SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB

(Mark One)

|X| QUARTERLY REPORT UNDER SECTION 13 OR 14(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934.

                 For the Quarterly period ended January 31, 2000

                                       OR

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934.

           For the transition period from ____________ to ____________

                         Commission file number 0-21913

                            GROUP LONG DISTANCE, INC.
                 (Name of Small Business Issuer in Its Charter)

                     Florida                               65-0213198
      (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
       Incorporation or Organization)

                      6600 North Andrews Avenue, Suite 140,
                            Fort Lauderdale, FL 33309
                    (Address of Principal Executive Offices)

                                 (954) 771-9696
                (Issuer's Telephone Number, Including Area Code)

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 |_|

The number of shares of Common Stock, no par value, outstanding as of April 10,
2000 was 3,500,402.

Transitional Small Business Disclosure Format (check one): Yes |_|        No |X|




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                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                                      INDEX


                                                                                                                     Page
                                                                                                                     Number
                                                                                                                     ------
<S>                                                                                                                    <C>
PART I.      FINANCIAL INFORMATION

             Item 1.    Financial Statements

                        Consolidated Balance Sheets as of January 31, 2000 (Unaudited) and April 30,
                        1999........................................................................................   1

                        Unaudited Consolidated Statements of Operations for the Nine months ended and
                        Three months ended January 31, 2000 and 1999................................................   2

                        Unaudited Consolidated Statements of Cash Flows for the Nine months ended
                        January 31, 2000 and 1999...................................................................   3

                        Notes to Consolidated Financial Statements..................................................   4

             Item 2.    Management's Discussion and Analysis of Financial Condition
                        and Results of Operations ..................................................................   6

PART II.     OTHER INFORMATION

             Item 6.    Exhibits and Reports on Form 8-K............................................................  11

                        SIGNATURES..................................................................................  13


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                          PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                 January 31, 2000 (Unaudited) and April 30, 1999

                                                                                          January 31,        April 30,
                                                                                             2000               1999
                                                                                             ----               ----
                                                                                           (Unaudited)
<S>                                                                                        <C>                 <C>
                                             ASSETS
Current assets
Cash.................................................................................      $1,182,356          $502,946
Accounts receivable less allowance for doubtful accounts of $248,000 and
$388,000 at January 31, 2000 and April 30, 1999, respectively........................         585,059         1,291,461
Carrier receivable...................................................................         160,689                --
Prepaid expenses and other current assets............................................           4,750             6,155
                                                                                           ----------        ----------

Total current assets.................................................................       1,932,854         1,800,562

Property and equipment, net..........................................................           7,079            13,168
                                                                                           ----------        ----------

Total assets.........................................................................      $1,939,933        $1,813,730
                                                                                           ==========        ==========

                          LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities

Volume shortfall charge payable, net.................................................         488,890           407,738
Accounts payable.....................................................................         321,882           476,084
Deferred revenue.....................................................................              --         3,012,244
Income taxes payable.................................................................       1,417,612         1,769,900
Accrued expenses and other liabilities...............................................         128,782           511,953
                                                                                           ----------        ----------

Total liabilities....................................................................       2,357,166         6,177,919
                                                                                           ----------        ----------

Stockholders' deficit
Preferred stock, no par value, 2,000,000 shares authorized; no shares issued and
outstanding..........................................................................              --                --
Common stock, no par value, 12,000,000 shares authorized; 3,500,402
shares issued and outstanding as of January 31, 2000 and April 30, 1999,
respectively.........................................................................              --                --

Additional paid-in capital...........................................................       5,913,988         5,913,988
Accumulated deficit..................................................................      (6,331,221)      (10,278,177)
                                                                                           ----------        ----------

Total stockholders' deficit..........................................................        (417,233)       (4,364,189)
                                                                                           ----------        ----------

Total liabilities and stockholders' deficit..........................................      $1,939,933        $1,813,730
                                                                                           ==========        ==========

</TABLE>
        The accompanying notes are an integral part of these statements.

                                        1




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<CAPTION>

                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                   For the Nine Months and Three Months Ended
                            January 31, 2000 and 1999

                                                                    Nine Months                    Three Months
                                                                Ended January 31,                Ended January 31,
                                                                -----------------                -----------------
                                                              2000            1999             2000           1999
                                                              ----            ----             ----           ----
<S>                                                         <C>              <C>             <C>             <C>
Sales..................................................     $11,793,895      $21,312,008     $5,367,277      $5,408,839
Cost of Sales..........................................       4,257,870       12,922,067      1,023,465       2,834,374
                                                            -----------      -----------     ----------      ----------

Gross Profit...........................................       7,536,025        8,389,941      4,343,812       2,574,465
Selling, general and administrative expenses...........       1,481,622        2,180,276        340,343         249,914
Marketing Expenses.....................................              --          134,692             --              --
Depreciation and amortization..........................          14,168          771,262          1,000         208,884
                                                            -----------      -----------     ----------      ----------

Income from operations.................................       6,040,235        5,303,711      4,002,469       2,115,667
Interest Expense (Income), net.........................         (31,721)          82,989       (16,835)          29,943
                                                            -----------      -----------     ----------      ----------

Income before income taxes.............................       6,071,956        5,220,722      4,019,304       2,085,724
Income tax expense.....................................       2,125,000          800,000      1,425,000         500,000
                                                            -----------      -----------     ----------      ----------

Net income.............................................      $3,946,956       $4,420,722     $2,594,304      $1,585,724
                                                             ----------       ----------     ----------      ----------

Net income per common share--basic......................          $1.13            $1.26          $0.74           $0.45
                                                             ==========       ==========     ==========      ==========

Net income per common share--diluted....................          $1.13            $1.26          $0.74           $0.45
                                                             ==========       ==========     ==========      ==========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        2




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                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Nine months ended January 31, 2000 and 1999

                                                                                                Nine Months Ended
                                                                                                   January 31,
                                                                                            2000            1999
                                                                                            ----            ----
<S>                                                                                       <C>               <C>
Cash flows from operating activities
Net income..........................................................................      $3,946,956        $4,420,722
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization.......................................................          14,168           771,292
Provision for bad debts.............................................................         430,758           240,371
Changes in assets and liabilities
         Decrease in accounts receivable............................................         275,644         6,031,100
         Increase in Carrier receivable.............................................        (160,689)               --
         Decrease in prepaid expenses and other current assets......................           1,405            85,732
         Increase in volume shortfall charge payable, net...........................          81,152                --
         Decrease in accounts payable...............................................        (154,202)      (13,486,614)
         Decrease in Deferred revenue...............................................      (3,012,244)               --
         (Decrease) increase in accrued expenses and other liabilities..............        (383,171)        2,355,047
         (Decrease) increase in income taxes payable................................        (352,288)          933,854
                                                                                          ----------        ----------

            Net cash provided by operating activities...............................         687,489         1,351,504
                                                                                          ----------        ----------



 Cash flows from investing activities

        Acquisition of property and equipment.......................................          (8,079)               --
                                                                                          ----------        ----------

           Net cash used in financing activities....................................           (8079)               --
                                                                                          ----------        ----------



Cash flows from financing activities

        Principal repayments of long-term debt......................................              --        (1,007,704)
                                                                                          ----------        ----------

            Net cash used in financing activities...................................              --        (1,007,704)
                                                                                          ----------        ----------


Net increase in cash................................................................         679,410           343,800
Cash at beginning of year...........................................................         502,946           303,962
                                                                                          ----------        ----------

Cash at end of period...............................................................      $1,182,356          $647,762
                                                                                          ==========          ========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3




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                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

              UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A--BASIS OF PRESENTATION

         The accompanying unaudited condensed financial statements have been
prepared in accordance with the generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB.
Accordingly, they do not include all 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 fair presentation have been included.
Operating results for the nine months ended January 31, 2000 are not necessarily
indicative of the results that may be expected for the year ending April 30,
2000.

         The balance sheet at April 30, 1999 has been derived from the audited
financial statements at that date, but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. For further information, refer to the audited financial
statements and footnotes thereto included in the Form 10-KSB filed by the
Company for the year ended April 30, 1999.

NOTE B--FORMATION AND OPERATIONS OF THE COMPANY

         Group Long Distance, Inc. (the "Company") is a non-facilities-based
reseller of long distance telecommunications services to small and medium-sized
commercial customers and residential subscribers. The Company utilizes special
network service contracts through major national long-distance
telecommunications carriers to provide its customers with products and services
which include basic "1 plus" and "800" long distance services. The Company was
incorporated under the laws of Florida in September 1995 by ITC Integrated
System, Inc. ("ITC"), an unaffiliated third party, under the name Second ITC
Corporation ("Second ITC") as the successor to the business of Group Long
Distance, Inc. ("GLD"), which was incorporated under the laws of Florida in July
1990. In November 1995, GLD was merged into Second ITC and Second ITC
simultaneously changed its name to Group Long Distance, Inc. Unless otherwise
indicated, all references to the Company include GLD, the Company's predecessor,
and the Company's wholly owned subsidiaries. These subsidiaries include Eastern
Telecommunications Incorporated ("ETI"), Adventures-in-Telecom ("AIT") and Gulf
Communications Services, Inc ("GULF").

         As a non-facilities based reseller of long distance telecommunications
services, the Company utilizes service contracts to provide its customers with
switched, dedicated and private line services to long distance
telecommunications networks. The Company does not own or operate any primary
transmission facilities. All of the Company's products and services are
currently provided for by long distance carriers and regional and local
telephone companies. The Company has entered into agreements with TALK.com
("TALK"), formerly Tel-Save, Inc., a nationwide provider of telecommunications
services to purchase long distance telephone service at discounted bulk rates.
The Company then resells these discounted services to customers, at rates lower
than rates the Company's customers are able to obtain for themselves due to
small call volume. The Company then provisions the customer onto the carriers'
networks, which provide the actual transmission service. The Company does not
own or lease any telephone equipment at the customer's premises, nor does it
provide telephone cabling or installation services. The customer still maintains
its own existing telephone numbers, and all changes in service are done by the
local or interexchange carriers. The customers incur no expense in making the
decision to switch to the service of the Company.

                                       4
<PAGE>



                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

              UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C--TALK AGREEMENT

         On December 8th, 1999, based on a settlement agreement ("TALK
Agreement") with TALK, the Company agreed to pay $1.1 million to resolve the
shortfall charge. The $1.1 million was payable, 50% immediately and the balance
over an eighteen-month period. As part of the TALK Agreement, TALK agreed to
release approximately $2.9 million dollars of cash (net of the $550, 000) to the
Company that was held under a lockbox arrangement, and the release of all
receivables that were secured pursuant to a Partition Agreement, and that all
future minimum monthly volume commitments were waived by TALK. In addition, the
TALK Agreement provides for an extension of the current carrier agreement until
the later of August 31, 2002, or the date that all obligations to TALK have been
satisfied in full, and for the exchange of mutual releases. The remaining
balance of the volume shortfall charge as at January 31, 2000 was $488,890.

         As a result of the TALK Agreement, deferred revenue was recognized as
income in the current quarter results for the three months ended January 31,
2000. The deferred revenue related to funds, held by TALK under a lockbox
arrangement for which repayment at April 30, 1999 was uncertain. The lockbox
arrangement provided that all funds in the lockbox remained the property of TALK
until all amounts owed to TALK were fulfilled. The reversal of deferred revenue
resulted in higher sales for the nine and three months ended January 31, 2000
without a corresponding charge to cost of sales and an incremental increase in
net income before taxation of $3,012,244.

NOTE D--SUBSEQUENT EVENTS

         On March 28, 2000, the Company and Coyote Network Systems, Inc.
("COYOTE") executed a Letter of Intent, which provides, among other things, for
the merger between a wholly owned subsidiary of COYOTE and the Company. Pursuant
to the merger, the shareholders of the Company would receive approximately $5.6
million in shares of COYOTE common stock.

         The transaction is subject to, among other things, approval by both the
Company and COYOTE's board of directors, completion of due diligence, execution
of definitive documents and approval by the shareholders of the Company. It is
anticipated that the closing would occur in the Company's second fiscal quarter
ending October 31, 2000.

         On March 31, 2000 the Company filed a FORM 8-K with the Securities
Exchange Commission relating to the COYOTE Letter of Intent to acquire the
Company.

                                       5
<PAGE>



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

         The following discussion and analysis of significant factors affecting
the Company's operating results and liquidity and capital resources should be
read in conjunction with the accompanying financial statements and related
notes.

         This Report on Form 10-QSB contains forward-looking statements.
Additional written and oral forward-looking statements may be made by the
Company from time to time in Securities and Exchange Commission ("SEC") filings
and otherwise. The Company cautions readers that results predicted by
forward-looking statements, including, without limitation, those relating to the
Company's future business prospects, revenues, working capital, liquidity,
capital needs, interest costs, and income are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
indicated in the forward-looking statements. Some of these risks and factors are
identified herein and from time to time in the Company's filings with the SEC.
Readers are cautioned that forward-looking statements are not guarantees of
future performance and that the actual results may differ materially from those
suggested or projected in forward-looking statements. Accordingly, there can be
no assurance that the forward looking statements will occur, or that the results
will not vary significantly from those described in the forward-looking
statements.

Overview

         The Company is a long distance telecommunications provider. The Company
utilizes special network service contracts through major national long distance
telecommunications carriers to provide its customers with products and services
which include basic "1 plus" and "800" long distance services. As a
nonfacilities based reseller of long distance telecommunication services, the
Company utilizes service contracts to provide its customers with switched,
dedicated and private line services to various long distance telecommunications
networks such as TALK. The Company is dependent on TALK and numerous regional
and local telephone companies to provide its services and products. The
Company's revenues are currently solely derived from calls routed through TALK.

         The Company's prior agreements with TALK provided that the Company
maintain certain monthly revenues (as defined in the agreements) to the carrier
for services provided under the agreements during stated periods. Under these
prior agreements, the Company had an exposure for a monthly commitment for such
revenues of $3,000,000 (representing, in aggregate, $36,000,000 for the fiscal
year ended April 30, 1999 and $18,600,000 for the fiscal year ended April 30,
1998). Based on the TALK Agreement on December 8, 1999, the Company agreed to
pay $1.1 million to resolve the shortfall charge. As part of the TALK Agreement,
TALK agreed to release approximately $2.9 million dollars of cash to the Company
that was held under a lockbox arrangement, to release all receivables that were
secured pursuant to a Partition Agreement, and to waive all future minimum
monthly volume commitments. In addition, the TALK Agreement provides for an
extension of the current carrier agreement until the later of August 31, 2002,
or the date that all obligations to TALK have been satisfied in full, and for
the exchange of mutual releases. As a result of the TALK Agreement, deferred
revenue was recognized as income in the current quarter results for the three
months ended January 31, 2000. The deferred revenue related to funds, held by
TALK under a lockbox arrangement for which repayment at April 30, 1999 was
uncertain. The lockbox arrangement provided that all funds in the lockbox
remained the property of TALK until all amounts owed to TALK were fulfilled. The
reversal of deferred revenue resulted in higher sales for the nine and three
months ended January 31, 2000 without a corresponding charge to cost of sales
and an incremental increase in net income before taxation of $3,012,244.

                                       6
<PAGE>

         In October 1997, the Company outsourced its back office operations,
which included collections, customer service and provisioning, reducing its
workforce from 26 to 7 employees. The effect of this action was to significantly
reduce overhead costs and with the direct intention of improving customer
service. As of April 30, 1999 the Company employed four full-time employees and
at April 10, 2000, the Company employed three full-time employees.

         The Company is no longer conducting and has no plans to conduct any
marketing campaigns to attract new customers, since the Company has determined
that it is currently unable to both procure new customers, and achieve positive
earnings after amortization of acquisition costs for these new customers. This
is due to the competitive advantage held by facilities based carriers and
Internet marketing enterprises. Many of these services and products are marketed
by companies which are well established, have reputations for success in the
development and sale of services and products and have significantly greater
financial, marketing, distribution, personnel and other resources than the
Company. These resources permit such companies to implement extensive
advertising and promotional campaigns, both generally and in response to efforts
by additional competitors to enter into new markets and introduce new services
and products. Certain of these competitors, including AT&T, MCI/WorldCom and
Sprint, dominate the industry and have the financial resources to enable them to
withstand substantial price competition which has continued to increase.

         The Company commenced "LEC billing" arrangements with the Regional Bell
Operating Companies and local exchange carriers ("LEC") during the second
quarter of fiscal year 1998. These LEC billing arrangements have improved
billing efficiencies, increased collections and assisted in lowering customer
attrition, which without this arrangement could have been significantly higher.

         The Company's operating results are significantly affected by customer
attrition rates, particularly since the Company is no longer marketing its
services. The Company believes that a high level of customer attrition in the
industry is primarily a result of national advertising campaigns, telemarketing
programs and customer incentives provided by major competitors, as well as the
termination of service for non-payment. This is due to the competitive advantage
held by facilities based carriers and Internet marketing enterprises.

       The Company has explored strategic opportunities, partnerships and
business combinations. The Company has signed a Letter of Intent with COYOTE to
merge with a subsidiary of COYOTE (See Unaudited Notes to Consolidated Financial
Statements "Note D- Subsequent Events").

                                       7
<PAGE>

       Results of Operations

       The following table sets forth for the periods indicated the percentages
of total sales represented by certain items reflected in the Company's
consolidated statements of operations:
<TABLE>
<CAPTION>

                                                               Nine Months Ended               Three Months Ended
                                                                 January 31,                        January 31,
                                                           2000              1999             2000               1999
                                                           ----              ----             ----               ----
<S>                                                        <C>               <C>              <C>                <C>
Sales..............................................        100%              100%             100%               100%
Cost of Sales......................................         36                61                19                52
Gross profit.......................................         64                39                81                48
Selling, general and administrative expense.                13                10                 6                 5
Marketing expenses.................................         --                 *                --                --
Depreciation and amortization expense..............          *                 4                 *                 4
Interest expense/income, net.......................          *                 *                 *                 1
Income before income taxes.........................         51                25                75                38
Income tax expense.................................         18                 4                27                 9
Net income.........................................         33                21                48                29
</TABLE>
-------------
*Less than 1 percent

Comparison of Nine months ended January 31, 2000 to Nine months ended January
31, 1999 and of Three months ended January 31, 2000 to Three months ended
January 31, 1999.

         Sales. The Company's sales were $11,793,895 for the nine months ended
January 31, 2000, compared to $21,312,008 for the nine months ended January
31,1999, a decrease of $9,518,113 or 45%. The Company's sales were $5,367,277
for the three months ended January 31, 2000, compared to $5,408,839 for the
three months ended January 31, 2000, a decrease of $41,562 or 1%. The decreases
in sales were a result of the termination of the previous telemarketing campaign
and normal attrition of the customer base. Sales for the nine months and three
months ended January 31, 2000 includes deferred revenue being recognized as
income in the current quarter of $3,012,244 as a result of the TALK Agreement.
Management believes attrition of customer base is being experienced by other
companies in the Industry that are positioned similarly to the Company. The
Company has determined that it is currently difficult to both market to procure
new customers and achieve positive earnings after amortization of acquisition
costs for these new customers. This is due to the competitive advantage held by
facilities based carriers and Internet marketing enterprises. Because the
Company is not currently marketing its products and services, the Company's
revenues are likely to continue to decline, although at a reduced rate. The
Company anticipates this trend to continue through the rest of the fiscal year
ending April 30, 2000, and thereafter.

         Cost of Sales. Cost of sales were $4,257,870 for the nine months ended
January 31, 2000, compared to $12,922,067 for the nine months ended January
31,1999, a decrease of $8,664,197 or 67%. Cost of sales were $1,023,465 for the
three months ended January 31, 2000, compared to $2,834,374 for the three months
ended January 31, 1999, a decrease of $1,810,909 or 64%. As a percentage of
sales, cost of sales was 36% and 61% for the nine months ended January 31, 2000
and nine months ended January 31, 1999, respectively. As a percentage of sales,
cost of sales was 19% and 52% for the three months ended January 31, 2000 and
three months ended January 31, 1999, respectively. The decrease in cost of sales
between comparative periods was due to the decrease in revenues as a result of
customer attrition. The decrease in cost of sales as a percentage of sales in
the current fiscal year is primarily as a result of the effect of the
recognition of the deferred revenue in the current quarter, the Company being
able to better negotiate its buy rate from its carrier as a result of the TALK
Agreement and a change in the mix of customer base from the nine months ended
January 31, 1999.

                                       8
<PAGE>

         Gross Profit. Gross profit was $7,536,025 for the nine months ended
January 31, 2000 compared to $8,389,941 for the nine months ended January
31,1999, a decrease of $853,916 or 10%. Gross profit was $4,343,812 for the
three months ended January 31, 2000 compared to $2,574,465 for the three months
ended January 31, 1999, an increase of $1,769,347 or 68%. As a percentage of
sales, gross profit was 64% and 39% for the nine months ended January 31, 2000
and January 31, 1999, respectively. As a percentage of sales, gross profit was
81% and 48% for the three months ended January 31, 2000 and three months ended
January 31, 1999, respectively. The increase in gross profit percentages in the
nine months ended January 31, 2000 was primarily as a result of the effect of
the recognition of the deferred revenue in the current quarter, a lower buy rate
from the carrier and improved margins on, and a change in the mix of customer
base from the nine months ended January 31, 1999.

         Selling, General and Administrative Expense. Selling, general and
administrative expenses ("SG&A") were $1,481,622 for the nine months ended
January 31, 2000 compared to $2,180,276 for the nine months ended January 31,
1999, a decrease of $698,654 or 32%. Selling, general and administrative
expenses ("SG&A") were $340,343 for the three months ended January 31, 2000
compared to $249,914 for the three months ended January 31, 1999, an increase of
$90,429 or 36%. SG&A expenses for the nine months ended January 31, 2000 include
accruals for two Severance Packages totaling $310,000 for Messrs. Dunne, former
President and Chief Executive Officer of the Company, and Russo, former Chief
Financial Officer of the Company. As a percentage of sales, SG&A for the nine
months ended January 31, 2000 and 1999 was approximately 13% and 10%,
respectively. As a percentage of sales, SG&A for the three months ended January
31, 2000 and 1999 was approximately 6% and 5%, respectively. This increase in
SG&A for the three months ended January 31, 2000 as compared to the three months
ended January 31, 1999, was due to a once-time reversal of certain accruals no
longer deemed necessary for the three months ended January 31, 1999. This had
the effect of significantly reducing operating expenses for the three months
ended January 31, 1999.

         Marketing Expenses. There were no marketing expenses for the nine
months and three months ended January 31, 2000. Marketing expenses were $134,692
for the nine months ended January 31, 1999. During the nine months ended January
31, 1999, the Company entered into a new marketing campaign to sign up customers
using independent agents, aligned with affinity based marketing programs. This
campaign was discontinued during the second quarter of fiscal year 1999. The
Company is no longer conducting, nor does it have any plans to conduct any
marketing campaign to attract new customers, since the Company has determined
that it is currently difficult to both procure new customers and achieve
positive earnings after amortization of acquisition costs for these new
customers. This is due to the competitive advantage held by facilities based
carriers and Internet marketing enterprises.

         Depreciation and Amortization Expense. Depreciation and amortization
expense was $14,168 for the nine months ended January 31, 2000 compared to
$771,262 for the nine months ended January 31,1999, a decrease of $757,094 or
98%. Depreciation and amortization expense was $1,000 for the three months ended
January 31, 2000 compared to $208,884 for the three months ended January 31,
1999, a decrease of $207,884 or 99%. As a percentage of sales, depreciation and
amortization expense was less than 1% for the nine months ended January 31, 2000
and approximately 4% for the nine months ended January 31,1999. As a percentage
of sales, depreciation and amortization expense was less than 1% for the three
months ended January 31, 2000 and approximately 4% for the three months ended
January 31, 1999. For the nine months ended January 31, 2000 no amortization was
provided, since the customer acquisition costs were fully expensed as at April
30, 1999. The depreciation and amortization for the nine months ended January
31,1999 was related to the acquisition of the AIT customer base.

         Interest Expense (Income), Net. Interest income (net) for the nine
months ended January 31, 2000 was $31,721 compared to an interest expense of


                                       9
<PAGE>

$82,989 for the nine months ended January 31,1999. Interest income (net) for the
three months ended January 31, 2000 was $16,835 compared to an interest expense
of $29,943 for the three months ended January 31, 1999. The interest income for
the nine months and three months ended January 31, 2000 was interest earned as a
result of a positive cash balance. The interest expense for the nine months and
three months ended January 31,1999 was primarily due to interest paid on a Note
payable to WorldCom under a settlement agreement. This Note was subsequently
settled during the fiscal 1999 year.

         Income Taxes. Income tax expense of $2,125,000 was provided for the
nine months ended January 31, 2000 compared to $800,000 for the nine months
ended January 31,1999. Income tax expense of $1,425,000 was provided for the
three months ended January 31, 2000 compared to $500,000 for the three months
ended January 31, 1999. For the nine months ended January 31, 2000, the Company
applied the applicable statutory federal income tax rate of 34% to pretax income
without taking into account any tax allowances or benefits.

         Net Income. The Company had a net income of $3,946,956 or net income of
$1.13 per share, for the nine months ended January 31, 2000, as compared to net
income of $4,420,722 or $1.26 per share, for the nine months ended January
31,1999. The Company had a net income of $2,594,304, or net income of $0.74 per
share, for the three months ended January 31, 2000, as compared to net income of
$1,585,724, or $0.45 per share, for the three months ended January 31, 1999. The
net income for the nine months and three months ended January 31, 2000 was
primarily due to the reversal of the deferred revenue of $3,012,244 as a result
of the TALK agreement, and improved operating margins despite a decrease in
sales. The reversal of deferred revenue resulted in higher sales for the nine
and three months ended January 31, 2000 without a corresponding charge to cost
of sales and an incremental increase in net income before taxation of
$3,012,244.

Liquidity and Capital Resources

         The Company's primary cash requirements had historically been to fund
the acquisition of customer bases and to fund increased levels of accounts
receivable (which have required substantial working capital) and to fund net
losses. The Company has historically satisfied its working capital requirements
principally through cash flow from operations (including advances from TALK) and
borrowings from institutions and carriers. The reduced levels of sales and
receivables together with the positive cash position has significantly reduced
the Company's reliance on borrowings.

         At January 31, 2000, the Company had a working capital deficit of
$424,312, as compared to working capital deficit of $4,377,357 at April 30,
1999. The working capital deficit during the nine months ended January 31, 2000
was primarily due to income taxes payable of approximately $1.4 million and
after taking into account the release of cash held in the lockbox arrangement as
a result of the TALK agreement and the payment of all Federal and State taxes
for the fiscal year ended April 30, 1999. For the fiscal year ended April 30,
1999 the working capital deficit was largely due to the deferred revenue of
approximately $3 million and income taxes payable of approximately $2 million.
The deferred revenue related to funds, held by TALK under a lockbox arrangement
for which repayment at that date was uncertain. The lockbox arrangement provided
that all funds in the lockbox remained the property of TALK until all amounts
owed to TALK were fulfilled. The uncertainty related to a volume shortfall
charge based on monthly minimum volume commitments as at April 30, 1999, which
was resolved by the TALK Agreement signed on December 8, 1999. As a result of
the TALK Agreement the deferred revenue was recognized as income in the current
quarter results for the three months ended January 31, 2000.

         The volume shortfall charge was included in volume shortfall charge
payable, net, for which the right of offset existed. The volume shortfall charge
related to the Company's failure to satisfy volume purchase commitments from its
carrier, TALK. The volume shortfall charge at January 31, 2000 was $488,890 and
at April 30, 1999 was $1.1 million. The Company's agreements with TALK provided
that the Company maintain certain monthly revenues (as defined in the
agreements) to the carrier for services provided under the agreements during
stated periods. Under these prior agreements, the Company had an exposure for a
monthly commitment for such revenues of $3,000,000 (representing, in aggregate,
$36,000,000 for the fiscal year ended April 30, 1999 and $18,600,000 for the

                                       10
<PAGE>

fiscal year ended April 30, 1998). Based on a settlement agreement ("TALK
Agreement") with TALK on December 8, 1999, the Company agreed to pay $1.1
million to resolve the shortfall charge. The $1.1 million was payable, 50%
immediately and the balance over an eighteen-month period. As part of the TALK
Agreement, TALK agreed to release approximately $2.9 million dollars of cash to
the Company (net of the $550,000) that was held under a lockbox arrangement, to
release all receivables that were secured pursuant to a Partition Agreement, and
to waive all future minimum monthly volume commitments. In addition, the TALK
Agreement provides for an extension of the current carrier agreement until the
later of August 31, 2002, or the date that all obligations to TALK have been
satisfied in full, and for the exchange of mutual releases.

         Net cash provided by operating activities was $687,489 for the nine
months ended January 31, 2000 as compared to net cash provided by operating
activities of $1,351,504 for the nine months ended January 31, 1999. The net
cash provided by operating activities for the nine months ended January 31, 2000
is primarily attributable to net income from operating activities, a reversal of
deferred revenue and offset by a decrease in volume shortfall charge payable and
income taxes payable.

         For the nine months ended January 31, 1999, the cash provided by
operating activities is attributable to net income from operating activities, a
decrease in accounts receivable as a result of collections and offset by a
decrease in accounts payable as a result of repayment of debt.

         Cash used in investing activities was $8,079 for the nine months ended
January 31, 2000. No Cash was used in investing activities for the nine months
ended January 31, 1999.

         No cash was used in financing activities for the nine months ended
January 31, 2000 as compared to cash used in financing activities of $1,007,704
for the nine months ended January 31, 1999. The cash used in financing
activities for the nine months ended January 31, 1999 is primarily attributable
to the payment made under the settlement of the AT&T debt outstanding in July
1998 as well as all payments made to WorldCom under a settlement agreement. At
January 31, 2000, the Company had cash of $1,182,356.


                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

  (a) Exhibits

      3.1    Amended and Restated Articles of Incorporation of Registrant.
             (Filed as an Exhibit to Amendment No. 1 to the Company's
             Registration Statement on Form SB-2 (No. 333-17681) filed March 3,
             1996 and incorporated herein by reference.)

      3.2    Amended and Restated By-laws of Registrant. (Filed as an Exhibit to
             Amendment No. 1 to the Company's Registration Statement on Form
             SB-2 (No. 333-17681) filed March 3, 1996 and incorporated herein by
             reference.)

      4.1    Form of Representative's Warrant Agreement including Form of
             Representative's Warrant Certificates. (Filed as an Exhibit to
             Amendment No. 1 to the Company's Registration Statement on Form
             SB-2 (No. 333-17681) filed March 3, 1996 and incorporated herein by
             reference.)

      4.2    Form of Redeemable Warrant Agreement including Form of Warrant
             Certificate. (Filed as an Exhibit to Amendment No. 1 to the
             Company's Registration Statement on Form SB-2 (No. 333-17681) filed
             March 3, 1996 and incorporated herein by reference.)

                                       11
<PAGE>

      4.3    Form of Common Stock Certificate. (Filed as an Exhibit to the
             Company's Annual Report on Form 10-KSB for the year ended April 30,
             1998 and incorporated herein by reference.)

      10.1   Separation Agreement between Peter J. Russo with Registrant. (Filed
             as an Exhibit to the Company's Annual Report on Form 10-KSB for the
             year ended April 30, 1999 and incorporated herein by reference.)

      10.2   Consulting Agreement between Torbay Management Services, Inc., with
             Registrant. (Filed as an Exhibit to the Company's Annual Report on
             Form 10-KSB for the year ended April 30, 1999 and incorporated
             herein by reference.)

      10.3   Separation Agreement between Gerald M. Dunne, Jr. with Registrant.
             (Filed as an Exhibit to the Company's Annual Report on Form 10-KSB
             for the year ended April 30, 1999 and incorporated herein by
             reference.)

      10.4   Employment Agreement of Glenn S. Koach with Registrant. (Filed as
             an Exhibit to the Company's Annual Report on Form 10-KSB for the
             year ended April 30, 1999 and incorporated herein by reference.)

      10.5   Sublease Agreement between ADMINASSISTANCE with the Registrant
             dated November 4, 1999. (Filed as an Exhibit to the Company's
             Annual Report on Form 10-KSB for the year ended April 30, 1999 and
             incorporated herein by reference.)

      10.6   Employment Agreement of Sam D. Hitner with Registrant. (Filed as an
             Exhibit to the Company's Quarterly Report on Form 10-QSB for the
             nine months ended January 31, 2000.)

             (b) Exhibit 27--Financial Data Schedule

             (c) Reports on Form 8-K

                  None

                                       12
<PAGE>

                                   SIGNATURES

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

                            GROUP LONG DISTANCE, INC.
<TABLE>
<CAPTION>

           Signature                              Title                               Date
           ---------                              -----                               ----

<S>                               <C>                                                   <C>
By: /s/ GLENN S. KOACH            President and Chief Executive Officer           April 10, 2000
    ---------------------         (Principal Executive Officer)
    Glenn S. Koach


By: /s/ SAM D. HITNER             Chief Financial Officer                         April 10, 2000
    ---------------------         (Principal Financial and Accounting Officer)
    Sam D. Hitner


</TABLE>

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