UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): May 4, 2007
GLOBETEL
COMMUNICATIONS CORP.
(Exact
name of registrant as specified in its charter)
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Delaware
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0-23532
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88-0292161
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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101
NE 3rd
Ave., Suite 1500, Fort Lauderdale, FL
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33301
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(Address
of principal executive offices)
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(Zip
Code)
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| Registrant’s telephone number,
including area code: |
(954) 332-3759 |
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(Former
name or former address, if changed since
last report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item 4.02
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Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report
or
Completed Interim Review.
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On
May 4,
2007, the Board of Directors of GlobeTel Communications Corp. (the "Company"),
in consultation with its outside accounting consultant, determined that the
Company will restate its financial statements for the years ended 2004 and
2005,
as reported on Form 10-K and for the interim periods in fiscal 2005 and the
first two fiscal quarters of 2006 for which the Company filed reports on Form
10-Q.
The
Company reviewed its previously filed financials and determined that it
misapplied EITF Issue 99-19 “Reporting Revenue Gross as a Principal versus Net
as an Agent” (“EITF 99-19”) as well as EITF Issue 98-03 “Determining Whether a
Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business”
(“EITF 98-3”), Statement of Financial Accounting Standards No. 2, “Accounting
for Research and Development Costs” (SFAS 2) and Statement of Financial
Accounting Standards No. 141 “Business Combinations” (SFAS 141). The Company
estimates $120 million of revenues will be restated between 3rd
Qtr 2004
to 2nd
Qtr
2006. The Company believes this adjustment will result in decreasing the revenue
and cost of sales by the same number which will result in no change to its
Gross
Margin or its Net Losses. The Company should have recorded only the net revenue
from certain transaction from its wholesale telecommunications subsidiary
Centerline
Communications LLC
(“Centerline”). Further, it
is
anticipated that certain of the revenue attributed to Centerline will be
restated.
The
Company also estimates $9.9 million of intangible assets will be written off.
The charge would be taken to Retained Earnings, increasing the accumulated
deficit and reducing shareholders’ equity as well as reducing its total assets.
The amounts that the Company allocated to intangible assets in the purchase
transactions should have been charged to expense when the respective purchase
transactions occurred.
Accordingly,
the Company's prior financial statements for such periods should no longer
be
relied upon. The Company has not discussed this issue with its independent
auditors.
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.
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GlobeTel
Communications Corp. |
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(Registrant)
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| Date: June
29, 2007 |
By: |
/s/ Peter
Khoury |
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Peter
Khoury, CEO |