UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT 1 to
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): September 29, 2004
GLOBAL DIGITAL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-3392051
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
10970 Old Placerville Road
Suite 107, Sacramento, CA 95827
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: 916-669-3982
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ITEM 4. CHANGES IN CERTIFYING ACCOUNTANT
(a) On September 29, 2004, Global Digital's independent public
accountants resigned.
Rubin, Brown, Gornstein and Co. LLP's reports on Global Digital
and Pacific Comtel, Inc.'s financial statements for either of the past
two years, June 30, 2002 and June 30, 2003 did not contain an adverse
opinion or a disclaimer of opinion or was qualified or modified as to
uncertainty, audit scope or accounting principles.
During Global Digital's two most recent fiscal years, June 30, 2002 and
June 30, 2003, and the subsequent period through the date of
resignation, July 1, 2003 through September 29, 2004, there were no
disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope of procedure which
disagreement(s), if not resolved to the satisfaction of the former
accountant, would have caused it to make reference to the subject
matter of the disagreement(s) in connection with its report as
described in Item 304 (a)(1)(iv) of Regulation S-B.
(b) On September 29, 2004, the board of directors of Global Digital
engaged the accounting firm of Russell Bedford Stefanou Mirchandani LLP
as principal accountants of Global Digital for the fiscal year ended
June 30, 2004. Global Digital did not consult Russell Bedford
Stefanou Mirchandani, LLP regarding the application of accounting
principles to a specific completed or contemplated transaction, or the
type of audit opinion that might be rendered on Global Digital's
financial statements and neither written nor oral advice was provided
that was an important factor considered by Global Digital in reaching a
decision as to the accounting, auditing or financial reporting issue;
or any matter that was the subject of a disagreement or event
identified in response to paragraph (a) (1)(iv) of Item 304 of
Regulation S-B.
ITEM 5. OTHER EVENTS
Effective September 9, 2004, Chairman of the Board, Richard Sullivan,
along with board members Arthur Notterman and Garrett Sullivan resigned
as directors. There were no disagreements between these directors and
Global Digital on any matter relating to Global Digital's operations,
policies or practices.
On September 24, 2004, Daniel McKelvey and Marcos T. Santos were
appointed to the Board of Directors of Global Digital.
Daniel McKelvey has over 15 years of experience in corporate
finance, private equity and business consulting specializing in the
technology and capital markets industries. He is a co-founder and
manager member of Forte Capital Partners, a private equity firm based
in San Francisco and focused on the technology and telecommunications
industries. In 1996, Mr. McKelvey also co-founded and directed the
investment banking practice of Forte Capital, a New York-based asset
management firm with over $500 million in assets. Prior to that, he
spent eight years working for Accenture (formerly Andersen Consulting)
in their financial services practiced where he built equity trading and
risk management systems. At Accenture, he worked with Donaldson
Lufkin & Jenrette and Goldman Sachs in New York and The Capital Group
in Los Angeles. He received a bachelor of science in mathematics and
computer science with honors from the University of New Hampshire.
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Marcos T. Santos has been a managing member of Forte Capital
Partners from 1999 to present. From 1997-1998, Mr. Santos was the
manager of the San Francisco Consulting Group, which provided business
development, strategy and business integration projects at Fortune 500
companies. From 1991 -1997, Mr. Santos was a manager of Accenture.
Mr. Santos obtained a bachelor of science in electrical engineering
with an emphasis in computer science and a master of science in
management science from Stanford University.
Effective September 22, 2004, William J. Delgado, executive vice
president was appointed to the Board of Directors. Subsequently,
Jerome C. Artigliere, President, CEO, COO and Director tendered his
resignation from all positions within Global Digital. There were no
disagreements between Mr. Artigliere and Global Digital on any matter
relating to Global Digital's operations, policies or practices. Mr.
Delgado will assume all roles previously held by Mr. Artigliere.
Global Digital is significantly reducing its work force at its
operation in California to minimal crews. This action is necessary
because, until recently, Global Digital has been unsuccessful in
raising sufficient equity capital required to execute its strategic
business plan. The lack of capital combined with ongoing litigation
on a large bonded contract, has caused Global Digital to be in a tight
working capital position unable to meet its financial obligations.
Additionally, on September 13, 2004, Global Digital received notice
from Laurus Capital Management, LLC that Global Digital is in default
for non-payment of interest due under its borrowing agreement. On
September 27, 2004, Laurus Funds and Global Digital entered into a
standstill/forbearance agreement for a period of sixty days.
Mastec North America, Inc. v. Pacific Comtel, Inc., Superior Court of
California, County of Los Angeles, Case No. BC317244 - The complaint
was filed on June 17, 2004, seeking damages in the amount of
$1,500,000. Plaintiff Mastec North America, Inc. is seeking relief
for breach of contract. On July 25, 2004, Global Digital filed a
cross-complaint for breach of contract, reasonable value of
construction labor and materials, on account stated, enforcement of
stop notice, for breach of statutory duty, and on public works payment
bond. Global is seeking damages in the amount not less than
$1,517,292 plus statutory penalties, attorney's fees, and interest.
Global Digital has attempted to negotiate the contract to no avail.
While the contract is bonded, it has tied up approximately $1.1 million
owed to Global.
Global Digital has recently received commitments for bridge financing
of $404,000. Upon receipt of this financing and long-term equity
financing for Global Digital of at least $2,000,000 USD, Messrs.
Sullivan and Artigliere have agreed to return approximately 14,100,000
common shares back to Global Digital. Global Digital is currently in
negotiations for the long-term equity financing.
ITEM 7. FINANCIAL STATEMETNS AND EXHIBITS
Exhibit 10 Laurus Standstill Agreement dated September 27, 2004
Incorporated by reference to Form 8-K filed October
4, 2004
Exhibit 16 Letter from Rubin, Brown, Gornstein and Co. LLP
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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 hereunto duly authorized.
Date: October 8, 2004
Global Digital Solutions, Inc.
/s/William J. Delgado
By:-------------------------------
William J. Delgado
Chief Executive Officer