<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (earliest event reported): January 21, 1997
TELESERVICES INTERNATIONAL GROUP INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 33-11059-A 59-2773602
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Second Avenue South, Suite 1000, St. Petersburg, Florida 33701
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 895-4410
---------------------------
VISITORS SERVICES INTERNATIONAL CORP.
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ACQUISITION OF ASSETS - On February 5, 1997, the Registrant reported
on Form 8-K that it acquired the assets of International Reservation Services,
Limited ("IRSL") on January 21, 1997, and undertook to provide the required
financial statements by filing an amendment to the Form 8-K within 60 days
after the filing of the Form 8-K. This Form 8-K/A-1 is being filed to provide
the accompanying required financial statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired. The required
financial statements of IRSL are being provided herewith, commencing on page F1,
which follows the signature page.
(b) Pro Forma Financial Information. The required pro forma
financial information is being provided herewith.
(c) Exhibits. There are no exhibits required to be furnished in
accordance with the provisions of Item 601 of Regulation S-B.
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.
TELESERVICES INTERNATIONAL GROUP INC.
By: /s/ Robert P. Gordon
---------------------------------------
Robert P. Gordon, Chairman
Date: April 7, 1997
<PAGE> 3
INTERNATIONAL RESERVATION SERVICES, LTD.
FINANCIAL STATEMENTS
WITH
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
December 31, 1995 and 1996
<TABLE>
<CAPTION>
Page
----
<S> <C>
Financial Statements:
Report of Independent Certified Public
Accountants F-2
Balance Sheet F-3
Statements of Operations F-4
Statement of Changes in Stockholders' (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
</TABLE>
F-1
<PAGE> 4
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
International Reservation Services, Ltd.
We have audited the accompanying balance sheets of International Reservation
Services, Ltd. as of December 31, 1996, and the related statements of
operations, stockholders' (deficit) and cash flows for the years ended December
31, 1996. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Reservation
Services, Ltd. as of December 31, 1996 and the results of its operations,
changes in its stockholders' (deficit) and its cash flows for the years ended
December 31, 1995 and 1996, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will not continue as a going concern. As described in Note 2, the
Company has suffered recurring losses from operations and has a net capital
deficiency and has filed for protection under the U.S. Federal Bankruptcy Code
and subsequent to December 31, 1996 in substance disposed of the operating
business and principally all of its assets through a financing arrangement that
raises substantial doubts about its ability to continue as a going concern.
The financial statements do not include specific adjustments that might result
from the outcome of this uncertainty but no assets are carried in the financial
statements at amounts in excess of what is estimated to net realizable value.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road, Tower II, Suite 110
Englewood, CO 80112
February 21, 1997
F-2
<PAGE> 5
INTERNATIONAL RESERVATION SERVICES, LTD.
BALANCE SHEET
December 31, 1996
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash $ 3,412
Accounts receivable, trade, net of allowance
for doubtful accounts of $20,117 81,624
Accounts receivable, other, net of allowance
for doubtful accounts of $89,000 (Note 8) -
Other 1,563
---------
Total Current Assets 86,599
Furniture and office equipment, net of accumulated
depreciation of $326,668 78,932
Other assets 19,366
---------
Total Assets $ 184,897
=========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Liabilities:
Accounts payable and accrued expenses, post
petition 334,634
Accounts payable and accrued expenses, pre-
petition 2,218,553
Notes payable and accrued interest (Note 3) 4,217,013
Deferred compensation payable (Note 5) 817,866
Subscribed common stock subject to potential
recision (Note 6) 375,000
----------
Total Current Liabilities 7,963,066
----------
Commitments (Notes 2,3,4,5,6,7 and 8) -
Stockholders' (Deficit):
Preferred stock, no par value,
5,000 shares authorized, none issued
and outstanding -
Common stock, non-voting, no par value,
2,000 shares authorized, none issued
and outstanding -
Common Stock voting, no par value,
8,000 shares authorized, 500 shares
issued and outstanding 250,000
Accumulated (Deficit) (8,028,169)
----------
Total Stockholders' (Deficit) (7,778,169)
----------
Total Liabilities and Stockholders' (Deficit) $ 184,897
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 6
INTERNATIONAL RESERVATION SERVICES, LTD.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Year
ended ended
December December
31, 1995 31, 1996
----------- -----------
<S> <C> <C>
Revenue:
Sales $ 465,972 $ 577,677
----------- -----------
Operating Expenses:
Payroll and payroll taxes 1,287,513 1,421,800
Advertising 132,777 179,940
Telephone 246,157 367,357
Commissions 23,430 117,985
Rent 111,966 109,629
Depreciation 136,244 136,897
Other 741,425 554,766
----------- ----------
Total Operating Expenses 2,679,512 2,888,374
----------- ----------
Net (Loss) Before Other (Expense) (2,213,540) (2,310,697)
Other (Expense):
Interest Expense (222,117) (366,091)
----------- -----------
Net (Loss) $(2,435,657) $(2,676,788)
=========== ===========
Per Share $ (4,871) $ (5,353)
=========== ===========
Weighted Average Shares Outstanding 500 500
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 7
INTERNATIONAL RESERVATION SERVICES, LTD.
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT),
From December 31, 1994 through December 31, 1996
<TABLE>
<CAPTION>
Common Stock
------------------------- Accumulated
Shares Amount Deficit Total
---------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 500 $ 250,000 $ (2,915,724) $(2,665,724)
(Loss) for the year ended December
31, 1995 - - (2,676,788) (2,676,788)
---------- ----------- ------------ -----------
Balance at December 31, 1995 500 250,000 (5,592,512) (5,342,512)
(Loss) for the year ended December
31, 1996 - - (2,435,657) (2,435,657)
---------- ----------- ------------ -----------
Balance at December 31, 1996 500 250,000 (8,028,169) (7,778,169)
========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 8
INTERNATIONAL RESERVATION SERVICES, LTD.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended Year ended
December December
31, 1995 31, 1996
------------ -----------
<S> <C> <C>
Operating Activities:
Net (Loss) $(2,435,657) $(2,676,788)
Adjustments to reconcile net (loss)
to net cash provided by operating
activities:
Depreciation 136,244 136,897
Increase in accounts payable and
accrued expenses 991,671 606,989
(Increase) decrease in accounts
receivable (87,130) 58,250
Increase in deferred compensation
payable 235,157 30,920
Other (65,841) (14,446)
---------- -----------
Net Cash (Used in) Operating
Activities (1,225,556) (1,858,178)
----------- -----------
Investing Activities:
(Acquisition of) furniture
and equipment (155,000) (9,791)
------------ -----------
Net Cash (Used in) Investing Activities (155,000) (9,791)
------------ -----------
Financing Activities:
Increase in outstanding checks in
excess of balance by bank 12,082 -
Subscribed common stock subject
to potential recision 375,000 -
Proceeds from notes payable 964,258 1,871,381
------------ -----------
Net Cash Provided by Financing
Activities 1,351,340 1,871,381
------------ -----------
Increase (Decrease) in Cash (29,216) 3,412
Cash at Beginning of Year 29,216 -
------------ -----------
Cash at End of Year $ - $ 3,412
============ ===========
Interest Paid $ 259,440 $ 132,002
============ ===========
Income Taxes Paid $ - $ -
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 9
INTERNATIONAL RESERVATION SERVICES, LTD.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1996
(1) Summary of Accounting Policies
This summary of significant accounting policies of International
Reservation Services, Ltd, (Company) is presented to assist in
understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management
who is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of
the financial statements.
(a) Organization and Operations
The Company was incorporated under the laws of the State of
Connecticut. The Company provides reservation services,
principally consisting of hotel and airline reservations for
various customers traveling principally throughout the U.S.A.
The Company receives commissions directly from the various
hotels, other housing facilities and airlines.
(b) Income Taxes
The Company has approximately $7,000,000 of net operating loss
carryovers expiring in years through 2012. As of December 31,
1996 the Company has total deferred tax assets of
approximately $1,400,000 due to operating loss carry forwards.
However, because of the uncertainty of potential realization
of these deferred tax assets, the Company has provided a
valuation allowance for the entire $1,400,000. Thus, no tax
assets have been recorded in the financial statements as of
December 31, 1996. A change in the stock ownership of the
Company could result in limitations on the Company's ability
to utilize the loss carryovers.
(c) Concentration of Credit Risks
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade
accounts receivable.
The Company grants credit to various businesses principally in
the U.S.A. The potential for severe financial impact can
result from negative effects of economic conditions within the
market or geographic area
F-7
<PAGE> 10
INTERNATIONAL RESERVATION SERVICES, LTD.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
December 31, 1995 and 1996
(1) Summary of Accounting Policies, Continued
and within a specific industry. Since the Company's business
is principally in one industry, this concentration of
operations results in an associated risk and uncertainty.
(d) Per Share Information
The per share information is computed based upon the weighted
average shares outstanding.
(e) Furniture, Office Equipment and Customer Database
The Company carries its investment in furniture and office
equipment at cost, net of accumulated depreciation. Repairs
and maintenance costs are expensed. Depreciation is provided
on a straight-line basis over estimated lives ranging from
three to five years.
(f) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared assuming the
Company will not continue as a going concern. The Company has
sustained substantial continuing operating losses and has a net
capital deficiency. The Company has filed for protection under
Chapter 11 of the U.S. Federal Bankruptcy Code. The Company, during
January 1997, transferred control of its business and certain assets
to another company in exchange for a refinancing arrangement whereby
approximately $600,000 of debt was refinanced with the Company's
accounts receivable, certain equipment and its business as collateral.
The new lender foreclosed on the assets and has taken over operations
of the business. The Company that has taken over
F-8
<PAGE> 11
INTERNATIONAL RESERVATION SERVICES, LTD.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
December 31, 1995 and 1996
(2) Basis of Presentation - Going Concern, Continued
operating the business did not assume any liabilities of the Company
other that the amounts loaned to the Company.
In view of these matters, the Company has no foreseeable means of
repayment of other creditor liabilities. Assets are carried at
historical costs which approximate estimated net realizable value.
Liabilities are carried at total balances owed.
(3) Notes Payable
At December 31, 1996 the Company had approximately $4,217,013 of notes
and advances payable including accrued interest at various rates
averaging approximately 10% per annum. These balances are payable to
various individuals and entities, some of which are related parties.
The majority of the Company's assets are collateral for various notes
payable. All of the obligations are in default and have been included
as current liabilities.
(4) Leases
(a) Operating Lease
The Company's office is located in rented facilities. Under
the terms of the lease, the Company pays approximately $8,333
per month with the lease expiring in November, 2000. The
Company is in default on payments related to this lease.
Minimum future payments on the office lease are summarized as
follows:
<TABLE>
<S> <C> <C>
Year ending December 31, 1997 99,996
" " 1998 99,996
" " 1999 99,996
" " 2000 91,663
--------
$391,651
========
</TABLE>
(b) Capital Lease
The Company leases certain telephone equipment under a lease
with monthly payments of approximately $4,710 per month
expiring in 1998. The Company was in default on this lease as
of December 31, 1996. Subsequent to December 31, 1996 the
leasing company repossessed the equipment and sold it to the
new entity taking control of the business in exchange for a
two year note of $60,000 which bears interest at 9% per annum.
F-9
<PAGE> 12
INTERNATIONAL RESERVATION SERVICES, LTD.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
December 31, 1995 and 1996
(5) Deferred Compensation
As of December 31, 1996 the Company had recorded a liability for
deferred compensation totalling approximately $817,866. This balance
relates to unpaid compensation payable to the Company's President.
This compensation agreement has not been formally approved by the
Company's board of directors.
(6) Subscribed Common Stock Subject to Potential Recision
As of December 31, 1996 the Company had collected $375,000 for certain
common stock subscriptions. This potential issuance may be subject to
recision due to certain legal provisions. Due to the contingency, the
balance has been recorded as a liability in the accompanying financial
statements
(7) Payroll Tax Liability Delinquencies
As of December 31, 1996 the Company was delinquent on payment of
payroll taxes. Balances owed have been included with accounts payable
and other accrued expenses.
(8) Accounts Receivable, other
As of December 31, 1996 the Company had an account receivable related
to certain services performed totalling approximately $89,000. Due to
the uncertainty as to the possible collectiblity of this balance, an
allowance for doubtful accounts has been provided for the total
balance.
F-10
<PAGE> 13
INDEX TO PRO FORMA FINANCIAL STATEMENTS
INTERNATIONAL RESERVATION SERVICES, LTD. (IRSL)
TELESERVICES INTERNATIONAL GROUP INC. (TSIG)
PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED)
Pro Forma Financial Statements:
Balance Sheet P-12
Statements of Operations P-13
Notes to Pro Forma Financial Statements P-14
P - 11
<PAGE> 14
INTERNATIONAL RESERVATION SERVICES, LTD. (IRSL)
TELESERVICES INTERNATIONAL GROUP INC. (TSIG)
PRO FORMA BALANCE SHEET
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
IRSL TSIG Pro Forma Pro Forma
December 31, 1996 September 30, 1996 Adjustments Combined
----------------- ------------------ ---------------- ----------
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 3,412 $ 51,546 $ (3,412) $ 51,546
Cash restricted - 150,000 150,000
Accounts receivable 81,624 266,494 348,118
Other 1,563 89,122 (1) (1,563) 89,122
---------------- ----------------- --------------- ----------
Total Current Assets 86,599 557,162 (4,975) 638,786
Goodwill - - (1) 539,444 539,444
Property and equipment, net of accumulated
depreciation 78,932 1,219,592 1,298,524
Other 19,366 384,207 (1) (19,366) 384,207
---------------- ----------------- ---------------- ----------
Total Assets $ 184,897 $ 2,160,961 $ 515,103 $2,860,961
================ ================= ================ ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses $ 2,553,187 $ 1,347,629 $(1) (2,553,187) $1,347,629
Notes and leases payable, current 4,217,013 615,795 (1) (3,517,013) 1,315,795
Deferred compensation payable 817,866 - (1) (817,866) -
Other 375,000 - (1) (375,000) -
---------------- ----------------- ---------------- ----------
Total Current Liabilities 7,963,066 1,963,424 (7,263,066) 2,663,424
Notes and leases payable, net of
current - 381,616 - 381,616
---------------- ----------------- ---------------- ----------
Total Liabilities 7,963,066 2,345,040 (7,263,066) 3,045,040
---------------- ----------------- ---------------- ----------
Stockholders' (Deficit)
Common stock 250,000 1,597 (1) (250,000) 1,597
Additional paid-in capital - 5,676,066 5,676,066
Accumulated (Deficit) (8,028,169) (5,861,742) (1) 8,028,169 (5,861,742)
---------------- ----------------- ---------------- ----------
Total Stockholders' (Deficit) (7,778,169) (184,079) 7,778,169 (184,079)
---------------- ----------------- ---------------- ----------
Total Liabilities and Stockholders' (Deficit) $ 184,897 $ 2,160,961 $ 515,103 $2,860,961
================ ================= ================ ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
P - 12
<PAGE> 15
INTERNATIONAL RESERVATION SERVICES, LTD. (IRSL)
TELESERVICES INTERNATIONAL GROUP INC. (TSIG)
PRO FORMA STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
(IRSL) (TSIG)
Year Ended Year Ended
December September Pro Forma Pro Forma
31, 1996 30, 1996 Adjustments Combined
--------------- ------------- -------------- --------------
REVENUE:
<S> <C> <C> <C> <C>
Sales $ 577,677 $ 791,949 $ $ 1,369,626
-------------- ------------- -------------- --------------
OPERATING EXPENSES:
Salaries and payroll taxes 1,421,800 2,227,669 3,649,469
Depreciation 136,897 192,836 329,733
Amortization of goodwill (2) 35,963 35,963
Other operating expenses 1,329,677 2,144,589 3,474,266
-------------- ------------- -------------- --------------
Total Operating Expenses 2,888,374 4,565,094 35,963 7,489,431
-------------- ------------- -------------- --------------
Net Operating (Loss) (2,310,697) (3,773,145) (35,963) (6,119,805)
Other Income (Expenses), Net (366,091) (85,972) (452,063)
-------------- ------------- -------------- ---------------
Net (Loss) $ (2,676,788) $ (3,859,117) $ (35,963) $ (6,571,868)
============== ============= ============== ===============
Net (Loss) per Common Share $ (.37)
==============
Weighted Number of Common Shares Outstanding 17,673,901
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
P - 13
<PAGE> 16
INTERNATIONAL RESERVATION SERVICES, LTD. (IRSL)
TELESERVICES INTERNATIONAL GROUP INC. (TSIG)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(1) General
During January, 1997 TSIG entered into a business combination
agreement with IRSL whereby according to the terms of the agreement,
certain assets and the business of IRSL were used as collateral for a
loan whereby in substance, control of IRSL was transferred to
TSIG. IRSL filed in 1996 for protection under Chapter 11 of the
U.S. Bankruptcy Code. The loan has been accounted for as a purchase
due to the substance of the transaction. Ownership of the assets is
being transferred to TSIG through foreclosure on the loan.
(2) Pro Forma Information
The pro forma gives effect to the acquisition by TSIG effective in
January, 1997.
(2) Pro Forma Adjustments
(1) This entry gives effect to eliminating assets not acquired and
liabilities not assumed. This entry reflects the approximate
cost of $700,000 including estimated acquisition expenses.
(2) This entry records the effect of amortizing the goodwill on a
straight-line basis over a fifteen year period.
P - 14
