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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 16, 1999
TELTRAN INTERNATIONAL GROUP, LTD.
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(Exact name of Registrant as specified in charter)
Delaware 0-25641 11-3172507
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(State or Other (Commission File No.) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
One Penn Plaza, Suite 4632, New York, New York 10119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 643-1283
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Item 7 of the current report on Form 8-K, filed August 16, 1999 is hereby
amended to read in its entirety as follows:
Item 7. Financial Statements, Pro-Forma Information and Exhibits
(a) Financial Statements of Business Acquired
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(i) Auditors Report
(ii) Profit and Loss Account for the period of May 13, 1999
to May 31, 1999
(iii) Balance Sheet at May 31, 1999
(iv) Notes to Financial Statements
(b) Pro Forma Financial Information
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(i) Unaudited Pro Forma Consolidated Statement of
Operations for the six months ended June 30, 1999
(ii) Notes to Unaudited Pro Forma Consolidated Statement of
Operations
(c) Exhibits
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10.9 (i) Exchange Agreement dated as of July 15, 1999 between
Barclay Brydon Limited and Teltran International Group,
Ltd., as amended by the Closing Memorandum dated
August 16, 1999.
(ii) Memorandum of Closing between and among Barclay Brydon
Limited and Teltran International Group, Ltd., dated
August 16, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 19, 1999
TELTRAN INTERNATIONAL GROUP, LTD
(Registrant)
By: /s/ Byron Lerner
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Byron Lerner, President
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CHANNELNET LIMITED
AUDITORS' REPORT
AUDITORS' REPORT TO THE MEMBERS OF
CHANNELNET LIMITED
We have audited the financial statements on pages 5-8 which have been
prepared under the accounting policies set out on page 7.
RESPECTIVE RESPONSIBLITIES OF DIRECTORS AND AUDITORS
As described on page 3, the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material missatatement, whether caused by fraud or error or other
irregularity. In forming our opinion we also evaluated the overall adequacy of
the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the
state of the company's affairs as at 31.5.1999 and of its profit for the period
13th May 1999 to 31st May 1999 and have been properly prepared in accordance
with the provisions of the Companies Act 1985 applicable to small companies.
David Nugent & Co.
Chartered Certified Accountants
& Registered Auditors
MANCHESTER
19th August 1999
F-1
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CHANNELNET LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD 13TH MAY 1999 TO 31ST MAY 1999
<TABLE>
<CAPTION>
1999
NOTE pounds
---- ---------
<S> <C> <C>
Turnover 2 4,678
Net operating expenses
Administrative expenses (3,155)
---------
Profit on ordinary activities
before taxation 1,523
Taxation 4 (152)
---------
Profit on ordinary activities
after taxation 1,371
retained for the 13th May 1999 to 31st May 1999 9
---------
---------
</TABLE>
Movements in reserves are shown in note 9.
None of the company's activities were acquired or discontinued during the above
financial period.
There are no recognised gains and losses in 1999 other than the profit for the
period 13th May 1999 to 31st May 1999.
F-2
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CHANNELNET LIMITED
BALANCE SHEET
AT 31.5.1999
<TABLE>
<CAPTION>
1999
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NOTE pounds pounds
---- ------- -------
<S> <C> <C> <C>
Current assets
Debtors 5 5,497
-------
5,497
Creditors: amounts falling due
within one year 6 (4,125)
-------
Net current assets 1,372
-------
Total assets less current liabilities 1,372
-------
-------
Capital and reserves
Called up share capital 8 1
Profit and loss account 9 1,371
-------
Total shareholders' funds 7 1,372
-------
-------
</TABLE>
These accounts have been prepared in accordance with:
(a) The special provisions of Part VII of the Companies Act 1985: and
(b) The Financial Reporting Standard for Smaller Entities.
The accounts were approved by the board of Directors on 19th August 1999.
Director
F-3
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CHANNELNET LIMITED
NOTES ON FINANCIAL STATEMENTS
31.5.1999
1. ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared under the historical cost
accounting rules.
The company has taken advantage of the exemption from preparing a cash flow
statement conferred by Financial Reporting Standard No. 1 on the grounds that it
is entitled to the exemptions available in Section 246 to 247 of the Companies
Act 1985 for small companies.
Deferred taxation
Deferred taxation is provided on the liability method in respect of the
taxation effect of all timing differences to the extent that tax liabilities are
likely to crystallise in the foreseeable future.
2. TURNOVER
Turnover represents the amount derived from the provision of goods and
services which fall within the company's ordinary activities stated net of value
added tax.
In the opinion of the directors, none of the turnover of the company is
attributable to geographical markets outside the UK. (1999 nil)
3. OPERATING PROFIT
<TABLE>
<CAPTION>
1999
POUNDS
-----
<S> <C>
Operating profit is stated after charging
Auditors' remuneration............................................................ 250
-----
-----
</TABLE>
4. TAXATION
<TABLE>
<CAPTION>
1999
POUNDS
-----
<S> <C>
Corporation tax on profit on ordinary activities at 10%........................... 152
-----
-----
</TABLE>
5. DEBTORS
<TABLE>
<CAPTION>
1999
POUNDS
-----
<S> <C>
Amounts falling due within one year
Other debtors..................................................................... 5,497
-----
5,497
-----
-----
</TABLE>
6. CREDITORS: amounts falling due within one year
<TABLE>
<CAPTION>
1999
POUNDS
-----
<S> <C>
Other creditors................................................................... 4,125
-----
4,125
-----
-----
</TABLE>
F-4
<PAGE>
7. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
1999
POUNDS
-----
<S> <C>
Profit for the financial period 13th May 1999 to 31st May 1999.................... 1,371
New share capital subscribed...................................................... 1
-----
Net addition to shareholders' funds............................................... 1,372
Opening shareholders' funds....................................................... --
-----
Closing shareholders' funds....................................................... 1,372
-----
-----
</TABLE>
8. CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
1999
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NUMBER OF
SHARES POUNDS
--------- -----
<S> <C> <C>
Authorised.......................................................... 1,000 1,000
----- -----
----- -----
Allotted called up and fully paid
Ordinary Shares of pounds 1 each.................................... 1 1
----- -----
----- -----
</TABLE>
9. PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
1999
POUNDS
-----
<S> <C>
Retained profit for the period 13th May 1999 to 31st May 1999..................... 1,371
-----
-----
</TABLE>
F-5
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TELTRAN INTERNATIONAL GROUP, LTD. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------ -----------------------
TELTRAN CHANNEL NET ADJUSTMENT COMBINED
--------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Sales...................................................... $ 182,280 $ 357,899 $ -- $ 540,179
Miscellaneous.............................................. 1,457 1,457
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183,737 357,899 -- 541,636
Cost of Sales:
Purchases.................................................. 146,968 230,174 377,142
--------- --------- ------ ---------
Gross profit................................................. 36,769 127,725 -- 164,494
--------- --------- ------ ---------
Expenses:
Salaries................................................... 240,587 -- -- 240,587
Outside services........................................... 40,170 -- -- 40,170
Professional fees.......................................... 72,789 -- -- 72,789
Fees--other................................................ 70,039 -- -- 70,039
Payroll taxes.............................................. 10,213 -- -- 10,213
Leasing expense............................................ 4,277 -- -- 4,277
Travel..................................................... 24,379 -- -- 24,379
Insurance.................................................. 19,131 -- -- 19,131
Rent....................................................... 61,495 -- -- 61,495
Office expense............................................. 4,206 -- -- 4,206
Miscellaneous.............................................. 6,150 4,648 -- 10,798
Telephone.................................................. 11,724 -- -- 11,724
Contributions.............................................. 1,200 -- -- 1,200
Amortization expense....................................... 1,851 -- (389)(a) 1,462
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Total expenses.......................................... 568,211 4,648 (389) 572,470
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Income (loss) from operations................................ (531,442) 123,077 389 (407,976)
Interest expense........................................ 36,753 -- -- 36,753
--------- --------- ------ ---------
Income (loss) before provision for income taxes.............. (568,195) 123,077 389 (444,729)
Provision for income taxes................................... 780 -- -- 780
--------- --------- ------ ---------
Net income (loss)............................................ $(568,975) $ 123,077 $ 389 $(445,509)
--------- --------- ------ ---------
--------- --------- ------ ---------
</TABLE>
F-6
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TELTRAN INTERNATIONAL GROUP, LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENT OF OPERATIONS
The unaudited pro forma consolidated financial statement of operations reflects
historical information which includes the operations of Teltran and Channel Net,
Ltd. In a transaction effective June 1, 1999, Teltran issued 94,500 shares of
its common stock to acquire 100% of Channel Net, Ltd. Since the transaction was
effected within the quarter ended June 30, 1999, the balance sheet of Teltran
includes actual historical financial information of Channel Net, Ltd. and only a
pro forma statement of operations is required.
(a) The pro forma adjustment which gives effect to the acquisition in
the unaudited pro forma consolidated statement of operations is the
amortization of the excess of purchase consideration over net tangible
assets acquired on a straight-line basis over 40 years.
F-7
