker's commissions and to
time consuming procedures that function to make the handling of lower priced
stocks economically unattractive to brokers. In addition, the structure of
trading commissions also tends to have an adverse impact upon holders of lower
priced stock because the brokerage commission on a sale of lower priced stock
generally represents a higher percentage of the sales price than the commission
on a relatively higher priced issue. The proposed Reverse Split should result in
a price level for the Common Stock that will reduce, to some extent, the effect
of the above-referenced policies and practices of brokerage firms and diminish
the adverse impact of trading commissions on the market for the Common Stock.
The expected increased price level may also encourage interest and trading in
the Common Stock and possibly promote greater liquidity for the Company's
stockholders, although such liquidity could be adversely affected by the reduced
number of shares of Common Stock outstanding after the Effective Date. Finally,
the Board of Directors expects the Reverse Split to help the Company meet the
minimum inclusion standards established by the Nasdaq Stock Market
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necessary for Nasdaq National Market listing. Although the Company is currently
traded on the Nasdaq SmallCap Market, it hopes to be able to apply for and
achieve National Market listing in the future, although there can be no
assurance of this.
However, there can be no assurance that any or all of these effects
will occur, including, without limitation, that the market price per New Share
of Common Stock after the Reverse Split will be three times the market price per
Old Share of Common Stock before the Reverse Split, or that such price will
either exceed or remain in excess of the current market price. Further, there is
no assurance that the market for the Common Stock will be improved. Stockholders
should note that the Board of Directors cannot predict what effect the Reverse
Split will have on the market price of the Common Stock.
Effect of the Reverse Split
The Reverse Split will be effected by means of filing the Amendment
with the Delaware Secretary of State. Pursuant to the regulations promulgated
under the Exchange Act, the authorization of the Reverse Split by the Board of
Directors and Majority Stockholders shall not become effective until twenty (20)
days after the Company has mailed this Information Statement to the stockholders
of the Company. Promptly following the expiration of this twenty (20) day
period, the Company intends to file the Amendment with the Delaware Secretary of
State and the Reverse Split will become effective as of 5:00 p.m., Eastern
Standard Time, on the date of such filing ("Effective Date"). Without any
further action on the part of the Company or the stockholders, after the Reverse
Split, the certificates representing Old Shares will be deemed to represent
one-third the number of New Shares (plus one additional New Share where such Old
Shares are not evenly divisible by three).
Pursuant to the General Corporation Law of Delaware, the Company's
stockholders are not entitled to dissenters' rights of appraisal with respect to
the Amendment to effect the Reverse Split.
The Company has authorized capital stock of 35,000,000 shares of Common
Stock. The authorized capital stock will not be changed by reason of the Reverse
Split. As of February 14, 1997, the number of issued and outstanding Old Shares
was 5,563,632. The following table illustrates the principal effects of the
proposed Reverse Split and decrease in outstanding Common Stock assuming no
additional shares of Common Stock are issued prior to the Effective Date as a
result of the exercise of any options or warrants:
<TABLE>
<CAPTION>
Shares of Prior to Proposed After Proposed
Common Stock Reverse Split Reverse Split
- ------------ ------------- -------------
<S> <C> <C>
Authorized .............. 35,000,000 35,000,000
Outstanding ............. 5,563,632 1,854,544(1)
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<FN>
(1) Does not include New Shares to be issued in lieu of fractional shares.
</FN>
</TABLE>
The Common Stock is currently registered under Section 12(b) of the
Exchange Act and, as a result, the Company is subject to the periodic reporting
and other requirements of the Exchange Act. The Reverse Split will not effect
the registration of the Common Stock under the Exchange Act. After the Effective
Date, trades of the New Shares will be reported on the Nasdaq SmallCap Market
under
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the symbol "GTST." The New Shares also will be listed on the Boston Stock
Exchange under the symbol "GTL."
Effect on Market for Common Stock. On February 14, 1997, the closing
sale price of the Common Stock on Nasdaq was $3-15/16 per share. By decreasing
the number of shares of Common Stock outstanding without altering the aggregate
economic interest in the Company represented by such shares, the Board of
Directors believes that the trading price will be increased to a price more
appropriate for a publicly-traded security.
Effect on Outstanding Options, Warrants and Convertible Debentures of
the Company. As of February 14, 1997, the Company had outstanding options to
purchase 1,174,927 shares of Common Stock with per share exercise prices ranging
from $0.66 to $6.125. 707,500 of these options were issued pursuant to the
Company's 1994 Performance Equity Plan ("1994 Plan") and 467,427 were issued
outside of the 1994 Plan ("Nonplan Options"). In addition, as of February 14,
1997, the Company had outstanding 4,141,678 Public Warrants with an exercise
price of $4.00 per share and 3,521,255 other warrants ("Other Warrants") with
per share exercise prices ranging from $2.50 to $5.125. The Company also has
outstanding Convertible Debentures in principal amount of $2,706,000 that are
convertible at a conversion price of $3.088 per share into an aggregate of
876,241 shares of Common Stock. Upon the effectiveness of the Reverse Split, the
1994 Plan, the Nonplan Options, the Public Warrants, the Other Warrants and the
Convertible Debentures provide for a proportional downward adjustment to the
number of shares subject to outstanding options, warrants and debentures and a
corresponding upward adjustment in the per share exercise or conversion prices
to reflect the Reverse Split.
Effect on Legal Ability to Pay Dividends. The holders of shares of the
Common Stock are entitled to receive distributions of cash or other property, if
any, that may be declared from time to time by the Board of Directors in its
discretion from funds legally available therefor, subject to the dividend
priority of the holders of preferred stock of the Company, if any. Although the
Reverse Split will have an immediate effect on the Company's capital in excess
of par value, the Reverse Split and its impact on capital in excess of par value
will not affect potential distributions to the Company's stockholders. The
Company, however, has never paid cash dividends on the Common Stock and has no
plans to pay cash dividends in the foreseeable future. The current policy of the
Board of Directors is to retain all available earnings for use in the operation
and expansion of the Company's business. Any future dividends will depend upon
the Company's earnings, capital requirements, financial condition and other
relevant factors. Additionally, certain covenants contained in the Debentures
currently prohibit the Company from declaring or paying cash dividends.
Exchange of Stock Certificates
As soon as practicable after the Effective Date, the Company will send
a letter of transmittal to each holder of record of Old Shares outstanding on
the Effective Date. The letter of transmittal will contain instructions for the
surrender of certificate(s) representing such Old Shares to Continental Stock
Transfer & Trust Company, the Company's exchange agent ("Exchange Agent"). Upon
proper completion and execution of the letter of transmittal and return thereof
to the Exchange Agent, together with the certificate(s) representing Old Shares,
a stockholder will be entitled to receive a certificate representing the number
of New Shares into which his Old Shares have been reclassified and changed as a
result of the Reverse Split.
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Stockholders should not submit any certificates until requested to do
so. No new certificate will be issued to a stockholder until he has surrendered
his outstanding certificate(s) together with the properly completed and executed
letter of transmittal to the Exchange Agent.
Federal Income Tax Consequences
The following summary of the federal income tax consequences of the
Reverse Split as contemplated in the Amendment is not, and should not be relied
on as, a comprehensive analysis of the tax issues arising from or relating to
the proposed Amendment. ACCORDINGLY, STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX
ADVISORS FOR AN ANALYSIS OF THE EFFECT OF THE TRANSACTION CONTEMPLATED BY THE
PROPOSED AMENDMENT ON THEIR RESPECTIVE TAX SITUATIONS.
The transactions contemplated by the Amendment constitute a
"recapitalization" to the Company and its stockholders to the extent that issued
shares of Common Stock are exchanged for a reduced number of shares of Common
Stock. Therefore, neither the Company nor its stockholders will recognize any
gain or loss for federal income tax purposes as a result thereof.
The shares of Common Stock to be issued to each stockholder will have
an aggregate basis, for computing gain or loss, equal to the aggregate basis of
the shares of Common Stock held by such stockholder immediately prior to the
Effective Date. A stockholder's holding period for the shares of Common Stock to
be issued will include the holding period for the shares of Common Stock held
thereby immediately prior to the Effective Date provided that such shares of
Common Stock were held by the stockholder as capital assets on the Effective
Date.
Miscellaneous
The Board of Directors may abandon the proposed Reverse Split at any
time prior to the Effective Date if for any reason the Board of Directors deems
it advisable to abandon the proposal. The Board of Directors may consider
abandoning the proposed Reverse Split if it determines, in its sole discretion,
that the Reverse Split would aversely effect the ability of the Company to raise
capital or the liquidity of the Common Stock, among other things. In addition,
the Board of Directors may make any and all changes to the Amendment that it
deems necessary to file the Amendment with the Delaware Secretary of State and
give effect to the Reverse Split.
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INCORPORATION OF INFORMATION BY REFERENCE
The following documents, which are on file with the Commission
(Exchange Act File No. 1- 13478) are incorporated in this Information Statement
by reference and made a part hereof:
(a) Annual Report on Form 10-KSB for the year ended December 31,
1995, filed with the Commission on April 15, 1996, and
amendment thereto on Form 10-KSB/A, filed with the Commission
on September 6, 1996;
(b) Current Report on Form 8-K, dated March 1, 1996, filed with
the Commission on March 15, 1996, and amendments thereto on
Form 8-K/A, filed with the Commission on May 10, 1996 and
September 6, 1996, respectively;
(c) Quarterly Report on Form 10-QSB for the quarter ended March
31, 1996, filed with the Commission on May 20, 1996, and
amendment thereto on Form 10-QSB/A, filed with the Commission
on September 6, 1996;
(d) Quarterly Report on Form 10-QSB for the quarter ended June 30,
1996, filed with the Commission on August 19, 1996, and
amendment thereto on Form 10-QSB/A, filed with the Commission
on September 27, 1996;
(e) Proxy Statement dated July 11, 1996;
(f) Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1996, filed with the Commission on November 19,
1996, and amendment thereto on Form 10-QSB/A, filed with the
Commission on November 20, 1996; and
(g) Current Report on Form 8-K, dated December 20, 1996, filed
with the Commission on December 26, 1996.
The Company's Registration Statement on Form 8-A (which contains
descriptions of the Company's Common Stock and Public Warrants), which was
declared effective by the Commission on December 14, 1994, is also incorporated
in this Information Statement by reference and made a part hereof.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Information Statement and prior to the Effective Date shall be deemed to be
incorporated by reference in this Information Statement and shall be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference in this Information Statement and filed with
the Commission prior to the date of this Information Statement shall be deemed
to be modified or superseded for purposes of this Information Statement to the
extent that a statement contained herein, or in any other subsequently filed
document which is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Information Statement.
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The Company will provide without charge to each person to whom this
Information Statement is delivered, upon written or oral request of such person,
a copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Written or telephone requests
should be directed to the Company at 5697 Rising Sun Avenue, Philadelphia,
Pennsylvania 19120, Attention: Investor Relations (telephone number: (215)
342-7700).
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
Philadelphia, Pennsylvania
March 3, 1997
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EXHIBIT A
Form of Amended Article FOURTH
of the Amended and Restated Certificate of Incorporation
FOURTH: The total number of shares of stock which the Corporation is
authorized to issue is 36,000,000 shares, which are divided into two classes
consisting of (i) 35,000,000 shares of common stock, par value $.01 per share
("Common Stock") and (ii) 1,000,000 shares of preferred stock, par value $.01
per share ("Preferred Stock"), issuable in series as may be provided from time
to time by resolution of the Board of Directors. Effective upon the filing of
the Certificate of Amendment with the Delaware Secretary of State ("Effective
Date"), each three shares of Common Stock issued and outstanding or held in the
treasury of the Corporation immediately prior thereto shall, without any action
on the part of the holder thereof, be reclassified and changed into one fully
paid and nonassessable share of Common Stock and each holder of record of a
certificate for three or more shares of Common Stock as of the close of business
on the Effective Date shall be entitled to receive, as soon as practicable, and
upon surrender of such certificate, a certificate or certificates representing
one share of Common Stock for each three shares of Common Stock represented by
the certificate of such holder, with the next higher number of whole shares
being issued in lieu of fractional shares.
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