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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 1, 1997
SmarTalk TeleServices, Inc.
(Exact name of registrant as specified in its charter)
California
(State or jurisdiction of incorporation)
0-21579 95-4502740
(Commission File Number) (IRS Employer Identification No.)
1640 South Sepulveda Boulevard, Suite 500, Los Angeles, CA 90025
(Address of principal executive offices) (Zip Code)
(310) 444-8800
(Registrant's Telephone Number)
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Item 2. Acquisition
On June 1, 1997, SmarTalk TeleServices, Inc., a California corporation
(the "Company"), acquired GTI Telecom, Inc., a Florida corporation ("GTI"),
pursuant to a Stock Purchase Agreement (the "Agreement"), dated as of May 31,
1997, by and among the Company, GTI, Waterton Investment Group I, LLC, a
Delaware limited liability company (the "Preferred Stockholder"), and William R.
Harger, an individual (the "Common Stockholder"), pursuant to which GTI became a
wholly-owned subsidiary of the Company.
Pursuant to the Agreement, the Company purchased all outstanding common
and preferred shares of GTI. In consideration for each outstanding share of
common stock, par value $0.001 per share, the stockholders received $45,580
principal amount of SmarTalk's 10% Subordinated Notes due 2001, (the
"Subordinated Notes"), and 4,437.6 shares of SmarTalk common stock, no par value
("SmarTalk Common Stock"). In consideration for each outstanding share of
preferred stock, par value $0.001, the stockholders received $1,060 principal
amount of Subordinated Notes, and 103.2 shares of SmarTalk Common Stock. The
Agreement is filed as Exhibit 2.1 hereto.
The purchase price for the stock was determined based upon arms-length
negotiations between the Company, on the one hand, and the Common Stockholder
and Preferred Stockholder, on the other hand. Prior to the Agreement, there was
no material relationship between GTI, the Common Stockholder, or the Preferred
Stockholder and the Company, any affiliates of the Company, any director or
officer of the Company, or any associate of any such director or officer.
The Company funded the Agreement by issuing approximately 2.58 million
shares of SmarTalk Common Stock and an aggregate principal amount of $26.5
million in Subordinated Notes to the stockholders of GTI.
The Company is engaged in a similar business as GTI, and intends to use
GTI's assets in a substantially similar manner as used by GTI prior to the
agreement, and operate GTI as a wholly-owned subsidiary of the Company.
In addition, on June 2, 1997, the Company issued a press release
announcing the consummation of the transactions contemplated by the Agreement,
which press release is filed as Exhibit 99.1 hereto.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
The required financial statements will be filed no later than
August 15, 1997.
(b) Pro Forma Financial Information
The required pro forma financial information will be filed no
later than August 15, 1997.
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(c) Exhibits
2.1 Stock Purchase Agreement, dated as of May 31, 1997,
by and among SmarTalk TeleServices, Inc., GTI
Telecom, Inc., Waterton Investment Group I, LLC, and
William R. Harger (without schedules)/1/.
4.1 Form of SmarTalk TeleServices, Inc. 10% Subordinated
Note Due 2001.
4.2 Registration Rights Agreement.
99.1 Press Release, dated June 2, 1997, of SmarTalk
TeleServices, Inc.
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/1/ SmarTalk shall supplementally furnish a copy of any omitted schedule to
the Securities and Exchange Commission upon request.
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SIGNATURE
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.
SMARTALK TELESERVICES, INC.
(Registrant)
By: /s/ ERICH L. SPANGENBERG
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Erich L. Spangenberg
President and Chief
Operating Officer
Date: June 12, 1997
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EXHIBIT INDEX
Number Subject Matter
2.1 Stock Purchase Agreement, dated as of May 31, 1997, by and among
SmarTalk TeleServices, Inc., GTI Telecom, Inc., Waterton Investment
Group I, LLC, and William R. Harger (without schedules)/1/.
4.1 Form of SmarTalk TeleServices, Inc. 10% Subordinated Note Due 2001.
4.2 Registration Rights Agreement.
99.1 Press release, dated June 2, 1997, of SmarTalk TeleServices, Inc.
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/1/ SmarTalk shall supplementally furnish a copy of any omitted schedule to
the Securities and Exchange Commission upon request.
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