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               June 30, 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, Pnnsylvania 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 August 12, 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 - June 30, 1998 (unaudited) and
         December 31, 1997..................................................3

         Consolidated Statements of Operations - Three and six months
         ended June 30, 1998 and 1997 (unaudited)...........................4

         Consolidated Statements of Cash Flows - Six months 
         ended June 30, 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 and Use of Proceeds................16

         Item 4.  Submission of Matters to a Vote of Security Holders......16

         Item 5.  Other Information........................................17

         Item 6.  Exhibits and Reports on Form 8-K.........................17

         Signatures........................................................18


                                        2

<PAGE>
            GLOBAL TELECOMMUNICATION SOLUTIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                 (Unaudited)
                                                                                   June 30           December 31
                                                                               ----------------    ---------------
                                                                                      1998               1997
                                                                               ----------------    ---------------
                                                      Assets
<S>                                                                             <C>                 <C>
Current assets:
    Cash and cash equivalents                                                   $   1,215,055        $   7,867,566
    Accounts receivable, net of reserve for doubtful accounts of $596,188
        and $570,000                                                                4,569,931            2,636,878
    Inventories                                                                       501,891              174,112
    Deferred costs                                                                         -                32,764
    Other assets                                                                      142,771              160,935
                                                                               ----------------    ---------------
         Total current assets                                                       6,429,648           10,872,255
                                                                               ---------------     ---------------

Goodwill, net                                                                      14,421,708            3,516,344
Property and equipment, net                                                         2,017,760            1,485,348
Other assets, net (Note 4)                                                          1,971,696              378,911
                                                                               ---------------     ---------------
         Total assets                                                           $ 24,840,812          $ 16,252,858
                                                                               ===============     ===============

                                       Liabilities and Stockholders' Equity
Current liabilities:
    Accounts payable                                                            $   3,724,564        $   2,199,134
    Accrued expenses                                                                3,869,844            2,165,986
    Deferred revenues                                                               3,939,440            1,677,615
    Estimated sales and excise tax liability                                        4,326,485            3,663,285
    Convertible notes payable, current                                              1,306,000                   -
    Notes payable, net current                                                      3,972,493              450,000
    Notes payable to related parties, current (Note 4)                              1,500,000                   -
    Capital lease obligation, current                                                  19,395               95,298
                                                                               -----------------   ---------------
          Total current liabilities                                                22,658,221           10,251,318
                                                                               ---------------     ---------------

Notes payable, net                                                                         -             1,886,982
Notes payable to related partiies (Note 4)                                            500,000                  -
Convertible notes payable                                                           1,293,750            2,599,750
                                                                               ---------------     ---------------
          Total liabilities                                                        24,451,971           14,738,050
                                                                               ---------------     ---------------
Commitments and Contingencies (Notes 4, 6 and 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                                                     46,136,736           39,689,698
    Accumulated deficit                                                           (45,660,937)         (37,942,443)
    Deferred compensation                                                            (171,180)            (294,650)
    Cumulative other comprehensive income                                              24,305               11,355
                                                                               ----------------    ----------------
            Total stockholders' equity                                                388,841            1,514,808
                                                                               ----------------    ----------------
            Total liabilities and stockholders' equity                          $  24,840,812       $   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                    Six months ended
                                                                      June 30,                               June 30,
                                                          ------------------------------------   -----------------------------------
                                                                1998                1997                1998              1997
                                                          -----------------  -----------------   -----------------  ----------------
<S>                                                       <C>                   <C>                   <C>               <C>
Net sales                                                  $   8,030,272         $   4,916,659         $13,164,668     $ 8,604,812
Cost of sales                                                  7,544,232             4,100,879          12,738,342       6,956,236
Estimated costs of carrier default (Note 4)                           -                    -               550,000              -
                                                          -----------------  -----------------   -----------------  --------------
          Gross profit (loss)                                    486,040               815,780            (123,674)      1,648,576
                                                          -----------------  -----------------   -----------------  --------------

Selling, general and adminsitrative expenses                   2,911,697             1,923,121           5,392,015       4,283,728
Depreciation and amortization                                    580,673               435,436             950,329         863,688
                                                          -----------------  -----------------   -----------------  --------------

          Operating loss                                      (3,006,330)           (1,542,777)         (6,466,018)     (3,498,840)
                                                          -----------------  -----------------   -----------------  --------------

Interest income                                                    5,536                10,618              60,471          14,519
Interest expense                                                 917,447               339,742           1,312,947         662,495
                                                          -----------------  -----------------   -----------------  --------------

          Loss before income taxes                            (3,918,241)          (1,871,901)          (7,718,494)     (4,146,816)

Income taxes                                                          -                     -                    -              -
                                                          -----------------  -----------------   -----------------  --------------
Net loss                                                   $  (3,918,241)       $  (1,871,901)       $  (7,718,494)    $(4,146,816)
                                                          =================  =================   =================  ==============

Basic and diluted loss per share                           $       (0.65)       $       (0.90)       $      (1.33)    $     (2.10)
                                                          =================  =================   =================  ==============

Weighted average shares outstanding - basic and                5,991,772            2,090,036           5,806,383       1,974,053
diluted                                                   =================  =================   =================  ==============

</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>
                                                                                                      Six months ended
                                                                                                           June 30,
                                                                                          ---------------------------------------
                                                                                                    1998                1997
                                                                                          ------------------    -----------------
<S>                                                                                            <C>                <C>   
Operating activities:
Net loss                                                                                         (7,718,494)       $  (4,146,816)
Adjustment to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                                    950,329              863,688
    Provision for bad debts                                                                          208,261                    -
    Amortization of deferred compensation                                                            322,070              103,747
    Amortization of unearned discount                                                                385,511              385,511
    Amortization of deferred financing charges                                                       578,264               47,311
    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                                                                           (2,141,314)            (253,428)
    Inventories                                                                                     (327,779)            (174,327)
    Deferred costs                                                                                    32,764              170,834
    Other assets                                                                                     150,542             (586,491)
    Accounts payable                                                                               1,525,430            1,006,762
    Accrued expenses                                                                               1,537,381              908,469
    Deferred revenues                                                                              2,261,825           (1,000,508)
    Sales and excise taxes payable                                                                   663,200              397,691
                                                                                          ------------------    -----------------
            Net cash used by operating activities                                                 (1,572,010)          (2,207,645)
                                                                                          ------------------    -----------------

Investing activities:
    Purchases of property and equipment                                                             (982,314)            (532,974)
    Acquisitions and related costs                                                                (5,170,234)                  -
                                                                                          ------------------    -----------------
            Net cash used in investing activities                                                 (6,152,548)            (532,974)
                                                                                          ------------------    -----------------

Financing Activities:
    Proceeds from bridge loan                                                                      1,250,000                    -
    Proceeds from exercise of options                                                                      -                4,374
    Payments to affiliates                                                                                 -             (119,293)
    Payments on capital lease obligations                                                            (75,903)             (24,751)
    Proceeds from the exercise of warrants                                                                              2,500,000
    Increase in deferred finance fees                                                               (115,000)             (40,501)
                                                                                          ------------------    -----------------
            Net cash provided by financing activities                                              1,059,097            2,319,829

            Effects of exchange rates on cash                                                         12,950               (4,463)
                                                                                          ------------------    -----------------
               Net decrease in cash                                                               (6,652,511)            (425,253)
Cash and cash equivalents, beginning of period                                                     7,867,566            1,352,322
                                                                                          ------------------    -----------------
Cash and cash equivalents, end of period                                                       $   1,215,055        $     927,069
                                                                                          ==================    =================

Supplemental disclosures:
    Cash paid for interest                                                                 $          79,049       $       99,931
                                                                                          ==================    =================
    Deferred finance fess relating to options and warrants                                     $   1,450,927     $              -
                                                                                          ==================    =================
    Deferred compensation relating to options and warrants                                     $     198,600        $     151,648
                                                                                          ==================    =================
    Conversion of convertible notes payable into common stock                               $              -        $     175,250
                                                                                          ==================    =================
    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
June 30, 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 and six months  ended
         June 30, 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 and six months
         ended June 30, 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.

                                        6

<PAGE>




         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
         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.

          Each of the mergers was 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 February
          1,1998.  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                                 750,000       750,000      1,500,000

Notes payable to related parties,
long term                               250,000       250,000        500,000

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

Balance sheet adjustment                 45,949        91,852        137,801

Estimated carrier obligation in
connection with mergers, net            287,500       700,000        987,500

Estimated accrued acquisition
costs                                    50,000        50,000        100,000
                                         ------        ------        -------
Total consideration                   5,010,254     6,521,627     11,531,881

Fair value of identifiable assets
acquired                                 70,949       116,852        187,801

Goodwill                             $4,939,305    $6,404,775    $11,344,080
                                      =========     =========     ==========


          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

                                        7

<PAGE>



          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   an    underlying    carrier's    failure   to   provide
          telecommunications  services to phone 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  $1,725,000.  For purposes of the  financial  statements
          contained  herein,  $737,500 and $987,500 of the  estimated  costs has
          been   allocated   to  the  former   shareholders   and  the  Company,
          respectively.  The amount due from the former shareholders of $737,500
          has been recorded to other assets and will be offset  against  amounts
          owed to the former  shareholders  of NATW and CCI,  respectively.  The
          amount due from the former  shareholders  is estimated,  is subject to
          final resolution among the parties and,  therefore,  may be subject to
          change.

          In addition to the $1,725,000 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 during the six months ended June 30, 1998.

          Pursuant to the respective merger  agreements,  the purchase price was
          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 following  unaudited  combined pro forma information  reflects the
          results  of  operations  assuming  the CCI and NATW  mergers  had been
          consummated on January 1, 1998.

                                          Six Months Ended
                                            June 30, 1998
                                          ----------------   
                  Net sales               $ 15,479,187
                  Net loss                $ (8,249,513)
                  Net loss per share      $ (     1.38)

          Pro  forma  adjustments  include  recording  amortization  expense  on
          goodwill,   interest   expense   on  the  notes   payable   to  former
          shareholders,  and the elimination of  inter-company  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
          
         

                                        8

<PAGE>


          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 $3,921,750  and  $1,875,591  and $7,705,444 and
          $4,151,297  for the three and six months ended June 30, 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. 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.

(7)       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   and  is  being   amortized  to  general  and
          administrative expenses over the term of the consulting agreement.

(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 1997 and 1996. Due in part to the acquisitions
          of  NATW  and  CCI and a  continuation  of  negative  cash  flow  from
          operations  through  June 30,  1998,  the  Company's  cash balance has
          declined  to  approximately  $630,000  at August  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 11). 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

                                        9

<PAGE>



          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)      Private Placement

          In April 1998, the Company completed the April 1998 Private Placement,
          pursuant to which the Company  derived net  proceeds of  approximately
          $1,100,000 through the sale of $1,250,000 of 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 estimated fair market value of these
          warrants of $658,927,  along with expenses  associated  with the April
          1998  Private  Placement  of  $115,000,   were  recorded  as  deferred
          financing costs and are being  amortized to interest  expense over the
          term of the April 1998 Warrants.  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 a Qualified Private Placement.

(11)      Financing Commitment

          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.  The fair market value of these
          warrants of $792,000 was recorded as deferred  financing fees  and  is
          being amortized to interest expense over the term of the commitment.

(12)      Universal Service Fund

          On May 8, 1997, the Federal  Communications  Commission ("FCC") issued
          an order to implement the provisions of the  Telecommunications Act of
          1996  relating  to  the  preservation  and  advancement  of  universal
          telephone  service (the  "Universal  Service  Order").  The  Universal
          Service  Order  requires  all  telecommunications  carriers  providing
          interstate  telecommunications  services to  contribute  to  universal
          service by  contributing  to a fund (the  "Universal  Service  Fund").
          Universal  Service  Fund  contributions  will be  assessed  based upon
          intrastate,    interstate   and    international    "end-user"   gross
          telecommunications revenue effective January 1, 1998. Although the FCC
          has not finally  determined  the  contribution  assessment  rate,  the
          Company  estimates  the  assessment  could  be as  much  as 4% of such
          revenue for the calendar year 1998,  and could increase or decrease in
          subsequent  years.  While the Company  believes that it has adequately
          provided for its  contribution  to the  Universal  Service Fund, it is
          possible that the FCC may enact  regulation  concerning  the Universal
          Service Fund in a manner which could result in material liabilities in
          excess of amounts accrued.


                                       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 June 30, 1998 Compared to Three Months Ended June 30, 1997

         Net sales for the second quarter of 1998 were  $8,030,272  compared  to
$4,916,659  for the second  quarter of 1997. The primary reason for the increase
in net sales was due to the  acquisitions  of  Networks  Around the World,  Inc.
("NATW") and Centerpiece  Communications,  Inc. ("CCI") in February 1998 and the
addition  of new  accounts  such as Money  Gram  Payment  Systems,  Inc.  and DB
Companies,  Inc. Net sales of promotional cards decreased to less than 1% of net
sales in the second  quarter of 1998 from 19% of net sales in the second quarter
of 1997.  The change in the sales mix  resulted  from the  Company's  aggressive
pursuit of retail  programs that offer  greater  discounts  and  commissions  to
retailers and/or reduced per-minute charges to consumers.

         The Company's gross margins decreased to 6% of net sales for the second
quarter of 1998,  from 17% of net sales for the  comparable  period in the prior
year.  The primary  reason for the  decrease in the gross  margins was 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.  The gross margins were further  decreased
due to certain  regulatory  fees and  surcharges  imposed on the Company in 1998
which,  due to the nature of the Company's  business,  cannot be fully collected
from the end users of the Company's products and services.

         Selling,  general and  administrative  expenses increased to $2,911,697
(36% of net sales) for the second quarter of 1998,  compared to $1,923,121  (39%
of net  sales)  for the  second  quarter  of 1997.  The  primary  reason for the
increase  was due to  increases in sales and  marketing  personnel  salaries and
benefits  that  increased  as a result of higher  sales  volumes.  In  addition,
general and  administrative  costs were further  increased  due to (i) increased
expenditures on professional  fees,  primarily  financial public relations fees,
investment  banking  fees and  other  consulting  services  and  (ii)  increased
operating expenses due to the acquisitions of NATW and CCI.

         Depreciation  and  amortization  expense  increased to $580,673 for the
second  quarter  of 1998 from  $435,436  for the  second  quarter  of 1997.  The
increase was primarily  due to increased  depreciation  costs of newly  acquired
telecommunications and computer equipment.  The increase was partially offset by
a decrease in the amortization expense related to the impairment of goodwill for
the year ended December 31, 1997.


                                       11

<PAGE>



         Interest expense and related financing  expenses for the second quarter
of 1998  increased to $917,447  from  $339,742  for the second  quarter of 1997,
primarily due to the cost of the financing commitment from Wien Securities,  the
interest  expense and  financing  costs  associated  with the April 1998 Private
Placement  and the  interest on the NATW Notes and the CCI Note (both as defined
below).

        For the foregoing reasons, the Company incurred a net loss of $3,918,241
for the second  quarter of 1998,  compared to a net loss of  $1,871,901  for the
second quarter of 1997.

Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997

         Net sales  for the six  months  ended  June 30,  1998 were  $13,164,668
compared  to  $8,604,812   for  the  same  period  during  1997.  A  significant
contributing  factor to the increase in net sales was due to the acquisitions in
February  1998 of NATW and CCI and the  addition of new  accounts  such as Money
Gram Payment Systems, Inc. and DB Companies, Inc. Net sales of promotional cards
decreased to less than 1% of net sales during the six months ended June 30, 1998
from 19% of net sales in the six months ended June 30,  1997.  The change in the
sales mix resulted from the Company's aggressive pursuit of retail programs that
offer greater  discounts and commissions to retailers and/or reduced  per-minute
charges to consumers.

         The Company's  gross margins  decreased to negative 1% of net sales for
the six months  ended June 30,  1998,  from 19% 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 (i) an increase in the sale of cards
with  reduced  per-minute  rates to  consumers;  (ii) a  reduction  in  revenues
recognized from promotional phone card programs that historically sell at higher
margins; and (iii) certain regulatory fees and surcharges imposed on the Company
in 1998  which,  due to the nature of the  Company's  business,  cannot be fully
collected from the end users of the Company's products and services.

         Selling,  general and  administrative  expenses increased to $5,392,015
(41% of net  sales)  for  the six  months  ended  June  30,  1998,  compared  to
$4,283,728 (50% of net sales) for the comparable period during 1997. The primary
reason for the increase was due to  increases in sales and  marketing  personnel
salaries and benefits as a result of higher sales volumes. In addition,  general
and administrative costs were further increased due to (i) increased expenditure
on professional  fees,  primarily  financial public  relations fees,  investment
banking fees and other consulting services and (ii) increased operating expenses
due to the acquisitions of NATW and CCI.

         Depreciation and amortization expense increased to $950,329 for the six
months ended June 30, 1998 from $863,688 for the six months ended June 30, 1997.
The increase was primarily due to increased depreciation costs of newly acquired
telecommunications and computer equipment.  The increase was partially offset by
a decrease in the amortization expense related to the impairment of goodwill for
the year ended December 31, 1997.

         Investment  and  interest  income was $60,471 for the six months  ended
June 30, 1998,  compared to $14,519 for the six months ended June 30, 1997.  The
increase  was  primarily  due to interest  earned on the net  proceeds  from the
Company's  secondary  public  offering on Common Stock which was  consummated in
July 1997.

         Interest  expense and  related  financing  expenses  for the six months
ended June 30, 1998  increased to  $1,312,947  from $662,495 for the same period
during 1997, primarily due to the financing commitment from Wien Securities, the
interest  expense and  financing  costs  associated  with the April 1998 Private
Placement and the interest on the NATW Notes and the CCI Note.

         For  the  foregoing  reasons,  the  Company  incurred  a  net  loss  of
$7,718,494  for the six months  ended June 30,  1998,  compared to a net loss of
$4,146,816 for the six months ended June 30, 1997.


                                       12

<PAGE>



Liquidity and Capital Resources

         At June  30,  1998,  the  Company  had cash  and  cash  equivalents  of
$1,215,055 and a working capital deficit of $16,228,573,  compared to $7,867,566
of cash and cash  equivalents  and  positive  working  capital  of  $620,737  at
December 31, 1997.

         Net cash used in operating activities for the six months ended June 30,
1998 of $1,572,000  was primarily due to the Company's net loss and increases in
accounts  receivable  and  inventory  which  increased  due to the higher  sales
volumes.  The net cash used was partially  offset by non-cash items  aggregating
$2,444,435,  such as depreciation and amortization,  provision for bad debts and
financing  costs;  and was further offset by increases in accounts payable which
increased  due  to  the  Company's  more   favorable   payment  terms  with  its
telecommunications  carriers and  increases in deferred  revenues as a result of
increased  sales  volumes.  Net cash used in  investing  activities  for the six
months  ended June 30, 1998  consisted of $982,314 of capital  expenditures  and
$5,170,234 related to the NATW and CCI acquisitions.

         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 the respective mergers,  ceased providing such services
to the prepaid  phone cards  ("Access  Phone Cards") that it had sold to each of
NATW and CCI,  despite  receiving  payment for  substantially  all of the Access
Phone Cards. Additionally,  each of NATW and CCI acquired additional phone cards
from Access after the respective  mergers.In order to meet consumer obligations,
the  Company  was forced to  purchase  a total of  approximately  $2,025,000  of
telecommunications  services  from  other  carriers  and  incurred  $250,000  of
additional card printing costs through August 13, 1998.  Additional payments may
be required as a result of this situation.  The Company is pursuing  recovery of
all  losses  from  Access.  The  Company  estimates  that the  costs to  provide
telecommunications   services  to  the  Access   Phone   Cards  will   aggregate
approximately  $1,725,000.  $737,000  of this amount has been  allocated  to the
former  shareholders  of NATW  and  CCI in  accordance  with  the  terms  of the
respective merger  agreements,  which amount will be offset against amounts owed
by the Company to such former shareholders as set forth above (see Note 4).  The
amount  due from the  former  shareholders  is  estimated,  is  subject to final
resolution among the parties and, therefore, may be subject to change.

                  In April  1998,  the  Company  completed  a private  placement
("April  1998  Private  Placement"),  pursuant to which the Company  derived net
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

                                       13

<PAGE>


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 estimated fair market
value of these  warrants of $658,927,  along with expenses  associated  with the
April 1998 Private  Placement of $115,000,  were recorded as deferred  financing
costs and are being  amortized  to interest  expense  over the term of the April
1998 Warrants. 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.

         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 fair market
value of these warrants of $792,000 was  recorded as deferred financing fees and
is being amortized to interest expense over the term of the commitment.

         The Company incurred significant net losses and negative cash flow from
operations during 1997 and 1996. Due in part to the acquisitions of NATW and CCI
and a continuation of negative cash flow from operations  through June 30, 1998,
the Company's cash balance has declined to approximately  $630,000 at August 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.

         The  assessment of goodwill recoverability, which  is heavily dependent
on projected  financial  information,  and the goodwill  amortization period are
significant  accounting  estimates as contemplated by the American  Institute of
Certified Public Accountants' Statement of Position 94-6, "Disclosure of Certain
Significant  Risks and  Uncertainties."  Further,  the  Company  operates  in an
industry which is rapidly evolving and extremely  competitive.  It is reasonably
possible that the Company's accounting estimates with respect to the useful life
and ultimate  recoverability  of goodwill could change in the near term and that
the effect of such changes on the financial statements could be material.  While
management  currently  believes  that the  recorded  amount of  goodwill  is not
impaired,  there can be no  assurances  that the Company's  future  results will
confirm  this  assessment  or that a  significant  write-down  or  write-off  of
goodwill will not be required in the future.

                                       14

<PAGE>



         At June 30,  1998,  the Company had net  operating  loss  carryforwards
("NOLs")  aggregating  approximately  $26,000,000  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.

Year 2000 Compliance

         The Company is in the process of  evaluating  the effects of  modifying
its computer software systems to accommodate year 2000 transactions. The Company
has not determined the costs of such  modifications and these costs could have a
material adverse effect on the Company's financial position.



                                       15

<PAGE>



PART II. OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

(c)      Recent Sales of Unregistered Securities

         During the three  months  ended June 30,  1998,  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>              
4/1/98                  Options to             100,000      options granted - no           4(2)         exercisable from
                        purchase                            other consideration                         9/1/98 to 4/1/03 at an
                        Common Stock                        received by Company                         exercise price of
                                                            until exercise                              $7.125 per share

4/6/98                  Convertible          $1,250,000     Notes issued in                4(2)         convertible into
                        Promissory Notes      aggregate     connection with private                     shares of common
                                          principal amount  placement                                   stock at a conversion
                                                                                                        rate of the lesser of
                                                                                                        (I) $7.00 or (ii) the
                                                                                                        offering price of a
                                                                                                        private placement
                                                                                                        which raises an
                                                                                                        aggregate of $4
                                                                                                        million of gross
                                                                                                        proceeds for the
                                                                                                        Company

4/6/98                  Warrants               178,571      Warrants issued in             4(2)         exercisable from
                                                            connection with private                     4/6/98 through 4/6/01
                                                            placement                                   at an exercise price
                                                                                                        of $7.00 per share

4/13/98                 Warrants               100,000      Warrants issued in             4(2)         exercisable from
                                                            connection with an                          4/13/98 through
                                                            agreement to provide                        4/13/01 at an
                                                            financing to the                            exercise price of
                                                            Company, if necessary                       $7.50 per share
</TABLE>


Item 4.  Submission of Matters to a Vote of Security Holders

         On June 30, 1998, the Company held its annual meeting of  stockholders,
at which the Company's stockholders considered the election of directors and the
approval of an amendment to the Company's  1994  Performance  Equity Plan ("1994
Plan").  Stockholders  voted to elect Robert Bogin and Shelly Finkel to serve as
directors for the ensuing  three-year  period until his respective  successor is
elected and  qualified.  4,079,823  shares were voted for and 64,519 shares were
withheld in Robert  Bogin's  election  and  4,079,491  shares were voted for and
64,851 shares were withheld in Shelly Finkel's  election.  The stockholders also
voted on the  approval  of an  amendment  to the 1994 Plan to (i)  increase  the
number of shares of Common Stock available for issuance upon exercise of options
and other awards granted or which may be granted  thereunder from 500,000 shares
to 1,500,000 shares and (ii) revise Section 4.2 of the 1994 Plan to (a) apply to
only  non-employee  directors  and (b)  increase  the number of options  granted


                                       16

<PAGE>


annually  to each  non-employee  director  from 3,334  shares to 10,000  shares.
1,343,125  shares were voted for the amendment to the 1994 Plan,  136,368 shares
were voted against the amendment to the 1994 Plan,  54,367 shares abstained from
voting on the amendment to the 1994 Plan and 2,610,482 shares were not voted.

Item 5.  Other Information

         Pursuant  to Rule 14a-4  promulgated  by the  Securities  and  Exchange
Commission,  stockholders  are advised that the  Company's  management  shall be
permitted to exercise  discretionary  voting authority under proxies it solicits
and obtains for the Company's 1999 Annual Meeting of  Stockholders  with respect
to any  proposal  presented  by a  stockholder  at  such  meeting,  without  any
discussion  of the proposal in the Company's  proxy  statement for such meeting,
unless the Company receives notice of such proposal at its principal  offices in
Philadelphia, Pennsylvania no later than May 15, 1999.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         10.42    Amendment to Employment Agreement between the Company and 
                  David Tobin

         10.43    Amendment to Employment Agreement between the Company and 
                  Shelly Finkel

         10.44    Amendment to Employment Agreement between the Company and 
                  Robert Bogin

         27       Financial Data Schedule (6/30/98)

(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.
         
                                       17

<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:   August 14, 1998


                                   GLOBAL TELECOMMUNICATION SOLUTIONS, INC.



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


                                       18

<PAGE>