SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) October 28, 1999
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GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-13478 13-3698386
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
10 Stow Road, Suite 200, Marlton, New Jersey 08053
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (856) 797-3434
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 3. Bankruptcy or Receivership.
On October 28, 1999, all but two of the domestic subsidiaries of Global
Telecommunication Solutions, Inc. ("Company") filed voluntary petitions for
protection under chapter 11 of title 11 of the United States Code in the United
States Bankruptcy Court for the District of Delaware in Wilmington, which cases
are being jointly administered under case number 99-3923 (MFW). The filing
subsidiaries are referred to herein as the "Debtors."
As a result of the chapter 11 filings, the Debtors are managing the
business as debtors-in-possession subject to bankruptcy court approval for
certain actions. The Debtors elected to seek court protection to facilitate the
possible sale of their prepaid phonecard business. The Debtors are currently
negotiating with several potential buyers in connection with such sale.
Following the sale, the Company intends to focus on developing its two recently
formed subsidiaries which did not file for bankruptcy protection, TalkToGo.com,
Inc. and Imagine Telecom, Inc.
On October 29, 1999, the bankruptcy court approved a number of motions
filed by the Debtors on October 28, 1999, including motions relating to the
interim use of cash collateral, assurances to utility companies of future
performance, honoring prepaid phone cards, the payment of prepetition salaries,
wages and benefits, the payment of trust fund taxes, the consolidation of cash
management systems and the maintenance of bank accounts.
In addition, on October 28, 1999, the Company issued a press release
announcing the bankruptcy filing, which is filed as Exhibit 99.1 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Press Release
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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: November 5, 1999
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
By: /s/ Lee R. Montellaro
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Lee R. Montellaro, Chief Financial
Officer (and Principal Accounting
Officer)
EXHIBIT 99.1
GTS MOVES TO COMPLETE TRANSITION IN BECOMING AN INTERACTIVE
MARKETING COMPANY.
GTS INTENDS TO SELL CORE PHONECARD BUSINESS.
SUBSIDIARIES FILE VOLUNTARY PETITIONS UNDER CHAPTER 11 OF UNITED
STATES BANKRUPTCY CODE TO FACILITATE SALE
MARLTON, New Jersey, October 28, 1999 - - Global Telecommunication Solutions,
Inc. (OTC BB: GTST, GTSTW) ("GTS" or the "Company") today announced that it
intends to sell its legacy phonecard business to focus on developing its two
recently formed subsidiaries, TalkToGo.com, Inc. and Imagine Telecom, Inc. To
accomplish this, certain of the Company's subsidiaries have filed voluntary
petitions with the U.S. Bankruptcy Court for the District of Delaware under
Chapter 11 of the U.S. Bankruptcy Code. The subsidiaries elected to seek court
protection to facilitate the possible sale of their assets.
Randy Cherkas, President of GTS, stated, "The Company's long history of losses
in the prepaid phonecard business, coupled with an increasingly competitive
environment, has forced us to conclude that our only viable alternative was to
exit this business. Our intent is to sell the assets of our phonecard operation
to a strategic buyer who will continue to run the business."
According to Lee Montellaro, the Company's Chief Financial Officer, "GTS will
not realize any funds from the disposition of these subsidiaries since, at June
30, 1999, these subsidiaries had assets with a book value of approximately $9
million and approximately $22 million in liabilities, and all sale proceeds will
be used to pay obligations. Additionally, while hurdles remain, we believe this
plan should leave GTS substantially debt free and in a position to move
forward."
Mr. Cherkas continued "With GTS now refocused, its continuing operations will
utilize its promotional expertise to bring innovative permission marketing
opportunities to prospective clients. Both TalkToGo.com and Imagine Telecom are
focusing on areas of one-to-one marketing that should allow for higher operating
margins and growth, utilizing not only telephony but also the Internet and
wireless communications.
Except for any historical information contained herein, the matters
discussed in this press release contain forward-looking statements that involve
risks and uncertainties which are described in the Company's SEC reports,
including the Company's Form 10-KSB for the year ended December 31, 1998, Form
10-QSB for the quarter ended June 30, 1999 and the Company's Prospectus dated
July 9, 1997. Such risks may include, without limitation, delays or the
inability of the company's subsidiaries to complete the plan of reorganization;
the availability and terms of capital in light of recent losses, cash flow
shortfalls and the Chapter 11 bankruptcy filings; adverse actions which may be
taken by creditors and the outcome of various bankruptcy proceedings and the
Company's ability to attract customers and strategic partners given its current
financial position.
