SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

               Quarterly Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                For the quarterly period ended: December 31, 1998

                               GS TELECOM LIMITED
             (Exact name of registrant as specified in its charter)


                  TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
                                  (Former name)

  Colorado                        0-13313                     36-3296861  
---------------                 -----------                   ------------------
(State or other                 (Commission                   IRS Employer
jurisdiction of                 File Number)                  Identification No.
incorporation)



First Floor, Hampton House, 20 Albert Embankment London SE1 7TJ
---------------------------------------------------------------
(Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code 44-171-587 3687

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                           Yes  X        No   ____

As of December 31, 1998,  there were  16,828,414  shares of common stock, no par
value, outstanding.



<PAGE>

<TABLE>
<CAPTION>

PART I:  FINANCIAL INFORMATION
                                                                              F3
GS TELECOM LIMITED
(Unaudited)
Condensed Consolidated Balance Sheet                           December 31,         December 31,
                                                               1998                 1997
                                                                $                    $
                                                               ------------         ------------
<S>                                                            <C>                  <C>
ASSETS

CURRENT ASSETS
Cash                                                            -                       45,647
Accounts Receivable                                                 3,938               83,048
                                                                                        30,835
Prepaid Value Added Tax                                            16,309               39,454
                                                         -----------------    -----------------
            Total Current Assets                                    20247               198984
                                                         -----------------    -----------------

PROPERTY AND EQUIPMENT                                                                  32,704
    less accumulated depreciation of $44947
                                                         =================    =================
                                                                    20247               231688
                                                         =================    =================

Goodwill less accumulated Amortization                                                 692,648

Other Assets                                                                            11,180

                                                         -----------------    -----------------
TOTAL FIXED, CURRENT AND OTHER ASSETS                               20247               935516
                                                         -----------------    -----------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                                                $                    $
CURRENT LIABILITIES
Convertible and demand notes payable                              588,900              376,500
Accounts payable                                                  763,718              621,208
Payable to Affilliates and Related Parties                        345,976
Accrued interest payable                                           48,878                2,766
Bank overdrafts net of cash of $32                                  1,378
                                                         -----------------    -----------------
            Total current liabilities                           1,748,850              1000474
                                                         -----------------    -----------------


STOCKHOLDERS' EQUITY (DEFICIT) Common stock, no par value per share;  Authorized
100,000,000 shares; Issued and outstanding 16,828,220           1,137,357            1,137,357
Accumulated deficit                                            (2,871,470)          (1,205,315)
Foreign currency translation adjustments                            5,510                3,000

                                                         -----------------    -----------------
Total stockholders' (deficit)                                 $(1,728,603)            $(64,958)
                                                         -----------------    -----------------

                                                         =================    =================
Liabilities and Stockholders Equity (Deficit)                      20,247               935516
                                                         =================    =================

See Accompanying Notes

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                              F4
(Unaudited)
GS TELECOM LIMITED                                                          Three Months ended                    Six  Months ended
Condensed Consolidated Statement of Operations             December 31          December 31      December 31       December 31
                                                            1998                 1997             1998              1997
                                                             $                    $                 $                $
                                                           -----------          -----------      -----------      -----------------
<S>                                                        <C>                  <C>              <C>              <C>
Net Sales                                                                            28,477                             28,477

Cost of Sales                                                                        18,744                             18,744

                                                         -----------------    ----------------------------------------------------
            Gross Income (Loss)                                      ()               9,733                 ()           9,733
                                                         -----------------    ----------------------------------------------------

Selling, General and Administrative Expenses                   (70,021)             248,395          (133,905)         248,395

                                                         -----------------    ----------------------------------------------------
LOSS FROM CONTINUING OPERATIONS                            $   (70,021)        $   (238,662)     $   (133,905)    $   (238,662)
                                                         -----------------    ----------------------------------------------------

Discontinued Operations

Write-Off of Investment in unconsolidated subsidiary

Write-off of goodwill of consolidated subsidiaries

                                                         -----------------    ----------------------------------------------------
            Loss from discontinued operations                        ()                   ()                ()               ()
                                                         -----------------    ----------------------------------------------------

            Loss before extraordinary item                $    (70,021)       $    (238,662)    $    (133,905)   $    (238,662)

EXTRAORDINARY ITEM -
            SETTLEMENT AND EXTINGUISHMENT OF
            TRADE DEBT AND RELATED PARTY
            AMOUNTS PAYABLE

                                                         =================    ====================================================
NET INCOME (LOSS)                                         $    (70,021)       $    (238,662)    $    (133,905)   $    (238,662)
                                                         =================    ====================================================

BASIC AND DILUTIVE NET INCOME (LOSS) PER SHARE:

(LOSS) FROM CONTINUING OPERATIONS                               $(0.00)              $(0.86)           $(0.01)          $(0.86)
(LOSS) FROM DISCONTINUED OPERATIONS                             $(0.00)              $(0.00)           $(0.00)          $(0.00)
EXTRAORDINARY ITEM
                                                         =================    ====================================================
PER SHARE NET LOSS                                              $(0.00)              $(0.86)           $(0.01)          $(0.86)
                                                         =================    ====================================================

WEIGHTED AVERAGE SHARES OUTSTANDING                          16,828,414              278,220        16,828,414          278,220
                                                         =================    ====================================================

See Accompanying Notes

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

(Unaudited)                                                                              F5
GS TELECOM LIMITED
Condensed Consolidated Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
                                                         Three Months ended                         Six  Months ended
                                                              December 31          December 31      December 31
                                                               1998                 1998             1997
                                                                $                    $                 $
                                                         ------------------        -----------      -----------------
<S>                                                      <C>                       <C>              <C>
Net income (loss)                                                 (70,021)            (133,905)         (238,662)

PROVIDED BY OPERATING ACTIVITIES
Write-off Investment in Unconsolidated Subsidiary
Write-off Goodwill of Consolidated Subsidiaries
Common Stock Issued for Services                                                                          20,500
Depreciation and amortization                                                                              2,947
Changes in Operating Assets and Liabilities
            Receivables                                                                                   (9,657)
            Inventories                                                                                  (23,434)
            Prepaid and Other Assets                                                                     (16,306)
            Accounts Payable                                       40,351                55696          (239,279)
            Accrued Interest Payable                               12,583                25166             2,766
            Bank Overdraft
                                                         =================    ===================================
Net Cash Flows from (used for) operating activities             $ (17,087)               78209        $ (501,125)
                                                         =================    ===================================

CASH FLOWS FROM INVESTING ACTIVITIES
            Purchase of intangibles                                                                         (188)
            Investment in Unconsolidated Subsidiary
            Cash at subsidiary at date of acquisition                                                     36,173
            Investment in Consolidated Subsidiaries
                                                         =================    ===================================
            Net Cash Flows (used for) investing activities              ()                   ()           35,985
                                                         =================    ===================================

CASH FLOWS FROM FINANCING ACTIVITIES
         Advances from (repaid to) affiliates and related parties   17087                                134,083

         Issuance of Convertible and other notes payable                                                 376,500
                                                         =================    ===================================
         Net Cash Flows (used for) financing activities            17,087                    ()           510583
                                                         =================    ===================================

                                                         =================    ===================================
EFFECT OF EXCHANGE RATE CHANGES ON CASH
                                                         =================    ===================================

NET INCREASE (DECREASE) IN CASH                                         ()                               (45,443)

CASH AT BEGINNING OF PERIOD                                             0                                    204

                                                         =================    ===================================
CASH AT PERIOD END                                                      0                    0             45647
                                                         =================    ===================================

SUPPLEMENTAL DISCLOSURES

Net Interest Paid                                                   12583                25166              2766
Non-cash investing and financing activities


See Accompanying Notes

</TABLE>

<PAGE>


GS Telecom Limited
Notes to Consolidated Financial Statements
(Unaudited)

Note A - Organization and Business

Organization and Nature of Business

GS Telecom Limited, formerly  Teleconferencing Systems International,  Inc. (the
"Company") was incorporated in Colorado on December 19, 1983.  Activities of the
Company from June 30, 1995 until November 15, 1997 were primarily liquidation of
operating  assets and settlement of obligations  owed creditors and employees as
previously reported.

On November 15, 1997, the Company acquired an Isle of Man company; also named GS
Telecom  Limited  (later  changed  to GST  Limited - "GST"),  by  issuance  of a
$150,000  convertible  note  payable.  GST,  the  acquired  subsidiary,  had net
liabilities  of  $544,268.  The note  payable was  subsequently  converted  into
14,500,000   shares  of  common  stock  and  issued  to  the  acquired   company
stockholders.

The assets of the GST  subsidiary  also  included  Associated  Power  Industries
Limited  ("API"),  an U.K.  designer and manufacturer of energy savings systems.
GST owns 50% of API with an  option  to  acquire  the  remaining  50%  ownership
interest for three years beginning  September 1, 1998. The investment in API had
been accounted for using the equity method.  Since the Company had  insufficient
Board  representation  or other control  attributes and as a result of continued
operating losses by API, during fiscal 1998, management elected to write off its
investment of $242,447.

GST also has two U.K. wholly owned subsidiaries:  Guardian Smart Systems Limited
("GSS") and Total Energy Controls  (Commercial) Limited ("TECC").  GSS' business
is the design and  marketing  of domestic  energy  savings  and home  management
systems and TECC's  business is to market and install  commercial  energy saving
devices.  Mainly  due to a lack of  working  capital,  neither  GSS nor TECC was
successful,  and  Management  elected,  effective  June 30, 1998, to discontinue
operations.  Accordingly,  the Company has taken steps and adopted a plan to pay
obligations  owed  employees  and others,  resulting in an  estimated  loss from
discontinued operations of $140,099, and expensed un-amortized goodwill totaling
$475,367.  This was reflected in fiscal 1998.

Going Concern Considerations
----------------------------
The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going concern,  which  contemplates the realization of assets
and  satisfaction  of liabilities in the normal course of business.  The Company
has incurred  significant recurring  losses and ha  substantial  working capital


<PAGE>





GS Telecom Limited
Notes to Consolidated Financial Statements
(Unaudited)

and stockholders' deficits as of December 31, 1998.

At quarter end, the Company had no substantial  product,  services or properties
and required significant additional financing to satisfy outstanding obligations
and to commence operations.  Management's plans to address these matters include
private  placements of stock,  obtaining  short-term loans, and seeking suitable
joint venture relationships in technology and e-commerce fields of business.

Since June 30, 1998 the Company has  entered  into an  agreement  to acquire for
common  stock of the  Company,  software  ownership  interests  in software  and
special effects production companies (see Note I).

Note B - Summary of Significant Accounting Policies

Principles of Consolidation
---------------------------
The  financial  statements  include  the  accounts  of GS Telecom  Limited,  GST
Limited,  Guardian Smart Systems Limited and Total Energy Controls  (Commercial)
Limited. All significant inter-company transactions and balances have been
eliminated.

Use of Estimates
----------------
Preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Significant areas requiring the use of management estimates are accrual of costs
of   discontinued   operations,   assessment  of  realization  of  goodwill  and
investments, useful asset lives for depreciation and amortization, and valuation
of stock of issued for  services  and  deferred  tax  benefits.  Actual  results
inevitably  will  differ  from  those  estimates,  and such  differences  may be
material to the financial statements.

Foreign Currency
----------------
The financial  statements of the Company's non-U.S.  subsidiaries are translated
into U.S. dollars using current rates of exchange, with gains or losses included
in the cumulative translation adjustment account in the

<PAGE>


GS Telecom Limited
Notes to Consolidated Financial Statements
(Unaudited)

stockholders' equity section of the consolidated balance sheet. Revenues,  costs
and expenses denominated in foreign functional  currencies are translated at the
weighted  average  exchange  rate for the  period.  Gains and losses on currency
transactions  (denominated  in  currencies  other than the local  currency)  are
reflected in the statement of consolidated operations.

Revenue Recognition
-------------------
Sales are recognized  when products are shipped.  Sales generally are on an open
account basis, subject to credit limits.

Property, Plant and Equipment
-----------------------------
Property,  equipment and vehicles are recorded at cost.  Maintenance  and repair
costs are charged to expense as incurred,  and renewals  and  improvements  that
extend the useful life of assets are capitalized. Depreciation is computed using
the straight-line method over the assets' estimated useful lives as follows:

                           Equipment                          4  years
                           Vehicles                           4  years
                           Office equipment                   4  years

In fiscal 1998,  substantially all operations of the Company's subsidiaries were
discontinued and the remaining net costs of depreciable assets were charged off.
Accordingly,  depreciation  expense recorded in fiscal 1998 and 1997 was $44,947
and none, respectively.

Goodwill
--------
Goodwill arose from the  acquisition of GST in fiscal 1998 for assumption of net
liabilities  totaling  $332,800  and  issuance  of a $150,000  convertible  note
payable to stockholders of the subsidiary.  Prior to June 30, 1998, goodwill was
being  amortized over 40 years on a  straight-line  basis.  As of June 30, 1998,
Management  elected to  discontinue  the  operations  of GST,  and  accordingly,
write-off the $475,367 unamortized cost of the goodwill in fiscal 1998.

Income Taxes
------------
The Company has adopted the  provisions  of Statement  of  Financial  Accounting
Standards No. 109,  "Accounting for Income Taxes," which incorporates the use of
the asset and liability  approach of accounting for income taxes.  The asset and
liability   approach  requires  the  recognition  of  deferred  tax  assets  and
liabilities  for the  expected  future  consequences  of  temporary  differences
between the financial  reporting  basis and tax basis of assets and  liabilities
(see Note D).

<PAGE>


GS Telecom Limited
Notes to Consolidated Financial Statements
(Unaudited)

Statement of Cash Flows Information and Supplemental Non-Cash Financing
Activities

Cash and cash equivalents include cash and short-term  investments with original
maturities of three months or less.

Basic Earnings (Loss) Per Share
-------------------------------
Basic earnings  (loss) per share of common stock are computed using the weighted
average number of shares  outstanding  during each period.  Diluted earnings per
share  is  computed  on the  basis  of  the  average  number  of  common  shares
outstanding plus the dilutive effect of convertible notes payable.

The basic and the dilutive  earnings per share are the same in fiscal 1998 since
the Company had a net loss and the  inclusion  of the effect of the  convertible
notes issued in 1998 would be anti-dilutive.

Note C - Notes Payable

Unsecured 9% notes payable to an individual dated February 19, 1998
and March 31, 1998, payable on demand.                                  $212,400

8% convertible  notes payable issued  November 20, 1997,
due September 30, 2000.                                                  376,500
                                                                        --------
                                                                        $588,900
                                                                        ========

The  notes are  classified  as a  current  liability  because  the  Company  has
subsequently agreed to repay the obligations upon receipt of anticipated funding
in fiscal 1999.

Note D - Income Taxes
As a result of the  substantial  change in ownership of the Company arising from
the  issuance  of 14.5  million  shares of common  stock in November  1997,  the
Company's net operating loss carryforward  became limited to the estimated value
of the stock issued.  As of June 30, 1998 the  accumulated  net  operating  loss
carryforward  totals  approximately  $150,000 that may be offset  against future
taxable income,  if any. The loss  carryforward  expires in varying amounts from
2003 through 2013.

<PAGE>


GS Telecom Limited
Notes to Consolidated Financial Statements
(Unaudited)

Note E - Stockholders' Equity

Stock-Split
-----------
On January 6, 1998,  the board of directors  approved a 150-to one reverse split
of the issued and  outstanding  common shares of the Company.  All share and per
share amounts have been  retroactively  restated in the  accompanying  financial
statements to reflect the effect of the reverse stock split.

Conversion of Note Payable
--------------------------
On  November  15,  1997,  the  Company  acquired  GST by  issuance of a $150,000
convertible note payable to GST  stockholders.  On January 6, 1998, the $150,000
note payable was converted into 14,500,000 shares of common stock (approximately
$.01 per share).

Stock Issued for Services
-------------------------
On February 10, 1998, the Company issued 2,050,000 shares of common stock to two
individuals  (holders of note payable from the Company) for services  related to
the  reorganization of the Company.  The value of the services were estimated at
$20,500 ($.01 per share).

Convertible Notes Payable
-------------------------
The convertible  note holders have the option to convert the original  principal
amount of the notes (a total of  $376,500)  into common stock at the lower of $2
per share or 75% of the average  closing bid price of the stock for trading five
days prior exercise.  Notwithstanding the foregoing, if, after the effectiveness
of a registration  statement or if an exemption is available from  registration,
the  closing  bid  price of the  common  stock  reaches  $4 per  share  for five
consecutive trading days, the Company has the option to require conversion of up
to 50% of the original  principal,  and if the closing bid price  reaches $8 per
share, the Company has the option of requiring conversion of all of the original
principal.

Note F - Related Party Transactions

The   Company    paid    management    fees   to   an   entity    owned   by   a
stockholder/director/officer of the Company totaling $12,000 in 1997.

Note G - Commitments

The Company  leases its present  office on a month-to  month basis at $1,000 per
month.

<PAGE>


GS Telecom Limited
Notes to Consolidated Financial Statements
(Unaudited)

Note H - Fair Value of Financial Instruments

The  carrying  amounts for  accounts  receivable,  accounts  payable and accrued
expenses  approximates  fair  value  because  of the short  maturities  of these
instruments.  The fair value of notes payable approximates fair value because of
the market rate of interest on the debt.

The  determinations  of fair value  discussed above are subjective in nature and
involve  uncertainties  and significant  matters of judgement and do not include
income tax  considerations.  Therefore,  the results  cannot be determined  with
precision and cannot be substantiated by comparison to independent market values
and may not be realized in actual sale or settlement of the instruments.

Note I - Events Subsequent to June 30, 1998 (Unaudited)

In  September  1998,  the Company  entered  into a reverse  merger  agreement to
acquire  Masstech,  Inc.,  a  Delaware  corporation.  Subsequently,  the  merger
agreement  was  modified to provide for the  Masstech  software  and  intangible
property rights ("IPR") for $150,000 in the form of 6.6 million shares of common
stock of the Company (approximately $.23 per share). In addition, two principals
of Masstech,  Dr.  Steven Gillam and Mr.  Andrew  Castle,  agreed to sell to the
Company  for 48.4  million  shares of  common  stock of the  Company,  their 15%
ownership  interest  in each of four  companies  involved in  producing  special
effects for the Hollywood film industry:

                  Manex Studios, LLC
                  Manex Visual Effects, LLC
                  Manex Entertainment, LLC
                  Mass Illusions, LLC

The  transaction  was entered  into in  September  1998 and modified in December
1998. It is subject to due diligence and other conditions and is not yet closed.
Subsequent  to entering  into the initial  agreement,  Dr. Gillam and Mr. Castle
have been appointed as members of management and directors of the Company.

Universal  Syntropy  Corporation,  a  California  corporation  wholly  owned and
organized by the Company in fiscal 1999,  is managing the  commercialization  of
the IPR discussed above. Universal Syntropy is located in Alameda, California.

<PAGE>

Organization and Nature of Business

Note B - Basic  Earnings  (Loss) Per Share  Basic  earnings  (loss) per share of
common  stock  are  computed  using  the  weighted   average  number  of  shares
outstanding  during each period.  All share  information and per share data have
been  retroactively  restated for all periods presented to reflect reverse stock
splits.

ITEM 2.

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

Results of  Operations  for the three  month  period  ended  December  31,  1998
compared to same period ended December 31, 1997

         As a result of the  discontinuance of trading operations in the UK, the
Company had no sales revenues and no gross profits. For the same period in 1997,
the net sales were $28,477 with a gross profit of $9,733.

         In quarter ended  December 31, 1998, the Company  incurred  general and
administrative  expenses of $70,021 resulting in an operating loss of ($70,021).
For the same  period in 1997 the company  incurred  $248,662 of such costs which
resulted in an operating loss of ($238,662).

         The Company lost  ($.004) per share in the three month period  compared
to a loss of ($0.86) per share in the same period in 1997.

Results of Operations  for the six month period ended December 31, 1998 compared
to same period ended December 31, 1997

         As a result of the  discontinuance of trading operations in the UK, the
Company had no sales revenues and no gross profits. For the same period in 1997,
the net sales were $28,477 with a gross profit of $9,733.

         In six months ended December 31, 1998, the Company incurred general and
administrative   expenses  of  $133,905   resulting  in  an  operating  loss  of
($133,905).  For the same period in 1997 the Company  incurred  $248,395 of such
costs which resulted in an operating loss of ($238,662).

         The company lost ($.01) per share in the six month period compared to a
loss of ($0.86) per share in the same period in 1997.

Liquidity and Capital Resources


<PAGE>

         At period end,  the  Company had $0 cash  capital and current and total
assets of $20,247.  The Company had $1,748,850 in current  liabilities at period
end.  In light of the  deficit  ($1,728,603)  in current  assets  and  operating
capital,  the Company will be forced to either borrow  against or sell assets or
make private  placements of stock or debt in order to fund continued  operations
and its debt repayment program,  as above. No assurance exists as to the ability
to make private placements of stock or borrow funds.


<PAGE>


PART II
                                OTHER INFORMATION

Item 1.           Legal Proceedings - None.

Item 2.           Changes in securities - None.

Item 3.           Senior Securities Debt.

As a result of a dispute neither  interest nor capital  payments  required under
the terms of the Notes have been made which resulted in a technical default.  As
a result of an  agreement  in  December  1998  between the  Noteholders  and the
Company the default situation was waived until June 1999.

Terms of Conversion

The convertible  note holders have the option to convert the original  principal
amount of the notes ($376,500) into common stock at the lower of $2 per share or
75% of the average  closing  bid price of the stock for trading  five days prior
exercise.  Notwithstanding  the  foregoing,  if,  after the  effectiveness  of a
registration  statement or if an exemption is available from  registration,  the
closing bid price of the common stock reaches $4 per share for five  consecutive
trading days,  the Company has the option to require  conversion of up to 50% of
the  original  principal,  and if the closing  price  reaches $8 per share,  the
Company has the option of requiring conversion of all of the original principal.

Item 4. Submission of matters to a vote of security holders - None.

Item 5. Other information

        GS Telecom Limited formerly Teleconferencing Systems International, Inc.
        (the "Company") was incorporated in Colorado on December 19, 1983.


        Activities  of the Company  from June 30,  1995 until  November 15, 1997
        were  primarily  liquidation  of  operating  assets  and  settlement  of
        obligations  owed  creditors and employees  as previously  reported.  On
        November 15, 1997,  the Company  acquired an  Isle of Man Company,  also
        named GS  Telecom  Limited, (later changed to GST Limited  -  "GST")  by

<PAGE>


         issuance of a $150,000 convertible note payable.

         GST, the acquired  subsidiary,  had net  liabilities  of $544,268.  The
         $150,000 note payable was subsequently converted into 14,500,000 shares
         of common stock and issued to the acquired company stockholders.

         The  assets  of the GST  subsidiary,  also  included  Associated  Power
         Industries  Limited ("API"),  an UK designer and manufacturer of energy
         savings  systems.  GST owns 50% of API with an  option to  acquire  the
         remaining 50% ownership interest for three years.

         The  investment in API has been  accounted for using the equity method.
         Since  the Company  had  insufficient  Board  representation  or  other
         control attributes  and as  a result  of continued operating  losses by
         API, during fiscal 1998, management elected to write off its investment
         of $242,447.

         GST also has two UK wholly owned subsidiaries:

         Guardian  Smart  Systems  Limited  ("GSS")  and Total  Energy  Controls
         (Commercial)  Limited ("TECC").  As a result of continued losses in the
         subsidiaries,  the  management  elected  effective  June  30,  1998  to
         discontinue  operations.  Accordingly  the  Company has taken steps and
         adopted a plan to pay obligations  owed employees and others  resulting
         in an  estimated  loss from  discontinued  operations  of $140,099  and
         expensed  un-amortized  goodwill totaling $475,367 as shown in the June
         30, 1998 financials.

         At the date of this report there  remains the  obligation  to discharge
         the accounts payable and other payables of the three companies; GST and
         the two wholly owned  subsidiaries,  which will be done  through  funds
         raised by new share subscriptions.

         The shares of Guardian  Smart  Systems  Limited were sold for a nominal
         price to an  independent  third party and a promissory  note issued for
         the amount  of payables and other  obligations required to  be settled.
         This has  no effect  on the overall  debt position of  the  Company and
         funds are still required to be raised to meet these obligations.

         In  September  1998 the Company  agreed to acquire from  Masstech  Inc.
         against the future  issue of common  stock of the  Company,  all of its
         assets,   consisting  of  significant   Intellectual   Property  Rights
         resulting  from the  creation  of special  effects  in certain  special
         effects movie studios. In addition,  a 15% ownership was to be acquired
         by the Company in Manex Studios,  LLC, Manex Visual Effects, LLC, Manex
         Entertainment, LLC, and Mass Illusion, LLC.


<PAGE>


         These  acquisitions  are   subject  to  conditions  precedent  and  due
         diligence and had not closed at quarter end.

         Agreements with other parties for the acquisition of technology for the
         telecommunication  and e-commerce  business sectors are, at the date of
         this report, being finalized.

         Management  of the  Company  has  recently  redefined  the focus of the
         Company as a high-tech  development and marketing  company,  engaged in
         identifying,  developing,  and marketing innovative technology.  In the
         prior year, the Company had focused primarily on the development,  sale
         and  installation of ecological  energy saving  technology  through its
         subsidiaries and associate  companies.  However,  the new management of
         the Company  recognized  that its  development  program  lagged  behind
         competitors'  advances,  and  during the  fourth  quarter of 1998,  new
         management  commenced  a  restructuring  process  which  culminated  on
         January 6, 1999, at which time GS Telecom  embarked  upon  negotiations
         for the strategic  acquisition of targeted  technologies with a view to
         developing technology for the telecommunication and e-commerce business
         sectors.

         During the fourth  quarter of 1998 and the first  quarter of 1999,  the
         Company's  management  reorganized and effected  negotiations to make a
         number  of  acquisitions   subsequent  to  the  securement  of  private
         financing in order to increase the technology base,  acquire  high-tech
         products  with  short  term  sales  revenue  capability  and  create an
         infrastructure  capable of handling  the  unification  of the  acquired
         technologies toward the objective of operating a unique and proprietary
         high-tech  telecommunication  and  e-commerce  network on a  world-wide
         basis.

         The Company's long term objectives via are:

         Interests in API and the wholly-owned subsidiaries, GSS and TECC are to
         be sold and all legally incurred debt of the wholly owned  subsidiaries
         repaid.  This  will  facilitate  an  undiluted  focus  on the  business
         objective of the Company, which is the development of a proprietary and
         licensed telecommunication and e-commerce network;

         The facilitation of  an  underwriting of  the  Company's securities--to
         facilitate technology acquisition, growth and expansion;


         The investment in organizational  and expansion costs by the Company in
         its new investments.

         The  implementation of an  aggressive Internet  platform for the direct
         offering of the Company's future


<PAGE>


         products and services to end users to allow the current  infrastructure
         to evolve into a fully integrated direct access Internet network; and

         The issuance of territorial/industry sector exclusive and non-exclusive
         licenses for select Company technologies and products.

Item 6.  Exhibits and Reports on Form 8 - K

The following are filed as Exhibits to this Quarterly Report.  The numbers refer
to the Exhibit Table of item 601 of regulation S-K; None

         b)      Reports on Form 8-K filed during the three months
                 ended

                 December 31, 1998 (incorporated by reference):

                                      None

<PAGE>


                                   Signatures


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Dated: March 12, 1999


                                            GS Telecom Limited


                                            /s/ Steven Gillam
                                            ------------------------------------
                                            Dr. Steven Gillam, President