SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(Mark One)

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

         For the quarterly period ended              September 30, 1997
                                             --------------------------------

   (  ) 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)

      --------------------------------------------------------------------
              (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 November 13, 1997,
there were 5,074,850 shares of common stock outstanding.

                               Page 1 of 16 Pages

                            Exhibit Index -- Page 15


               

<PAGE>



            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES



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

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets - September 30,1997 
         (unaudited) and December 31, 1996 ............................. 3

         Consolidated Statements of Operations - Three and 
         nine months ended September 30, 1997 and 1996 (unaudited)...... 4

         Consolidated Statements of Cash Flows - Nine months 
         ended September 30, 1997 and 1996 (unaudited).................. 5

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

Item 2.  Management's Discussion and Analysis of Financial 
         Condition and Results of Operations ........................... 10

Part II. Other Information

Item 2.  Changes in Securities ......................................... 13

Item 6.  Exhibits and Reports on Form 8-K .............................. 13

         Signatures .................................................... 14



                                        2

<PAGE>

                    GLOBAL TELECOMMUNICATION SOLUTIONS, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                             September 30,  December 31,
                                                                                 1997          1996
                                                                             -------------  ----------- 
                                                                              (Unaudited)       
<S>                                                                         <C>             <C>
                                                            ASSETS
CURRENT ASSETS:
    Cash ................................................................   $  9,891,333    $  1,352,322
    Accounts receivable, net of reserve for doubtful accounts of $481,902      3,414,130       2,450,119
        and $399,000
    Inventories .........................................................        358,120         202,129
    Deferred costs ......................................................        807,803       1,127,887
    Prepaid expenses ....................................................        277,490         260,272
                                                                            ------------    ------------
         Total current assets ...........................................     14,748,876       5,392,729

GOODWILL, NET ...........................................................     17,060,596      18,008,599
FIXED ASSETS, NET .......................................................      2,118,535       1,948,917
INTANGIBLE AND OTHER ASSETS, NET ........................................        688,638         469,120
                                                                            ------------    ------------
                                                                            $ 34,616,645    $ 25,819,365
                                                                            ============    ============
                                LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable ....................................................   $  2,811,221    $  3,238,666
    Accrued expenses ....................................................        893,626         542,965
    Deferred revenues ...................................................      2,919,557       4,431,309
    Estimated sales and excise tax liability ............................      2,638,528       1,684,478
    Amounts payable to affiliate ........................................           --         1,073,921
    Capital lease obligation, current ...................................        115,446          51,775
                                                                            ------------    ------------
          Total current liabilities .....................................      9,378,378      11,023,114

CONVERTIBLE NOTES PAYABLE ...............................................      2,612,250       2,800,000
NOTES PAYABLE, NET ......................................................      2,144,226       1,565,960
CAPITAL LEASE OBLIGATION, LONG-TERM .....................................           --            42,002
                                                                            ------------    ------------
           Total liabilities ............................................     14,134,854      15,431,076
                                                                            
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
    Preferred stock -- $.01 par value, authorized 1,000,000 shares;
      none issued .......................................................           --              --
    Common Stock, $.01 par value, authorized 35,000,000 shares;
      issued 5,074,850 and 1,837,601 shares .............................         50,749          18,376
    Additional paid in capital ..........................................     39,382,333      22,990,766
    Accumulated deficit .................................................    (18,712,103)    (12,406,504)
    Deferred compensation ...............................................       (120,441)       (102,498)
    Cumulative foreign currency translation adjustment ..................        (18,747)        (11,851)
    Common stock note receivable ........................................       (100,000)       (100,000)
                                                                            ------------    ------------
         Total stockholders' equity .....................................     20,481,791      10,388,289
                                                                            ------------    ------------
                                                                             $34,616,645     $25,819,365
                                                                            ============     ===========
</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               Nine Months Ended
                                                                        September 30,                    September 30,
                                                                 --------------------------     ----------------------------
                                                                    1997            1996            1997            1996
                                                                ------------    ------------    ------------    ------------
<S>                                                             <C>             <C>             <C>             <C>         
NET SALES ...................................................   $  5,412,586    $  3,816,531    $ 14,017,001    $  8,412,887
COST OF SALES ...............................................      4,701,152       2,586,076      11,480,760       5,973,124
                                                                ------------    ------------    ------------    ------------
GROSS PROFIT ................................................        711,434       1,230,455       2,536,241       2,439,763
                                                                ------------    ------------    ------------    ------------
SELLING AND MARKETING .......................................        762,663         724,185       2,174,270       2,016,561
GENERAL AND ADMINISTRATIVE ..................................      1,391,582       1,452,955       4,439,639       3,753,514
DEPRECIATION AND ............................................            428                             1,3            ,304
                                                                ------------    ------------    ------------
  AMORTIZATION ..............................................        493,741            408,          67,717             965
                                                                ------------    ------------    ------------    ------------
NET LOSS FROM OPERATIONS ....................................     (1,936,552)     (1,355,113)     (5,445,385)     (4,295,616)
                                                                ------------    ------------    ------------    ------------
INTEREST INCOME .............................................       (123,983)        (18,817)       (138,503)        (59,971)
INTEREST EXPENSE ............................................        346,214         100,639         998,717         188,147
                                                                ------------    ------------    ------------    ------------
NET LOSS BEFORE INCOME TAXES ................................     (2,158,783)     (1,436,935)     (6,305,599)     (4,423,792)
INCOME TAXES ................................................           --              --              --              --
                                                                ------------    ------------    ------------    ------------
NET LOSS ....................................................   $ (2,158,783)   $ (1,436,935)   $ (6,305,599)   $ (4,423,792)
                                                                ============    ============    ============    ============
NET LOSS PER SHARE ..........................................   $      (0.47)   $      (0.78)   $      (2.20)   $      (2.74)
                                                                ============    ============    ============    ============
WEIGHTED AVERAGE SHARES .....................................      4,604,832       1,837,600       2,860,616       1,614,734
  OUTSTANDING                                                   ============    ============    ============    ============
</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>
                                                                                              Nine months ended
                                                                                                 September 30,
                                                                                    -----------------------------------
         OPERATING ACTIVITIES:                                                            1997                1996
                                                                                    ----------------    ---------------
<S>                                                                                     <C>             <C>          
           Net loss .................................................................   $ (6,305,599)   $ (4,423,792)
           Adjustment to reconcile net loss to net cash used in operating activities:
               Depreciation and amortization ........................................      1,246,559         965,304
               Amortization of deferred financing costs .............................        124,311          11,891
               Deferred compensation ................................................        133,705         362,667
               Amortization of unearned discount ....................................        578,266            --
               Issuance of stock in lieu of compensation ............................         50,000            --
               Loss on disposal of fixed assets .....................................         73,902            --
           Changes  in  operating  assets  and  liabilities,  net of  effect  of
             acquisitions:
               Accounts receivable ..................................................       (964,011)        342,913
               Inventories ..........................................................       (155,991)         65,268
               Deferred costs .......................................................        320,084         172,338
               Prepaids .............................................................        (17,218)        180,980
               Other assets .........................................................       (277,469)        (53,170)
               Accounts payable .....................................................       (427,445)       (411,026)
               Accrued expenses .....................................................        350,681        (180,174)
               Deferred revenues ....................................................     (1,511,752)        520,333
               Sales and excise taxes payable .......................................        954,050         413,578
                                                                                        ------------    ------------
                  Net cash used by operating activities .............................     (5,827,947)     (2,032,890)
                                                                                        ------------    ------------

         INVESTING ACTIVITIES:
               Purchases of fixed assets ............................................       (477,659)       (252,919)
               Cash acquired in excess of cash payments for acquisition .............           --            54,190
                                                                                        ------------    ------------
                  Net cash used in investing activities .............................       (477,659)       (198,729)
                                                                                        ------------    ------------

         FINANCING ACTIVITIES:
               Proceeds from issuance of common stock ...............................     13,526,586       2,651,274
               Payment of notes payable to affiliate ................................     (1,073,921)       (650,000)
               Increase in notes receivable from Global Link prior to merger ........           --          (250,655)
               Proceeds from exercise of options ....................................          8,228            --
               Payments on capital lease obligations ................................        (39,336)        (43,490)
               Proceeds from exercise of warrants ...................................      2,500,000            --
               Increase on deferred financing fees ..................................        (70,044)           --
                                                                                        ------------    ------------
                  Net cash provided by financing activities .........................     14,851,513       1,707,129
                                                                                        ------------    ------------

         EFFECTS OF EXCHANGE RATE CHANGES ON CASH ...................................         (6,896)         (7,953)
                                                                                        ------------    ------------
                  Net increase in cash ..............................................      8,539,011        (532,443)
         CASH, BEGINNING OF PERIOD ..................................................      1,352,322         928,516
                                                                                        ------------    ------------
         CASH, END OF PERIOD ........................................................   $  9,891,333    $    396,073
                                                                                        ============    ============

         SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
              Cash paid for interest ................................................   $    105,165    $     24,225
                                                                                        ============    ============
               Issuance of common stock in connection with acquisition ..............   $       --      $ 11,039,488
                                                                                        ============    ============
               Deferred compensation relating to options and warrants ...............   $    151,648    $    400,000
                                                                                        ============    ============
               Conversion of convertible notes payable into common stock ............   $    187,750    $    148,850
                                                                                        ============    ============
               Capital leases .......................................................   $     61,005    $       --
                                                                                        ============    ============
</TABLE>



         The accompanying notes are an integral part of these statements


                                        5

<PAGE>



            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               September 30, 1997

(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.

                  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 nine months ended  September
         30, 1997 are not  necessarily  indicative  of the  results  that may be
         expected for the year ending December 31, 1997.

(2)      Loss Per Share

         Weighted  average  shares of common  stock  for the nine  months  ended
         September 30, 1997 and 1996 does not include  common stock  equivalents
         as their effect would be anti-dilutive.

(3)      Reclassifications

         Certain  reclassifications  have  been  made to the  1996  consolidated
         financial statements to conform to the 1997 presentation.

(4)      Acquisition

         On February 29, 1996, pursuant to an Agreement and Plan of Merger dated
         January 18,  1996,  the  Company,  through a  wholly-owned  subsidiary,
         acquired  all the issued and  outstanding  common  stock of Global Link
         Teleco  Corporation  ("Global Link"). The acquisition was accounted for
         as a purchase.  Accordingly,  the acquired assets and liabilities  were
         recorded at their  estimated fair values at the date of acquisition and
         the operating  results of Global Link were included in the accompanying
         consolidated statement of operations from the acquisition date.

         In connection  with the merger,  the Company  issued  572,773 shares of
         common stock in exchange for all of the issued and  outstanding  common
         stock of Global Link. In addition,  the Company issued 17,602 shares of
         common stock to Peoples Telephone Company, Inc. ("Peoples"), a creditor
         of Global Link and a principal  stockholder  of the Company.  The total
         cost of the acquisition was approximately  $11,400,000 including direct
         transaction costs of approximately $344,000.


                                        6

<PAGE>



     The acquisition resulted in goodwill of $19,069,000, based on an allocation
of purchase price, calculated as follows:
 
   Fair market value of common stock issued                      $11,040,000
    Fair value of liabilities assumed                              10,811,000
    Fair value of assets acquired                                  (3,126,000)
    Acquisition related costs                                         344,000
                                                                  -----------
             Goodwill                                             $19,069,000

     The following unaudited combined pro forma information reflects the results
of operations  assuming the  acquisition of Global Link had been made on January
1, 1996.

                                Nine Months Ended
                               September 30, 1996
                               ------------------
   Net sales                       $9,776,000
   Net loss                        (5,243,000)
   Net loss per share                $(1.00)


     Pro forma adjustments  include recording  amortization  expense of goodwill
and the  elimination  of  interest  expense  on debt of  Global  Link  repaid in
connection with the acquisition.

     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 respective  period, or of results which may occur in the
future.

(5)      Reverse Stock Split

         In February  1997,  the Board of Directors  of the Company  approved an
         amendment to its Amended and Restated  Certificate of  Incorporation to
         effect a one-for-three reverse stock split, which was effected on March
         24, 1997.  All per share data and  references  to number of shares have
         been  retroactively  restated  in these  financial  statements  to give
         effect to the reverse stock split.

(6)      Proceeds from Offering

         The Company's Certificate of Incorporation authorizes 35,000,000 shares
         of  common  stock,  of  which  5,074,850  and  1,837,601   shares  were
         outstanding at September 30, 1997 and December 31, 1996,  respectively.
         In July 1997, the Company sold in a public offering 2,875,000 shares of
         its common stock which  generated net proceeds of  approximately  $13.5
         million.  The proceeds are to be used (i) to expand sales and marketing
         activities,   (ii)  to  expand  the  Company's   network  of  switching
         platforms, (iii) to repay $955,000 of debt owed to Peoples and (iv) for
         working capital and general corporate purposes.

(7)      New Accounting Pronouncements

         In February  1997,  the  Financial  Accounting  Standards  Board (FASB)
         issued Statement of Financial Accounting Standard No. 128, Earnings per
         Share (SFAS 128). This Statement introduces new methods for calculating
         earnings  per share.  The  adoption of this  Statement  will not affect
         results from operations,  financial condition,  or long-term liquidity,
         but will require the Company to restate  earnings per share reported in
         prior periods.  Compliance with this Statement, which will be effective
         for periods  ending after  December 15, 1997, is not expected to have a
         material effect on the Company's earnings per share amounts.

         In June 1997, the FASB issued SFAS 130, Reporting Comprehensive Income.
         This  Statement  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 plans to
         adopt this Statement on January 1, 1998, as required.  The Company does
         not have any items of comprehensive income, other than that  presented 
         on its consolidated statements of income that would require disclosure
         and  presentation  of accumulated balances in the equity section for 
         the balance sheet.
         
                                        7

<PAGE>

         In June 1997, the FASB issued SFAS 131,  Disclosures  About Segments of
         and Related  Information.  This  Statement  established  standards  for
         reporting  information  about  operating  segments in annual  financial
         statements and requires selected  information about operating  segments
         in  interim   financial   reports  issued  to  shareholders.   It  also
         establishes   standards  for  related  disclosure  about  products  and
         services,  geographic areas and major  customers.  The Company plans to
         adopt this  statement on January 1, 1998, as required.  The adoption of
         this  Statement  will not affect  results  from  operations,  financial
         conditions or long-term liquidity.

(8)      Tax Obligations and Compliance

         At September  30, 1997,  the Company has not remitted  certain  amounts
         previously  collected for sales, use and excise taxes to various taxing
         jurisdictions.  Further,  the Company has not filed  certain  sales and
         use, excise,  income or franchise tax returns in certain  jurisdictions
         in which it does  business.  Management  is in the process of reviewing
         the Company's tax  collection,  remittance and compliance  policies and
         procedures and has recorded a reserve for estimated tax obligations and
         related  compliance  issues.  Depending on the ultimate  resolution  of
         these  matters,  it is  reasonably  possible  that the  amount  of this
         reserve  could  require  adjustment  in the near term and the amount of
         such adjustment could be material.

         Congress  has  amended  the  statutory  provisions  relating to federal
         excise taxes on communications  services acquired by means of a prepaid
         phone  card.  Section  4251(a) of the  Internal  Revenue  Code has been
         amended to require  that the 3% federal  excise tax  becomes due when a
         prepaid  phone  card  is  sold  to  a  non-telecommunications  carrier.
         Additionally,  Section  4251(a) of the  Internal  Revenue Code has been
         amended  to  require  that the  federal  excise  tax on  communications
         acquired by means of a prepaid  phone card is the product of (i) 3% and
         (ii) the "face value" of the prepaid phone card.  The effective date of
         the amendment is November 1, 1997. The Internal Revenue Service and the
         Treasury  Department have indicated that they will be issuing  guidance
         to assist  in the  interpretation  and  application  of the  amendment.
         However, no guidance has yet been issued.

(9)      Liquidity

         The Company has  substantial  capital  requirements  resulting from the
         funding of losses  from  operations  and the need to finance  continued
         growth.  The Company  believes that its cash  balances,  along with the
         proceeds of $2,500,000 from the exercise of warrants in April 1997, and
         the net proceeds of $13,468,863  from the Company's  public offering in
         July 1997 (see note 6), will satisfy the  Company's  cash  requirements
         until the end of 1998;  however,  there can be no  assurance  that this
         will be the case. In the event that the  Company's  plans change or its
         assumptions  change  or prove to be  inaccurate  (due to  unanticipated
         expenses, delays, difficulties or otherwise), or if cash flow proves to
         be insufficient to fund the Company's  operations  after such period of
         time,  the Company will be required to seek  additional  financing  and
         curtail  its  expansion  activities.  The  Company  does  not  have any
         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)     Dial Around Compensation

         On October 9, 1997, the Federal  Communications  Commission (the "FCC")
         adopted a per-call compensation rate for subscriber 800 and access code
         calls  originated  from pay  telephones  in light of the United  States
         Court of Appeals' decision in Illinois Telecommunication  Ass'n v. FCC,
         which vacated and remanded portions of the FCC's prior orders relating
         to dial around compensation for pay telephone service providers (In the
         Matter  of  The  Pay  Telephone   Reclassification   and   Compensation
         Provisions of the  Telecommunications Act of 1996, CC Docket No. 96-128
         (the "Payphone Order")).  The FCC established a rate of $0.284 per call
         as the default  compensation  rate for  subscriber  800 and access code
         calls for the first two years of compensation.  Interexchange  carriers
         ("IXCs")  must  pay  this  percall  amount  to  pay  telephone  service
         providers  ("PSPs") for access code and subscriber 800 calls originated
         from pay  telephones  beginning  October 7,  1997.  After the first two
         years of  per-call  compensation,  the  market-based  local  coin  rate
         adjusted  for  certain  costs  will be the  surrogate  for the  default
         per-call  rate  for  subscriber  800 and  access  code  calls.  The FCC
         indicated that it would address the compensation obligations applicable
         during the period  from  November  1996  through  October 6, 1997  in a

                                        8

<PAGE>



         subsequent  order  in  this  proceeding. However, the  FCC tentatively 
         concluded  that PSPs are entitled  to compensation  for all access code
         and subscriber 800 calls during this period.

         Commencing  in  February  of  1997,  Sprint  Communications  Co.  Ltd.
         ("Sprint")  has   charged   the   Company  a  total  of  $441,363  in
         connection with  dial  around  compensation for  the  period  prior  to
         October  7,  1997.  The  Company  has  provided  Sprint  with   written
         notice  indicating  it  disputed  these  charges and  the  Company  has
         not paid any of these charges.

         In addition to the adoption of the $0.284 per call  compensation  rate,
         the  Payphone  Order  stated  that  PSPs and local  exchange  companies
         ("LECs")  cannot receive dial around  compensation  unless the LECs and
         PSPs  provide  the  IXCs  with  coding  digits   identifying  that  the
         subscriber 800 or access code call originated from a pay telephone.  By
         separate  order dated  October 7, 1997 (the  "Waiver  Order"),  the FCC
         granted a limited  waiver  until  March 1, 1998 to those  PSPs and LECs
         that cannot provide pay telephone specific digits.  This limited waiver
         permits those  LECs  and PSPs that cannot provide the coding digits to 
         receive the dial around compensation.

         The  International  Telecard  Association  (the  "ITA")  has  filed  a
         Petition  for Partial  Consideration  with  the  FCC to reconsider its
         Waiver Order  as  applied  to prepaid  phone card  providers.  The ITA
         argued  that  the  Waiver  order  discriminates  against prepaid phone
         card  providers  because  a  prepaid  phone  card provider cannot pass
         the per-call  compensation on to  end  users  unless  it  receives the
         coding  digits  in  real-time.  Accordingly,  the  ITA  has  requested
         that the FCC  reconsider  the  waiver  as  it  applies  to  subscriber
         800  and  access  code  calls  utilized  in  connection  with  prepaid
         phone cards.

         The Company's  customers utilize its phone cards primarily by dialing a
         subscriber  800  telephone  number to access  the  Company's switching
         platforms. Pursuant to the FCC's order, the Company is obligated to pay
         each payphone  service  provider  $0.284 for each  subscriber 800 call
         originating from a pay telephone.



                                        9

<PAGE>



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

Results of Operations

     The following table sets forth, for the periods  indicated,  items from the
Company's  Consolidated  Statements of  Operations  expressed as a percentage of
sales:
<TABLE>
<CAPTION>
                                                                                      Percentage of Sales
                                                                  -------------------------------------------------------------
                                                                        Three Months Ended             Nine Months Ended
                                                                          September 30,                  September 30,
                                                                  ------------------------------ ------------------------------
                                                                            1997            1996            1997           1996
                                                                            ----            ----            ----           ----
<S>                                                                          <C>             <C>             <C>            <C>
Net sales.......................................................             100             100             100            100
Cost of sales...................................................              87              68              82             71
                                                                          ------          ------          ------         ------
         Gross profit...........................................              13              32              18             29
                                                                          ------          ------          ------         ------
Selling and marketing expenses..................................              14              19              15             24
General and administrative expenses.............................              26              38              32             45
Depreciation and amortization...................................               9              11              10             11
                                                                         -------          ------          ------         ------
         Net loss from operations ..............................            (36)            (36)            (39)           (51)
                                                                          ------          ------          ------         ------
Interest income.................................................             (2)             (--)             (1)          (--)
Interest expense................................................               6               2               7             2
                                                                         -------         -------         -------        -------
         Net loss before income taxes...........................            (40)            (38)            (45)           (53)
Income taxes ...................................................              --             --              --             --
        Net loss................................................            (40)            (38)            (45)           (53)
                                                                          ======          ======          ======         ======
</TABLE>


Three Months Ended  September 30, 1997 Compared to Three Months Ended  September
30, 1996

                  Net sales for 1997 were $5,412,586  compared to $3,816,531 for
1996.  The primary  reason for the  increase  in  revenues  was  the  Company's
aggressive  pursuit  of  retail  programs  which  offered  reduced  per-minute
charges to the consumer and the de-emphasis of promotional phone card programs.

                  The Company's gross margins  decreased to 13% of net sales for
1997,  from 32% of net sales for the  comparable  period in the prior year.  The
decrease in the gross  margin was  primarily a result of 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.

                  Selling and marketing  expenses remained  relatively  constant
rising slightly from $724,185 (19% of net sales) for 1996,  compared to $762,663
(14% of net sales)  for 1997.  The  decrease  as a  percentage  of net sales was
primarily due to the Company's strategy of utilizing  distributors to market the
Company's  phone cards to retail  establishments  without  increasing  its sales
force.

                  General  and  administrative   expenses  remained   relatively
constant  decreasing  slightly to $1,391,582  (26% of net sales) for 1997,  from
$1,452,955 (38% of net sales) for 1996.

                  Depreciation  and amortization  expense  increased to $493,741
for 1997 from $408,428 for 1996,  primarily due to the acquisition of additional
equipment.

                  Investment and interest income was $123,983 for 1997, compared
to $18,817 for 1996.  The increase was primarily  due to interest  earned on the
net proceeds from the July 1997 offering.

                  Interest  expense for 1997 increased to $346,214 from $100,639
for 1996, primarily as a result of the amortization of the unearned discount and
deferred  financing costs relating to the issuance of notes payable  pursuant to
the private placement consummated by the Company in December 1996.

                                       10

<PAGE>



                  For the foregoing reasons,  the Company incurred a net loss of
$2,158,783 for 1997, compared to a net loss of $1,436,935 for 1996.

Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996

                  A  portion  of the  increases  in  revenues  and  general  and
administrative  expenses  are  attributable  to  the  Company's  acquisition  on
February 29, 1996 of all of the outstanding capital stock of Global Link. Global
Link's  operating  results were  consolidated  with the Company's  commencing on
March 1, 1996. Accordingly,  while Global Link's operating results were included
for all nine  months of the period  ended  September  30,  1997,  Global  Link's
operating  results  only were  included  for seven  months of the  period  ended
September 30, 1996.

                  Net sales for 1997 were $14,017,001 compared to $8,412,887 for
1996.  The primary  reason for the  increase  in revenues  was the result of the
acquisition  of Global Link and an  aggressive  strategy to market the Company's
phone cards to retail establishments.

                  The Company's gross margins  decreased to 18% of net sales for
1997,  compared to 29% of net sales for the comparable period in the prior year.
The  decrease in the gross  margin was  primarily a result of an increase in the
sale of cards  from  retail  establishments  with  reduced  per-minute  rates to
consumers  and a reduction in revenue  recognized  from  promotional  phone card
programs.

                  Selling and marketing  expenses remained  relatively  constant
rising  slightly from  $2,016,561 (24% of net sales) for 1996 to $2,174,270 (15%
of net sales) in 1997.  The decrease as a percentage  of net sales was primarily
due to the Company's strategy of utilizing  distributors to market the Company's
phone cards to retail establishments without increasing its sales force.

                  General and  administrative  expense increased from $3,753,514
(45%  of net  sales)  in  1996  to  $4,439,639  (32%  of  net  sales)  in  1997.
Approximately  $564,000 of this increase is  attributable  to the additional two
months of expenses  related to the  acquisition  of Global Link.  The  remaining
portion relates to increased expenditures in telephone and computer expenses.

                  Depreciation and amortization  expense increased to $1,367,917
for 1997 from $965,304 for 1996,  primarily due to the  amortization of goodwill
resulting  from  the  Global  Link  Merger  and the  acquisition  of  additional
switching equipment.

                  Interest  expense for 1997 increased to $998,717 from $188,147
for  1996,  primarily  as a  result  of  interest  on the  principal  amount  of
convertible   debentures,   amounts  due  to  Peoples  Telephone  Company,  Inc.
("Peoples"),  and  the  amortization  of  the  unearned  discount  and  deferred
financing  costs  relating  to the  issuance  of notes  payable  pursuant to the
private placement consummated by the Company in December 1996.

                  For the foregoing reasons,  the Company incurred a net loss of
$6,305,599 for 1997, compared to a net loss of $4,423,792 for 1996.

Liquidity and Capital Resources

                  At   September   30,  1997  the  Company  had  cash  and  cash
equivalents  of  $9,891,333  and  working  capital of  $5,370,498,  compared  to
$1,352,322 and a deficit of $5,630,385, respectively, at December 31, 1996.

                  Net cash  used in  operating  activities  for the nine  months
ended  September 30, 1997 of  $5,827,947  was primarily due to the Company's net
loss. Net cash used in investing  activities for the nine months ended September
30,  1997  consisted  of  $477,659  of  capital  expenditures.  Those  uses were
primarily  funded from the  $13,500,000 net proceeds from the July 1997 offering
and the proceeds of $2,500,000 from the exercise of warrants in April 1997.

                  In April 1997, the Company filed a  registration  statement on
Form SB-2 with the SEC for a secondary  offering  of  securities.  The  offering
("Public  Offering")  was  consummated  in July 1997 and  yielded  approximately
$13,500,000 of net proceeds to the Company.


                                       11

<PAGE>



                  As previously indicated,  the Company has incurred substantial
cash losses  from  operations  for the nine months  ended  September  30,  1997.
Management's  projections  indicate  that the Company  anticipates  that it will
continue to generate  operating  losses and negative  cash flow at least through
1997. Further, the Company has not remitted certain amounts previously collected
for sales, use and excise taxes to various taxing jurisdictions. The Company has
substantial  capital  requirements  resulting  from the  funding of losses  from
operations and the need to finance continued  growth.  The Company believes that
its cash  balances,  along with the proceeds of $2,500,000  from the exercise of
warrants in April 1997, and the net proceeds of approximately  $13,5000,000 from
its Public Offering,  will satisfy the Company's cash requirements until the end
of 1998;  however,  there can be no assurance that this will be the case. In the
event that the Company's plans change or its  assumptions  change or prove to be
inaccurate (due to unanticipated expenses,  delays,  difficulties or otherwise),
or if cash flow proves to be insufficient to fund the Company's operations after
such period of time, the Company will be required to seek  additional  financing
or curtail its expansion activities.  The Company does not have any 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.

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
"forwardlooking  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 publicly
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.




                                       12

<PAGE>



PART II. OTHER INFORMATION

Item 2.  Changes in Securities

(c)      Recent Sales of Unregistered Securities

                  During the three months ended  September 30, 1997, the Company
made the following sales of unregistered securities:

<TABLE>
<CAPTION>

                                                            Consideration Received
                                                              and Description of                        If Option, Warrant
                                                            Underwriting or Other                         or Convertible
                                                             Discounts to Market     Exemption from     Security, Terms of
                                                              Price Afforded to       Registration         Exercise or
Date of Sale*           Title of Security   Number Sold           Purchasers             Claimed            Conversion
---------------------- ------------------- -------------- ------------------------ ------------------  ---------------------
<S>                     <C>                  <C>            <C>                       <C>              <C>
August 1, 1997          Common Stock          100,000       Option granted in         Section 4(2)     Option to purchase
                        Purchase Option                     connection with hiring                     shares of Common
                                                            of officer                                 Stock at $6.5625 per
                                                                                                       share, vesting 50% in
                                                                                                       January 1998 and
                                                                                                       50% in June 1998
----------------------- ----------------- ----------------  ---------------------- ------------------- --------------------

<FN>

        *  Option grant
</FN>
</TABLE>


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         27       Financial Data Schedule (9/30/97)

(b)      Current Reports on Form 8-K

         None


                                       13

<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:   November __, 1997

                                  GLOBAL TELECOMMUNICATION SOLUTIONS, INC.



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



                                       14

<PAGE>



                                  EXHIBIT INDEX


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

27                        Financial Data Schedule                    



                                       15

<PAGE>