U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

    For the quarterly period ended               March 31, 1998
                                              -------------------

( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

    For the transition period from _______________ to _______________________


                         Commission file number 1-13478

                    GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


        Delaware                                    13-3698386
-------------------------------              -------------------------------
(State or other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)



            5697 Rising Sun Avenue, Philadelphia, Pennsylvania 19120
            --------------------------------------------------------
                    (Address of principal executive offices)

                                 (215) 342-7700
                  ---------------------------------------------
                 (Issuer's telephone number including area code)

          -----------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes x No ___

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date. As of May 14, 1998, the issuer had
outstanding 5,991,772 shares of Common Stock, par value $.01 per share.


<PAGE>



            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES

                                                                          Page
                                                                         ------

Part I.  Financial Information
------------------------------

Item I.  Consolidated Financial Statements

         Consolidated Balance Sheets - March 31, 1998 (unaudited) and
         December 31, 1997..................................................3

         Consolidated Statements of Operations  - Three months ended 
         March 31, 1998 and 1997 (unaudited)................................4

         Consolidated Statements of Cash Flows  - Three months ended 
         March 31, 1998 and 1997 (unaudited)................................5

         Notes to Consolidated Financial Statements.........................6

Item 2.  Management's Discussion and Analysis of Financial 
         Condition and Results of Operations...............................11


Part II. Other Information
----------------------------

         Item 2.  Changes in Securities....................................14

         Item 6.  Exhibits and Reports on Form 8-K.........................15

         Signatures........................................................16



                                        2

<PAGE>
            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   
<TABLE>
<CAPTION>
                                                                             (Unaudited)
                                                                               March 31,         December 31,
                                                                        -------------------- ------------------
                                                                                1998                  1997
                                                                        ----------------     ------------------

                                     Assets
<S>                                                                       <C>                     <C>
Current assets:
    Cash and cash equivalents                                              $    669,129            $   7,867,566
    Accounts receivable, net of reserve for doubtful accounts of 
        $778,261 and $570,000                                                 4,018,425                2,636,878
    Inventories                                                                 389,845                  174,112
    Deferred costs                                                               36,955                   32,764
    Other assets                                                                103,192                  160,935
    Due from related parties (Note 4)                                           625,000                      --
                                                                        ----------------      ------------------
         Total current assets                                                 5,842,546               10,872,255
                                                                        ----------------      ------------------

Goodwill, net                                                                14,557,198                3,516,344
Property and equipment, net                                                   2,091,601                1,485,348
Other assets, net                                                               313,032                  378,911
                                                                        ----------------      ------------------
         Total assets                                                      $ 22,804,377             $ 16,252,858
                                                                        ================      ==================

                      Liabilities and Stockholders' Equity

Current liabilities:
    Accounts payable                                                      $  2,445,134             $   2,199,134
    Accrued expenses                                                         3,009,270                 2,165,986
    Deferred revenues                                                        3,679,867                 1,677,615
    Estimated sales and excise tax liability                                 3,781,283                 3,663,285
    Notes payable, net current                                               2,529,737                   450,000
    Notes payable to related parties, current (Note 4)                       1,000,000                        -
    Capital lease obligation, current                                           34,362                    95,298
                                                                        ----------------      ------------------
          Total current liabilities                                         16,479,653                10,251,318
                                                                        ----------------      ------------------

Notes payable, net                                                                  -                  1,886,982
Notes payable  to related parties (Note 4)                                   1,000,000                        -
Convertible notes payable                                                    2,599,750                 2,599,750
                                                                        ----------------      ------------------
          Total liabilities                                                 20,079,403                14,738,050
                                                                        ----------------      ------------------

Commitments and Contingencies (Notes 6, 9)

Stockholders' Equity
    Preferred stock - $.01 par value, authorized 1,000,000 shares;
        none issued and outstanding                                                 -                       -
    Common stock, $.01 par value, authorized 35,000,000 shares;
         issued and outstanding 5,991,772 and 5,084,870                         59,917                   50,848
    Additional paid in capital                                              44,685,809               39,689,698
    Accumulated deficit                                                    (41,742,696)             (37,942,443)
    Deferred compensation                                                     (305,870)                (294,650)
    Cumulative foreign currency translation adjustment                          27,814                   11,355
                                                                        ----------------     ------------------
            Total stockholders' equity                                       2,724,974                1,514,808
                                                                        ----------------     ------------------
            Total liabilities and stockholders' equity                   $  22,804,377             $ 16,252,858
                                                                        ================     ==================
</TABLE>


         The accompanying notes are an integral part of these statements

                                       3


<PAGE>


            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                     Three months ended
                                                                                          March 31,
                                                                             ----------------------------------
                                                                                  1998                 1997
                                                                             ---------------    ---------------
<S>                                                                           <C>                   <C>        
Net sales                                                                     $  5,134,396          $ 3,688,153
Cost of sales                                                                    5,194,110            2,855,357
Estimated costs of carrier default (Note 4)                                        550,000                  -
                                                                             ---------------    ---------------

          Gross profit (loss)                                                     (609,714)             832,796
                                                                             ---------------    ---------------

Selling, general and adminsitrative expenses                                     2,480,318            2,360,607
Depreciation and amortization                                                      369,656              428,252
                                                                             ---------------    ---------------

          Operating loss                                                        (3,459,688)          (1,956,063)
                                                                             ---------------    ---------------

Interest income                                                                     54,935                3,901
Interest expense                                                                   395,500              322,753
                                                                             ---------------    ---------------

          Loss before income taxes                                              (3,800,253)          (2,274,915)

Income taxes                                                                            -                    -
                                                                             ---------------    ---------------

Net loss                                                                       $(3,800,253)         $(2,274,915)
                                                                             ===============    ================

Basic and diluted loss per share                                               $     (0.68)         $     (1.23)
                                                                             ===============    ================

Weighted average shares outstanding - basic and diluted                          5,618,935            1,847,786
                                                                             ===============    ===============
</TABLE>



         The accompanying notes are an integral part of these statements

                                       4

<PAGE>

            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                       Three months ended
                                                                                            March 31,
                                                                              ---------------------------------
                                                                                     1998               1997
                                                                             ---------------    --------------
<S>                                                                              <C>               <C>
Operating activities:
Net loss                                                                                             
                                                                                   (3,800,253)      $(2,274,915)
Adjustment to reconcile net loss to net cash used in operating activities:

    Depreciation and amortization                                                     369,656           428,252
    Provision for bad debts                                                           208,261                -
    Amortization of deferred compensation                                             187,380            73,789
    Amortization of unearned discount                                                 192,755           192,755
    Amortization of deferred financing charges                                         27,843             5,001
    Issuance of stock as compensation                                                      -             50,000
    Loss on disposal of fixed assets                                                       -             19,912
Changes in operating assets and liabilities, net of effect of acquisitions:
    Accounts receivable                                                           (1,589,808)           241,544
    Inventories                                                                     (215,733)           (39,238)
    Deferred costs                                                                     (4,191)          (92,213)
    Prepaids and other assets                                                          57,743           (56,588)
    Other assets                                                                       38,036           (26,848)
    Accounts payable                                                                  246,000           450,144
    Accrued expenses                                                                  256,151           190,992
    Deferred revenues                                                               2,002,252          (383,464)
    Sales and excise taxes payable                                                    117,998           301,870
                                                                              ---------------    --------------
            Net cash used in operating activities                                 (1,905,910)         (919,007)
                                                                              ---------------    --------------

Investing activities:
    Purchases of property and equipment                                             (735,182)           (69,901)
    Acquisitions and related costs                                                (4,512,868)                -
                                                                              ---------------    --------------
            Net cash used in investing activities                                 (5,248,050)           (69,901)
                                                                              ---------------    --------------

Financing Activities:
    Proceeds from exercise of options                                                     -               4,374
    Payments to affiliates                                                                -            (119,293)
    Payments on capital lease obligations                                            (60,936)           (12,104)
                                                                              ---------------    ---------------
            Net cash used by financing activities                                    (60,936)          (127,023)
                                                                              ---------------    --------------

            Effects of exchange rates on cash                                         16,459               (773)
                                                                              ---------------    --------------
               Net decrease in cash                                               (7,198,437)        (1,116,704)
Cash and cash equivalents, beginning of period                                     7,867,566          1,352,322
                                                                              ---------------     --------------
Cash and cash equivalents, end of period                                        $    669,129       $    235,618
                                                                              ===============     ==============

Supplemental disclosures:

    Cash paid for interest                                                      $         -       $      9,328
                                                                              ===============    ==============
    Deferred compensation relating to options and warrants                      $    198,600      $    151,648
                                                                              ===============    ==============
    Conversion of convertible notes payable into common stock                   $         -       $    106,500
                                                                              ===============    ==============
    Issuance of common stock in connection with acquisition                       $ 4,806,580     $         -
                                                                              ===============    ==============
    Issuance of notes payable in connection with acquisition                      $ 2,000,000     $         -
                                                                              ===============    ==============
</TABLE>

         The accompanying notes are an integral part of these statements

                                       5



<PAGE>



            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                 March 31, 1998


(1)      Business and Basis of Presentation

         Business

         Global   Telecommunication   Solutions,   Inc.  (the   "Company")   was
         incorporated  on December 23, 1992 and is engaged in the  marketing and
         distribution of prepaid phone cards.  The Company's phone cards provide
         consumers  access  to  long  distance  service  through  its  switching
         facilities and long distance network arrangements.

         The  majority of the  Company's  customers  are retail  establishments,
         distributors  and  businesses  which sell phone  cards to the  ultimate
         user,  or which  acquire the  Company's  phone  cards to promote  their
         business or products.

         Basis of Presentation

         The accompanying  unaudited consolidated financial statements have been
         prepared in accordance with generally  accepted  accounting  principles
         for interim  financial  information  and with the  instructions to Form
         10-QSB and Item  310(b) of  Regulation  S-B.  Accordingly,  they do not
         include all of the  information  and  footnotes  required by  generally
         accepted accounting  principles for complete financial  statements.  In
         the  opinion  of  management,  all  adjustments  (consisting  of normal
         recurring accruals)  considered  necessary for a fair presentation have
         been included.  Operating  results for the three months ended March 31,
         1998 are not necessarily indicative of the results that may be expected
         for the year ending December 31, 1998.

(2)      Loss Per Share

         Weighted  average  shares of common  stock for the three  months  ended
         March 31, 1998 and 1997 does not include  common stock  equivalents  as
         their effect would be anti-dilutive.

(3)      Reclassifications

         Certain  reclassifications  have  been  made to the  1997  consolidated
         financial statements to conform to the 1998 presentation.

(4)      Acquisitions

         On February 6, 1998 ("Merger Date"),  the Company  acquired,  through a
         merger,  all of the  outstanding  capital stock of Networks  Around the
         World,  Inc.  ("NATW") for a purchase price comprised of (i) $2,000,000
         in cash,  (ii) an aggregate of 505,618 shares of Common Stock and (iii)
         $1,000,000  aggregate  principal  amount  of  promissory  notes  ("NATW
         Notes"),  secured by substantially  all of the assets of NATW. The NATW
         Notes  accrue  interest  at the rate of 6% per annum and are payable as
         follows:  (I) one-half of principal  and  interest  accrued  thereon on
         November  1,  1998 and (ii)  four  equal  payments  of  $125,000,  plus
         interest  accrued thereon,  on April 1, 1999, July 1, 1999,  October 1,
         1999 and January 1, 2000.  In addition,  the Company may be required to
         pay an  additional  $2,000,000  (the "Earn  Out") in  consideration  if
         certain sales and financial objectives are achieved. In April 1998, the
         former  shareholders  agreed  to  defer  payment  of  an  aggregate  of
         $1,000,000 of NATW Notes and Earn Out from 1998 to January 1999.

         Also on the Merger Date, the Company acquired, through a merger, all of
         the  outstanding  capital  stock of  Centerpiece  Communications,  Inc.
         ("CCI") for a purchase price  comprised of (i) $1,500,000 in cash, (ii)
         401,284  shares  of  Common  Stock  and  (iii) a  $1,000,000  aggregate
         principal amount promissory note ("CCI Note"), secured by substantially
         

                                        6

<PAGE>


         all of the assets of CCI. The CCI Note accrues interest at the rate of
         8% per annum and is payable as follows:  (i)  $250,000  plus  interest
         accrued  thereon on October 31,  1998,  (ii)  $250,000  plus  interest
         accrued  thereon on January 1, 1999 and (iii) four equal  payments  of
         $125,000,  plus interest  accrued  thereon,  on April 1, 1999, July 1,
         1999,  October 1, 1999 and January 1, 2000. In April 1998,  the former
         shareholder  of CCI agreed to defer  payment of $250,000 of CCI Notes,
         plus interest, from October 31, 1998 to January 1999.

         The mergers were accounted for as a purchase.  Accordingly,  the assets
         and liabilities were recorded at their estimated fair value at the date
         of the mergers and the operating  results of NATW and CCI were included
         in the  consolidated  statement of operations from the Merger Date. The
         following is a preliminary allocation of the purchase price:

                                          CCI          NATW            TOTAL
                                        -------       -------         -------  
Shares of common stock issued           401,284       505,618         906,902

Estimated average price per share
of restricted common stock 20
days prior to the closing date
(using a 15% discount to market
price)                                    $5.30         $5.30           $5.30

Common stock                          2,126,805     2,679,775       4,806,580

Notes payable to related parties,
current                                 500,000       500,000       1,000,000

Notes payable to related parties,
long term                               500,000       500,000       1,000,000

Cash consideration                    1,500,000     2,000,000       3,500,000

Estimated balance sheet
adjustment                               89,446        91,852         181,318

Estimated carrier obligation in
connection with mergers, net            250,000       625,000         875,000

Estimated accrued acquisition
costs                                    50,000        50,000         100,000
                                         ------        ------         -------

Total consideration                   5,016,251     6,446,627      11,462,898

Net book value of assets acquired       114,446       116,852         231,318

Goodwill                             $4,901,805    $6,329,775     $11,231,580
                                      =========     =========      ==========

          Pursuant  to the  merger  agreement  with  NATW,  the  Company  may be
          required to pay an additional  $2,000,000 in  consideration if certain
          sales  and  financial  objectives  are  achieved.   Accordingly,  upon
          occurrence of such events, the additional  consideration will increase
          goodwill.

          The  Company has not  allocated  any of the excess  purchase  price to
          other intangible assets such as the value of non-compete agreements or
          customer lists as such valuations are not currently available.  In the
          event such other intangible  assets are identified in the future,  the
          useful life of such assets may differ from the  goodwill  amortization
          period  of 15 years  currently  reflected  in the pro  forma  combined
          statement of operations and  appropriate  adjustments to the financial
          statements will be made.

          Pursuant  to the  respective  merger  agreements,  the Company and the
          former  shareholders  of NATW and CCI  agreed to share  certain  costs
          related   to   any   underlying    carrier's    failure   to   provide
          telecommunications services to phone


                                        7

<PAGE>


          cards  purchased  by NATW and CCI prior to the  mergers.  In  February
          1998,  Access  Telecom,   Inc.  ("Access"),   a  primary  provider  of
          telecommunications  services to each of NATW and CCI, ceased providing
          telecommunications  services to phone  cards  acquired by NATW and CCI
          prior to the mergers (the "Access Phone Cards"). The Company estimates
          that the cost to  provide  telecommunications  services  to the Access
          Phone Cards will aggregate approximately  $1,500,000.  For purposes of
          the financial  statements  contained herein,  $625,000 and $850,000 of
          the estimated costs has been allocated to the former  shareholders and
          the Company, respectively.


         In addition to the $1,500,000  indicated above, the Company paid Access
         $350,000 for cards purchased subsequent to the Merger Date for which it
         received no services.  Additionally,  the Company  spent  approximately
         $200,000 to print  cards which could only be used on Access's  platform
         and, therefore,  are of no use to the Company.  Accordingly,  the total
         estimated aggregate carrier default of $550,000 was recorded in cost of
         goods sold.

         Pursuant to the respective merger agreements, the purchase price was to
         be adjusted subsequent to the Merger Date by an amount equal to cash of
         the  acquired  company  plus  the  net  realizable  value  of  accounts
         receivable of the acquired  company minus  current  liabilities  of the
         acquired   company  as  of  the  Merger   Date  (the   "Balance   Sheet
         Adjustment").   The  final  Balance  Sheet   Adjustment  has  not  been
         determined and,  accordingly,  the estimated  amounts recorded at March
         31, 1998 may be different than the actual amounts owed.

         The following  unaudited  combined pro forma  information  reflects the
         results  of  operations  assuming  the CCI and  NATW  mergers  had been
         consummated on January 1, 1998.

                                                   Three Months Ended
                                                     March 31, 1998
                                                   ------------------

                  Net sales                           $ 7,448,915
                  Net loss                            $(4,331,272)
                  Net loss per share                      $ (0.72)

         Pro  forma  adjustments  include  recording   amortization  expense  on
         goodwill, interest expense on the notes payable to former shareholders,
         and the elimination of intercompany sales and income taxes.

         The pro forma results of operations are not  necessarily  indicative of
         the actual  results of  operations  that  would have  occurred  had the
         purchase  been made at the  beginning of the year,  or of results which
         may occur in the future.

(5)      New Accounting Pronouncements

          In June 1997, the Financial Accounting Standards Board ("FASB") issued
          Statement  of  Financial  Accounting  Standards  No.  130,  "Reporting
          Comprehensive  Income" ("SFAS 130").  SFAS 130 requires that all items
          that are  required to be  recognized  under  accounting  standards  as
          components  of  comprehensive   income  be  reported  in  a  financial
          statement  that  is  displayed  with  the  same  prominence  as  other
          financial statements. The Company has adopted this statement effective
          January 1, 1998. The Company's  only component of other  comprehensive
          income  is the  foreign  currency  translation  adjustment.  The total
          comprehensive  loss is $3,783,794  and $2,275,688 for the three months
          ended March 31, 1998 and 1997, respectively.

(6)      Estimated Sales and Excise Tax Liability

         In  November  1997,  Congress  enacted  legislation  that  specifically
         addressed the  application of Federal excise tax to the sale of prepaid
         phone cards. Accordingly,  the Company began to file Federal excise tax
         returns.  However,  the taxation of prepaid phone cards is evolving and
         is not specifically  addressed in certain state  jurisdictions in which
         the Company  does  business.  The Company has not filed any state sales
         and use tax returns nor has it remitted  any such taxes to state taxing
         authorities.

                                        8

<PAGE>



         While the Company  believes  it has  adequately  provided  for any such
         taxes and related  compliance costs, it is possible that certain states
         may enact legislation or interpret current laws in a manner which could
         result in additional tax liabilities which could be material.

         Deferred Compensation

         In  January  1998,  the  Company  entered  into a  one-year  consulting
         agreement with JEB Partners,  pursuant to which JEB Partners  agreed to
         provide  investor  relations  consulting  services to the  Company.  In
         consideration for providing such services,  the Company agreed to issue
         JEB Partners  warrants to purchase  60,000 shares of Common Stock at an
         exercise  price  of  $6.125  per  share.  Such  options  are  currently
         exercisable  and  will  remain  exercisable  until  January  2003.  The
         estimated  fair value of these  options of  $198,600  was  recorded  as
         deferred compensation.

(8)      Stock Option Re-pricing

         In January  1998,  the Company  reduced the  exercise  price of 196,683
         outstanding  options to  purchase  common  stock from  exercise  prices
         ranging  from $7.88 to  $18.38,  to the then fair  market  value of the
         common stock of $6.56.

(9)      Liquidity

         The Company incurred significant net losses and negative cash flow from
         operations  during  1996,  and  1997.  Due in part to the  NATW and CCI
         mergers,  and a  continuation  of  negative  cash flow from  operations
         through  March 31,  1998,  the  Company's  cash balance has declined to
         approximately  $500,000 at May 13, 1998. Further,  management's current
         projections  indicate  that  the  Company  will  continue  to  generate
         operating  losses and negative  cash flow from  operations  through the
         remainder of 1998, making it necessary for the Company to raise capital
         during 1998 in order to satisfy its  obligations as they become due. To
         that end, the Company  completed a private  placement  (the "April 1998
         Private  Placement"),  which  generated  net proceeds of  approximately
         $1,100,000  (see  Note  10) and has  obtained  a  $2,000,000  financing
         commitment  ("$2,000,000  Commitment") (see Note 10). In addition,  the
         Company has obtained  deferrals  of certain  promissory  notes  payable
         aggregating  $3,650,000  from the  fourth  quarter of 1998 to the first
         quarter of 1999. The Company  believes that the proceeds from the April
         1998 Private Placement and the $2,000,000 Commitment, together with the
         deferrals of certain promissory notes payable,  will enable the Company
         to meet its obligations through the end of 1998.  However,  the Company
         has significant  loan payments due in the first quarter of 1999,  which
         it will not be able to satisfy unless it obtains  additional  financing
         or loan  payment  deferrals.  The  Company  does  not  have  any  other
         arrangements with respect to, or sources of,  additional  financing and
         there can be no assurance that  additional  financing will be available
         to the Company on commercially reasonable terms, or at all. The failure
         to obtain such  financing  could have a material  adverse effect on the
         Company.

(10)     Subsequent Events

         In April 1998, the Company completed the April 1998 Private  Placement,
         pursuant to which the Company  derived gross proceeds of  approximately
         $1,100,000  through  the sale of  $1,250,000  convertible  subordinated
         promissory  notes ("April 1998 Notes") and warrants to purchase 178,571
         shares of Common Stock ("April 1998 Warrants"). The April 1998 Warrants
         are exercisable at a price equal to the lesser of (i) $7.00 or (ii) the
         price  per  share  at  which  the  Company  issues  Common  Stock  in a
         transaction  with aggregate  gross  proceeds of $4,000,000  ("Qualified
         Private  Placement").  The April 1998  Warrants are  exercisable  until
         April 2001. The April 1998 Notes accrue interest at the rate of 10% per
         annum and are payable on the earlier of January 15, 1999 or the date of
         the  closing of a Qualified  Private  Placement.  The holders  have the
         right at any time to convert all or any portion of the April 1998 Notes
         into the number of shares of common  stock  determined  by dividing the
         unpaid  principal  amount of the April 1998 Notes by the lesser of: (i)
         $7.00 or (ii) the per share purchase price being paid by the purchasers
         in the Qualified Private Placement.

          

                                        9

<PAGE>


          In April 1998, the Company  entered into an agreement with an investor
          pursuant to which the investor has agreed to acquire up to  $2,000,000
          of the Company's common stock or other securities at a discount to the
          market price of such securities.  The Company can require the investor
          to  acquire  the  securities  on thirty  days'  written  notice  until
          December  31,  1998.  In  consideration  thereof,  the Company  issued
          warrants to the investor to purchase 100,000 shares of Common Stock at
          an exercise  price of $7.50 per share.  The warrants  are  exercisable
          until April 13, 2001. In connection with  introducing this investor to
          the Company,  the Company granted to each of Messrs. Barry Rubenstein,
          a principal  stockholder of the Company,  and Eli Oxenhorn  options to
          purchase  50,000 shares of Common Stock at an exercise price of $7.125
          per share.  The options become  exercisable in September 1998 and will
          remain exercisable until April 2003.

                                       10

<PAGE>




                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

         When used in this Form 10-QSB and in future filings by the Company with
the Securities and Exchange  Commission ("SEC"), in the Company's press releases
and in oral statements made with the approval of an authorized executive officer
of the Company,  the words or phrases "will likely result," "management expects"
or "the Company  expects,"  "will  continue," "is  anticipated,"  "estimated" or
similar expressions (including  confirmations by an authorized executive officer
of the Company of any such expressions made by a third party with respect to the
Company)  are  intended  to  identify  "forward-looking  statements"  within the
meaning of the Private  Securities  Litigation  Reform Act of 1995.  Readers are
cautioned not to place undue  reliance on any such  forward-looking  statements,
each of which  speak only as of the date made.  Such  statements  are subject to
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected.  The Company has no  obligation  to public  release the result of any
revisions  which  may be  made  to any  forward-looking  statements  to  reflect
anticipated or unanticipated events or circumstances occurring after the date of
such statements.

Results of Operations

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997

         Net sales for the first  quarter of 1998 were  $5,134,396  compared  to
$3,688,153 for the first quarter of 1997. The primary reason for the increase in
net sales was due to the mergers in February 1998 of Networks  Around the World,
Inc.  ("NATW")  and  Centerpiece  Communications,  Inc.  ("CCI").  Net  sales of
promotional cards decreased to less than 1% of net sales in the first quarter of
1998 from 18% of net sales in the first quarter of 1997. The change in the sales
mix resulted  from the Company's  aggressive  pursuit of retail  programs  which
offer greater  discounts and commissions to retailers and/or reduced  per-minute
charges to consumers.

         The Company's gross margins  decreased to negative 12% of net sales for
the first quarter of 1998,  from 22% of net sales for the  comparable  period in
the prior year. The primary reason for the decrease in the gross margins was due
to carrier  default costs  aggregating  $550,000  associated with the default by
Access  Telecom,  Inc.  ("Access"),  a provider of long  distance  services that
ceased  providing such services on cards  purchased by the Company.  The margins
were  further  reduced  due to an  increase  in the sale of cards  with  reduced
per-minute  rates to  consumers  and a  reduction  in revenues  recognized  from
promotional phone card programs that historically sell at higher margins.

         Selling,   general  and  administrative  expenses  remained  relatively
constant,  increasing  slightly to  $2,480,318  (48% of net sales) for the first
quarter of 1998, compared to $2,360,607 (64% of net sales) for the first quarter
of 1997.  The Company  believes that these expenses will continue to decrease in
future periods as a percentage of sales.

         Depreciation  and  amortization  expense  decreased to $369,656 for the
first quarter of 1998 from $428,252 for the first quarter of 1997.  The decrease
was primarily due to the  impairment of goodwill for the year ended December 31,
1997. Additionally, only two months of amortization expense relating to the NATW
and CCI  mergers  was  recorded.  This  decrease  was offset by an  increase  in
depreciation  expense due to the  acquisition  of additional  telecommunications
switching equipment.

         Investment  and  interest  income was $54,395 for the first  quarter of
1998,  compared  to $3,901  for the first  quarter  of 1997.  The  increase  was
primarily due to interest  earned on the net proceeds from the Company's  public
offering consummated in July 1997.

         Interest  expense for the first  quarter of 1998  increased  to 395,500
from  $322,753 for the first  quarter of 1997,  primarily  due to an increase in
interest  expense  related to the  increase  in the accrual for sales and excise
taxes.

                                       11

<PAGE>



         For  the  foregoing  reasons,  the  Company  incurred  a  net  loss  of
$3,800,253  for the first quarter of 1998,  compared to a net loss of $2,274,915
for the first quarter of 1997.

Liquidity and Capital Resources

         At March  31,  1998,  the  Company  had cash  and cash  equivalents  of
$669,129 and a working capital  deficit of  $10,637,107,  compared to $7,867,566
and $620,937, respectively, at December 31, 1997.

         Net cash used in operating  activities for the three months ended March
31, 1998 of $1,905,910  was  primarily due to the Company's net loss,  offset by
non-cash  items  aggregating  $985,895 such as  depreciation  and  amortization,
provision for bad debts and financing  costs.  The cash used related to the loss
from operations was partially offset by increases in deferred revenues. Net cash
used in investing activities for the three months ended March 31, 1998 consisted
of $735,182 of capital  expenditures and $4,512,868  related to the NATW and CCI
mergers.

         In February 1998, the Company  acquired,  through a merger,  all of the
outstanding  capital  stock  of  NATW  for a  purchase  price  comprised  of (i)
$2,000,000  in cash,  (ii) an  aggregate  of 505,618  shares of Common Stock and
(iii) $1,000,000  aggregate principal amount of promissory notes ("NATW Notes"),
secured  by  substantially  all of the  assets of NATW.  The NATW  Notes  accrue
interest at the rate of 6% per annum and are payable as follows: (i) one-half of
principal and interest  accrued  thereon on November 1, 1998 and (ii) four equal
payments of $125,000,  plus interest accrued thereon,  on April 1, 1999, July 1,
1999,  October 1, 1999 and  January 1, 2000.  In  addition,  the  Company may be
required  to pay an  additional  $2,000,000  (the "Earn Out") to one of the NATW
stockholders  if certain sales and financial  objectives are achieved.  In April
1998, the former shareholders of NATW agreed to defer payment of an aggregate of
$1,000,000 of NATW Notes and Earn Out from 1998 to January 1999.

         Also in February 1998, the Company acquired,  through a merger,  all of
the  outstanding  capital  stock of CCI for a purchase  price  comprised  of (i)
$1,500,000 in cash,  (ii) 401,284  shares of Common Stock and (iii) a $1,000,000
aggregate   principal   amount   promissory   note  ("CCI  Note"),   secured  by
substantially  all of the assets of CCI.  The CCI Note  accrues  interest at the
rate of 8% per annum and is payable  as  follows:  (i)  $250,000  plus  interest
accrued thereon on October 31, 1998, (ii) $250,000 plus interest accrued thereon
on January 1, 1999 and (iii) four equal  payments  of  $125,000,  plus  interest
accrued thereon,  on April 1, 1999, July 1, 1999, October 1, 1999 and January 1,
2000. In April 1998,  the former  shareholder  of CCI agreed to defer payment of
$250,000 of the CCI Note, plus interest, from October 31, 1998 to January 1999.

         In February 1998,  Access, a primary provider of long distance services
to NATW and CCI prior to and after the respective mergers, ceased providing such
services  to the  prepaid  phone cards that it had sold to each of NATW and CCI,
despite  receiving payment for substantially all of the phone cards. In order to
meet  consumer  obligations,  the Company  was forced to purchase  approximately
$1,800,000 of telecommunications services from  other  carriers  through May 13,
1998.  Additional  payments may be required as a result of this  situation.  The
Company is pursuing recovery of all losses from Access Telecom.

         In April 1998, the Company  completed a private  placement ("April 1998
Private  Placement"),  pursuant to which the Company  derived gross  proceeds of
approximately $1,100,000 through the sale of $1,250,000 convertible subordinated
promissory  notes ("April 1998 Notes") and warrants  ("April 1998  Warrants") to
purchase 178,571 shares of Common Stock. The April 1998 Warrants are exercisable
at a price  equal to the  lesser  of:  (i)  $7.00 or (ii) the price per share at
which the Company  issues Common Stock in a  transaction  with  aggregate  gross
proceeds of $4,000,000 ("Qualified Private Placement").  The April 1998 Warrants
are  exercisable  until April 2001. The April 1998 Notes accrue  interest at the
rate of 10% per annum and are payable on the earlier of January 15, 1999 and the
date of the closing of a Qualified Private Placement. The holders have the right
at any time to  convert  all or any  portion  of the April  1998  Notes into the
number of shares of Common Stock  determined  by dividing  the unpaid  principal
amount of the April 1998 Notes by the lesser of: (i) $7.00 or (ii) the per share
purchase price being paid by the purchasers in the Qualified Private Placement.

         In April 1998,  certain  holders of the  December  1996 Notes agreed to
allow the  Company to defer  repayment  of an  aggregate  of  $2,400,000  of the
December 1996 Notes from November 1998 to January 1999.

                                       12

<PAGE>



         In April 1998, the Company  entered into an agreement with an investor,
pursuant to which the investor has agreed to acquire up to  $2,000,000 of Common
Stock or other securities ("$2,000,000  Commitment") at a discount to the market
price of such  securities.  The Company can require the  investor to acquire the
securities  on  thirty  days'  written   notice  until  December  31,  1998.  In
consideration  thereof,  the Company  issued the  investor  warrants to purchase
100,000  shares of Common  Stock at an  exercise  price of $7.50 per share.  The
warrants are immediately exercisable and will remain exercisable until April 13,
2001. In connection with introducing  this investor to the Company,  the Company
granted to each of Messrs.  Barry  Rubenstein,  a principal  stockholder  of the
Company,  and Eli Oxenhorn  options to purchase 50,000 shares of Common Stock at
an  exercise  price of $7.125 per  share.  The  options  become  exercisable  in
September 1998 and will remain exercisable until April 2003.

         The Company incurred significant net losses and negative cash flow from
operations during 1996 and 1997. Due in part to the NATW and CCI mergers,  and a
continuation of negative cash flow from  operations  through March 31, 1998, the
Company's cash balance has declined to  approximately  $500,000 at May 13, 1998.
Further,  management's  current  projections  indicate  that  the  Company  will
continue to generate  operating  losses and negative  cash flow from  operations
through the  remainder  of 1998,  making it  necessary  for the Company to raise
capital  during 1998 in order to satisfy its  obligations as they become due. To
that  end,  the  Company  completed  the April  1998  Private  Placement,  which
generated  net  proceeds  of  approximately  $1,100,000  and  has  obtained  the
$2,000,000  Commitment.  In  addition,  the Company has  obtained  deferrals  of
certain promissory notes payable aggregating  $3,650,000 from the fourth quarter
of 1998 to the first  quarter of 1999.  The Company  believes  that the proceeds
from the April 1998 Private  Placement and the $2,000,000  Commitment,  together
with the deferrals of certain  promissory note payable,  will enable the Company
to meet its  obligations  through  the end of 1998.  However,  the  Company  has
significant loan payments due in the first quarter of 1999, which it will not be
able  to  satisfy  unless  it  obtains  additional  financing  or  loan  payment
deferrals.  The Company does not have any other arrangements with respect to, or
sources of,  additional  financing and there can be no assurance that additional
financing will be available to the Company on commercially  reasonable terms, or
at all.  The  failure to obtain  such  financing  could have a material  adverse
effect on the Company.

         At March 31, 1998,  the Company had net  operating  loss  carryforwards
("NOLs")  aggregating  approximately  $23,000,000  available  to  offset  future
taxable  income.  Under  Section 382 of the Internal  Revenue  Code of 1986,  as
amended (the  "Code"),  utilization  of prior NOLs is limited after an ownership
change, as defined in this section,  to an amount equal to the value of the loss
corporation's  outstanding  stock  immediately  before the date of the ownership
change, multiplied by the federal long-term tax-exempt rate in effect during the
month that the ownership change occurred.  The Company is subject to limitations
on the use of its NOLs as provided pursuant to Section 382.  Accordingly,  there
can be no assurance that a significant  amount of existing NOLs will be utilized
by the Company.



                                       13

<PAGE>



PART II. OTHER INFORMATION

Item 2.  Changes in Securities

(c)      Recent Sales of Unregistered Securities

         During the three  months  ended March 31,  1998,  the Company  made the
following sales of unregistered securities:

<TABLE>
<CAPTION>



                                                                 Consideration
                                                                 Received and
                                                                Description of
                                                                Underwriting or                         If Option, Warrant
                                                              Other Discounts to                          or Convertible
                                                                 Market Price         Exemption from    Security, Terms of
                          Title of                                Afforded to          Registration        Exercise or
Date of Sale              Security           Number Sold          Purchasers             Claimed            Conversion
---------------         ------------         -----------    ----------------------    --------------   ---------------------    
<S>                    <C>                     <C>          <C>                           <C>          <C>         
1/21/98                 Options to              7,500       options granted - no           4(2)         2,500 shares
                        purchase                            consideration received                      exercisable on
                        Common Stock                        by Company until                            each of 1/21/98,
                        granted to                          exercise                                    1/21/99 and
                        employee                                                                        1/21/00 for five
                                                                                                        years from date of
                                                                                                        vesting at an
                                                                                                        exercise price of
                                                                                                        $6.125 per share

1/30/98                 Options to             60,000       options granted -              4(2)         exercisable from
                        purchase                            consulting services;                        1/30/98 to 1/30/03
                        60,000 shares                       no other consideration                      at an exercise price
                        of Common                           received by Company                         of $6.125 per share
                        Stock granted                       until exercise
                        to consultant

2/6/98                  Common Stock           505,618      shares issued as part          4(2)         N/A
                                                            of merger
                                                            consideration, which
                                                            also included $2
                                                            million in cash and $1
                                                            million of promissory
                                                            notes

2/6/98                  Common Stock           401,284      shares issued as part          4(2)         N/A
                                                            of merger
                                                            consideration, which
                                                            also included $1.5
                                                            million in cash and $1
                                                            million of promissory
                                                            notes

3/31/98                 options to             16,670       options granted - no           4(2)         exercisable for ten
                        purchase                            consideration received                      years from date of
                        Common Stock                        by Company until                            grant at an
                        granted to                          exercise                                    exercise price of
                        directors                                                                       $7.3125 per share

</TABLE>


                                       14

<PAGE>



Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         27       Financial Data Schedule (3/31/98)

(b)      Current Reports on Form 8-K

         Current  Report on Form 8-K,  dated  February  6, 1998,  filed with the
         Commission on February 23, 1998,  and amendment  thereto on Form 8-K/A,
         filed  with  the  Commission  on  April  24,  1998,   relating  to  the
         acquisition of Networks Around the World, Inc.

         Current  Report on Form 8-K,  dated  February  6, 1998,  filed with the
         Commission on February 23, 1998,  and amendment  thereto on Form 8-K/A,
         filed  with  the  Commission  on  April  24,  1998,   relating  to  the
         acquisition of Centerpiece Communications, Inc.


                                       15

<PAGE>



                                   SIGNATURES


         In accordance  with  requirements  of the Exchange Act, the  Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.





Dated:   May 14, 1998


                             GLOBAL TELECOMMUNICATION SOLUTIONS, INC.



                             BY:     /s/ Michael Hoppman
                                --------------------------------------
                                    Michael Hoppman, Vice President
                                     and Chief Financial Officer


                                       16

<PAGE>


                                 EXHIBIT INDEX



Exhibit Number       Description                                         Page
---------------      -------------------------                           ----

27                   Financial Data Schedule                              18








                                       17

<PAGE>