As filed with the Securities and Exchange Commission on June 25, 1998
Registration No. _________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TeleServices International Group Inc.
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(Exact name of Company as specified in its charter)
Florida 59-2773602
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
100 Second Avenue South, Suite 1000, St. Petersburg, Florida 33701
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(Address of Principal Executive Offices) (Zip Code)
TeleServices Stock Option Plan
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(Full title of the plan)
Robert P. Gordon, 100 Second Avenue South, Suite 1000,
St. Petersburg, Florida 33701
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(Name and address of agent for service)
(813) 895-4410
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate offering Amount of
to be registered registered per share price registration fee (1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.0001 Par Value (2) 8,000,000 $.25 $2,000,000.00 $590.00
===================================================================================================================
Totals 8,000,000 $2,000,000.00 $590.00
===================================================================================================================
</TABLE>
<PAGE>
(1) The fee with respect to these shares has been calculated pursuant to Rule
457(h)(1) and Rule 457(c) of Regulation C under the Securities Act of 1933,
as amended, and based upon the average of the bid and asked price per share
of the Company's common stock on a date within five (5) days prior to the
date of filing of this Registration Statement, as reported on the National
Association of Securities Dealers, Inc. Electronic Bulletin Board.
(2) To be issued, at the sole discretion of the Company, as direct shares, or
shares underlying options granted to and to be granted, under the
TeleServices Stock Option Plan (the "Plan").
<PAGE>
REGISTRATION OF ADDITIONAL SECURITIES
In accordance with General Instruction E of Form S-8, TeleServices
International Group Inc. (the "Registrant") is registering additional shares of
common stock pursuant to the TeleServices Stock Option Plan (the "Plan"). The
Registrant currently has an effective registration statement filed on Form S-8
relating to the Plan which registered securities of the same class as those
being registered herewith, File No. 333-52271, filed with the Securities and
Exchange Commission on May 8, 1998, and which prior registration statement
included a reoffer prospectus. The Registrant incorporates by reference into
this registration statement the contents of its earlier registration statement
on Form S-8 (Registration No. 333-52271); provided, however, that a revised
reoffer prospectus is being filed herewith, which supercedes and replaces the
earlier reoffer prospectus as of the date hereof.
The number of shares of common stock authorized to be issued under the
Plan is 20,000,000. The prior registration statement filed on Form S-8
(Registration No. 333-52271) registered an initial 12,000,000 shares authorized
to be issued under the Plan. This registration statement registers the remaining
8,000,000 shares authorized to be issued under the Plan.
Exhibits.
Exhibit Number Description
4.1 The Company's Articles of Incorporation, as
amended, which define the rights of holders of
the equity securities being registered.
(Incorporated by reference to Exhibit 3.5 to the
Company's Form 10-QSB for the quarter ended
March 31, 1997.)
4.2 The Company's Bylaws, as amended, which define
the rights of holders of the equity securities
being registered. (Incorporated by reference to
Exhibit 3.3 to the Company's Current Report on
Form 8-K dated October 17, 1996 and filed October
23, 1996.)
5.7 Opinion of Counsel, Futro & Trauernicht, LLC.
(Filed herewith.)
10.3 TeleServices Stock Option Plan. (Incorporated by
reference to Exhibit 10.3 to the Company's
Registration Statement of Form S-8, Registration
No. 333-52271, filed May 8, 1998.)
23.15 Consent of Schumacher & Associates, Inc.,
Certified Public Accountants. (Filed herewith.)
23.16 Consent of Futro & Trauernicht, LLC.
(Included in Exhibit 5.7.)
<PAGE>
TELESERVICES INTERNATIONAL GROUP INC.
UP TO 12,214,710 SHARES
COMMON STOCK, $.0001 PAR VALUE
Up to 11,694,710 shares of Common Stock may be reoffered and resold on a
continuous or delayed basis in the future by the Selling Security Holders,
each of whom are deemed or may be deemed (if unknown to the Company at the
date of this Prospectus) to be affiliates of the Company. See "Selling
Security Holders." The Company will not receive any of the proceeds from
the sale of shares by the Selling Security Holders. The Company is required
to file reports pursuant to Section 15(d) of the Securities Exchange Act of
1934. The Company's Common Stock is traded on the Over-the-Counter Bulletin
Board of the National Association of Securities Dealers, Inc. under the
trading symbol "TSIG." On June 23, 1998, the closing bid and asked prices
were $.25 and $.25 per share, respectively.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF
THE SECURITIES OFFERED HEREBY.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE
SHARES OFFERED BY THIS PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY THE SHARES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THE DATE OF THIS PROSPECTUS IS JUNE 25, 1998.
<PAGE>
AVAILABLE INFORMATION AND CERTAIN DEFINITIONS
All references herein to the "Company" or the "Registrant" include
TeleServices International Group Inc. and its subsidiaries. The Company is a
reporting company subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information (the "1934 Act Filings") with
the Securities and Exchange Commission (the "Commission"). The Company has filed
with the Securities and Exchange Commission, 450 5th Street, N.W., Washington,
D.C. 20549, a registration statement on Form S-8, of which this reoffer
prospectus is a part (herein, together with all amendments and exhibits thereto,
the "Registration Statement") under the Securities Act of 1933, as amended,
regarding the shares of the Company offered. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information,
exhibits, and undertakings contained in the Registration Statement. Statements
contained in this Prospectus concerning the provisions of documents are
necessarily summaries of such documents and each such statement is qualified in
its entirety by reference to the copy of the applicable document filed with the
Commission. For further information regarding the Company and the Common Stock
offered hereby, reference is hereby made to the Registration Statement and
exhibits thereto. Copies of the Registration Statement, including the exhibits
thereto, and the 1934 Act Filings, can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, Washington, D.C. 20549,
at prescribed rates. The Commission also maintains a web site on the World Wide
Web that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission,
including the Company, and the address is http://www.sec.gov.
This Prospectus constitutes a revised reoffer prospectus in connection
with the reoffer and resale of certain Control Securities (as defined in
Instruction C of Form S-8) issuable pursuant to the TeleServices Stock Option
Plan. This Prospectus supercedes and replaces the earlier reoffer prospectus
filed with a registration statement on Form S-8, Registration No. 333-52271,
filed on May 8, 1998.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will governed by the final
adjudication of such issue.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated into this reoffer prospectus
by reference and made a part hereof: (i) contents of the Company's Registration
Statement on Form S-8, being filed with the Securities and Exchange Commission
concurrently herewith, of which this reoffer prospectus is a part; (ii) the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1997, and
the consolidated financial statements and schedules of the Company included
therein, audited by Schumacher & Associates, Inc., Certified Public Accountants,
as set forth in their report with respect thereto; and (iii) all other reports
filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of
the fiscal year covered by the Form 10-KSB referred to above.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act and prior to
the filing of any post-effective amendment to the Registration Statement which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated in the
Registration Statement and this Prospectus by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained in the Registration Statement, in a supplement
to the Registration Statement or in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of the Registration
Statement and this reoffer prospectus to the extent that a statement contained
herein or in any subsequently filed supplement to the Registration Statement or
in any document that is subsequently incorporated by reference herein modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement and this reoffer prospectus.
PROSPECTUS
TABLE OF CONTENTS
AVAILABLE INFORMATION AND CERTAIN DEFINITIONS..................................2
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION...........................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................2
PROSPECTUS SUMMARY.............................................................4
RISK FACTORS...................................................................8
SELLING SECURITY HOLDERS......................................................11
PLAN OF DISTRIBUTION..........................................................12
DESCRIPTION OF SECURITIES TO BE REGISTERED....................................12
INTERESTS OF NAMED EXPERTS AND COUNSEL........................................12
<PAGE>
SUMMARY INFORMATION
The following summary information should be read in conjunction with,
and is qualified in its entirety by, the detailed information and financial
statements and related notes thereto appearing either elsewhere in this
Prospectus or included in the Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997, and any other reports filed pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Form 10-KSB, which are incorporated herein by reference. Unless otherwise
indicated, all references in this Prospectus to the "Company" refer to
TeleServices International Group Inc. and its subsidiaries.
THE COMPANY
Overview
The Registrant is an provider of global teleservices to companies
focused on selling products and services through toll-free numbers and the
Internet. Services offered by the Registrant include telephone sales/order
capturing, customer service and product support, assistance with billing and
other inquiries, as well as direct response advertising.
The Registrant's primary subsidiary, Visitors Services International
Corp. (formerly Visitors Services, Inc.) was formed under the laws of the State
of Florida in November 1992 as a teleservices company specializing in the travel
and tourism segment, providing automated hotel and airline reservation services
on an outsourced basis. VSI's customers include Convention and Visitors Bureaus
("CVB"), ski resorts, airlines, and golf schools. VSI provides a computerized
reservation system and incentive-motivated, multi-lingual destination counselors
who are accessible to leisure travelers via specific toll-free telephone lines
operating 24 hours a day, 365 days a year.
History of the Company
TeleServices International Group Inc. (formerly Visitors Services
International Corp. and Dynasty Capital Corporation) (the "Registrant", the
"Company" or "TSIG") was a development stage enterprise formed under the laws of
the State of Florida to evaluate, structure and complete a business combination
in the form of a merger with, or acquisition of, prospects consisting of private
companies, partnerships or sole proprietorships. The Registrant sold 2,500,000
units of $.0001 par value Common Stock ("Common Stock") at $.02 per unit, for
total proceeds of $50,000 in a public offering which closed on June 8, 1987. The
Company was formed for the purpose of seeking potential business opportunities
in the form of the acquisition of an existing business that has profit
potential.
Acquisition of Visitors Services International Corp.
(formerly Visitors Services, Inc.)
On September 26, 1996, Registrant executed an Agreement and Plan of
Reorganization ("Agreement") with Visitors Services International Corp.,
formerly Visitors Services, Inc. ("VSI"), and certain Stockholders of VSI,
pursuant to which a minimum of 80% of the issued and outstanding shares of VSI
<PAGE>
were to be exchanged on a one share for one share basis for shares of restricted
stock of the Registrant, after the Registrant effect a 14.4 to 1 reverse stock
split of the shares outstanding before the date of the Agreement from 10,801,000
shares down to 750,093 shares (in lieu of any fractional shares created as a
result of the reverse stock split, each holder of a fractional share was issued
one additional whole share). The Closing Date of the Agreement was September 27,
1996, when the Registrant's reverse stock split was effected and certain
Stockholders of VSI holding at least 80% of the outstanding shares of VSI
executed the Agreement. The "Exchange Offer" was extended to the remaining
shareholders of VSI, all of whom accept the offer. The Exchange Offer was made
in accordance with Rule 506 of Regulation D of the Securities Act of 1933, as
amended, or such other appropriate and available exemption(s). By virtue of the
reorganization, VSI became a subsidiary of the Registrant. The transactions
described in the Agreement are referred to as the "Reorganization."
Significant Developments During Fiscal 1997
A. Acquisition of Assets of International Reservation Services,
Limited ("IRSL"). The Registrant, through a subsidiary corporation, VSI,
acquired and took possession of all the assets of International Reservation
Services, Limited ("IRSL") on January 21, 1997, to utilize all such assets to
operate the former business of IRSL as the business of VSI. VSI acquired these
assets from IRSL as a result of a bankruptcy proceeding of IRSL.
IRSL filed a voluntary petition for relief under Chapter 11 of Title
11, USC, in the United States Bankruptcy Court - District of Connecticut, case
number 96-51396, on August 21, 1996. VSI was granted first priority lien on
IRSL's assets, by replacing U.S. Transportation Systems, Inc. ("USTS") as senior
lender to IRSL, when VSI paid to USTS the amount of $388,737.25, on January 20,
1997. Pursuant to Section 9-505 of the Uniform Commercial Code, VSI took
possession and title to all of IRSL's assets, free and clear of liens, claims
and encumbrances on January 21, 1997 in accordance with the Court's Order dated
January 17, 1997, which Order permitted VSI to act as a "Replacement Lender" in
the bankruptcy proceeding by paying the debts owed by IRSL to USTS and thereby
succeeding to all right, title, and interest of USTS in and to any and all
claims against IRSL and any and all collateral securing such claims and
succeeding to all the rights of USTS, including the right to take immediate
possession of all assets. VSI also paid $184,000 to the Connecticut Department
of Development ("DED") on January 20, 1997, to remove the DED's secured claim
lien on IRSL assets.
The funds paid by the Registrant in this acquisition were loaned to the
Registrant by Robert P. Gordon, who is the Chairman and a major shareholder of
the Registrant.
The assets of IRSL consist primarily of equipment, account receivables,
customer contracts and the rights to approximately one hundred "800" telephone
numbers. The Registrant intends to utilize all such assets to operate the former
business of IRSL as the business of VSI. The business, which began in 1992, is
as a destination database marketing service company, specializing in the
provision of a centralized nationwide lodging reservation service and other
travel related services. The business acts as a "transparent" service provider
appearing to customers calling on dedicated 800 telephone numbers as the
regional tourism agency, hospitality association, or commercial tourism
<PAGE>
organization that it has contracted with to provide the central reservation
service for. The business provides the booking service seven days a week,
twenty-four hours a day, and all reservation requests are responded to with live
agents. Revenues from the business are derived from a booking fee paid by the
lodging properties for completed stays. The business also books airline tickets
for travelers making lodging reservations, as well as auto rentals.
B. Acquisition and Disposition of GuaranTEE Time, Inc. ("GTT").
The Registrant acquired all of the outstanding capital stock of GuaranTEE Time,
Inc. ("GTT") on February 24, 1997, in exchange for restricted common stock of
the Registrant. Initially 100,000 shares of the Registrant were issued to
the selling shareholders of GTT in exchange for their 100% interest in GTT.
GTT was founded in 1995 with the idea of providing automated tee-time
scheduling for daily-fee golf courses and their customers. The strategy was to
provide the courses in a given area with a computerized tee-sheet and then
connect these courses via a local network that would allow golfers to schedule a
tee-time at any participating course by calling one centralized number.
The Registrant disposed of substantially all of the assets of GTT on
October 3, 1997, following a sale by GTT (as seller) to Guarantee Time
Acquisitions, Inc., an unaffiliated third-party (the "Buyer").
Consideration received by the Registrant and GTT in the transaction
consisted of the following: $30,000 in earnest money plus $436,012 in cash;
Buyer's promissory note in the amount of $150,000; Buyer's assumption of certain
payments aggregating $35,000; and Buyer's assumption of certain liabilities, up
to an aggregate of $433,000. The Registrant and GTT agreed not to compete with
the Buyer for a period of three years in the business of tee-time reservation
services.
In connection with the transaction, the Registrant granted to Buyer a
right to purchase 50,000 shares of restricted common stock of the Registrant, at
an exercise price of $1.00 per share, on or before September 30, 2000.
As part of the original acquisition agreement, the Registrant agreed
that up to an additional 500,000 shares of restricted common stock of the
Registrant may be issued to the selling shareholders of GTT over the next three
years if GTT's net income exceeds certain projections over that period of time.
As a result of the sale of assets, because the original selling shareholders of
GTT have been precluded from receiving additional shares, the Registrant is
currently negotiating settlement of this matter with the original selling
shareholders of GTT.
Recent Changes
Effective June 8, 1998, the Registrant acquired a 6% equity interest in
a privately-held company called Teleservices Holdings Corporation ("Holdings"),
in exchange for 1) the Registrant's waiver of any interest it may have had in
acquiring five companies which Holdings intends to acquire; and 2) the
Registrant's release of four persons from their obligations to the Registrant
under their respective employment and consulting contracts. Holdings also agreed
to change its corporate name to a name dissimilar from "teleservices." The
transaction was approved by the disinterested members of the Board of Directors
of the Registrant.
<PAGE>
The Registrant's interest consists of 600,000 shares of Series A
Preferred Stock of Holdings, which represents approximately a 6% interest in
Holdings on a fully-diluted basis. The shares are convertible into common stock,
and have a liquidation preference of $1.57 per share, or $942,000 in total.
As part of the transaction, certain individuals resigned from their
positions with the Registrant and its subsidiaries: Stephen G. McLean resigned
as a director and as Chief Executive Officer of the Registrant and its
subsidiaries; Raymond P. Wilson resigned as Chief Financial Officer of the
Registrant and its subsidiaries and as President and Chief Financial Officer of
the Registrant's subsidiary, Visitors Services International Corp.; Robert C.
Gust resigned as a consultant; and Kevin N. Blayne resigned as a consultant.
These individuals will join Holdings as employees and will receive, in the
aggregate, a minority equity interest in Holdings.
Robert P. Gordon, Chairman of the Registrant, will temporarily assume
the duties of Chief Executive Officer and Chief Financial Officer of the
Registrant and its subsidiaries until permanent replacements are named.
The following individuals were added to the management team:
Alyce A. Cucurullo, who has served as a management consultant to the
Company since April of 1998, will become the Company's Chief Operating Officer.
She has an established track record in the teleservices sector with experience
in Call Center Operations, Sales and Account Management, Information Systems,
Accounting and Finance, Human Resources and Purchasing and Facilities
Management. Previously, Ms. Cucurullo served as Executive Vice President, Chief
Operations Officer and Chief Financial Officer of IQI, Inc. from 1991-1997
(formerly, Edward Blank Associates, Inc., the fifth largest inbound/outbound
teleservices agency in the country). While at IQI, Ms. Cucurullo oversaw the day
to day operations, while creating and executing an accelerated growth strategy
that included the evaluation of potential acquisitions, the re-engineering of
call center technology, the construction and staffing of new call centers, and
concluded with all activities associated with the sale of the company. She also
served as the primary point of contact to several of IQI's larger accounts,
including the largest account, AT&T.
Catherine I. Krell, who has served as a marketing consultant to the
Company since August 1996, was named Vice President of Marketing Communications.
Ms. Krell has extensive marketing experience in the tourism, hospitality and
consumer products industries. Her accomplishments include the repositioning and
marketing of Los Angeles to increase tourism, the repositioning of Hilton
Hotels, and new product introductions for Warner Lambert, Scott Paper Products,
and Hills Bros. Coffee. Ms. Krell has held senior management positions with
major advertising agencies in New York and Los Angeles, McCann Erickson, Inc.
and J. Walter Thompson. She was named one of twelve Outstanding Women in
Advertising in the United State by Adweek magazine. Ms. Krell headed her own
marketing consulting company, Marketing Directions, Inc.
Timothy J. Heidemann was named Vice President of Call Center
Operations. He brings with him over 15 years of experience in teleservices call
center and direct mail/direct marketing channel management. Mr. Heidemann's
track record of producing optimal performance from call centers is a direct
result of his ability to combine operational expertise and strong motivational
<PAGE>
and leadership skills. Mr. Heidemann consulted to AT&T's largest inbound
clients, including Continental Airlines, Amoco Motor Club, Mead Data and
Thompson Vacations. He was responsible for managing the center review process
for these clients and presenting and implementing the resulting recommendations
relative to workforce management and overall call center performance and
profitability. Mr. Heidemann's extensive experience includes telemarketing
sales, customer service, channel and vendor management, as well as "hands-on"
management of AT&T's largest consumer acquisition telemarketing program from
1994-1996.
Jeannie L. Lewin was named Vice President Sales. Ms. Lewin has an
extensive hotel sales background with over eleven year of experience in the
hospitality industry. Ms. Lewin joined VSI as Regional Director of Sales for
the West Coast in November 1996. She has worked with nationally recognized hotel
chains such as Hyatt Hotels & Resorts, Marriott and Hilton Hotels. Ms. Lewin has
spent five years with Hyatt and most recently held the position of Director of
Sales & Marketing at the Hyatt Regency Alicante in Anahaim, CA. Ms. Lewin also
served as Director of Sales & Marketing at the Hyatt Newporter in Newport Beach,
CA and as Associate Director of Sales for the Hyatt Regency Hilton Head, in
South Carolina. Ms. Lewin has worked closely with many Convention & Visitors
Bureaus and Tourism Development Councils on marketing committees and advertising
campaigns. She is a member of Professional Conference Management Association
(PCMA), Meeting Planner International (MPI), and the American Society of
Association Executives (ASAE).
Richard E. Olson was named Vice President Account Management/Customer
Service. Mr. Olson had joined the wholly owned subsidiary, VSI, in July 1995 as
Vice President of Sales. Prior to that, Mr. Olson served as Regional Vice
President for the International Hotel Academy, responsible for account
development and revenue growth for The Grand Wailea Resort, Hotel and Spa, Maui,
and The Biltmore Hotel, Los Angeles. In this role, Mr. Olson developed sales
strategies, systems and managed the sales campaign. Mr. Olson's diverse
experience includes ten years of service with Hyatt Hotels Corporation. Most
recently, he served as Director of National Accounts in the Washington, D.C.
Hyatt National Sales Office where he was the top revenue producer. In this
capacity, his responsibilities included Convention and Group Sales for all 86
domestic Hyatt properties.
THE OFFERING
<TABLE>
<CAPTION>
<S> <C>
Common Stock offered by the Selling Security Holders Up to 12,214,710 Shares
Shares of Common Stock Outstanding as of June 24, 1998 43,963,030
Use of Proceeds The Company will not receive any
proceeds from the sale of shares by the
Selling Security Holders
Over-the-Counter Bulletin Board Symbol TSIG
</TABLE>
<PAGE>
RISK FACTORS
THE COMPANY'S SECURITIES INVOLVE A HIGH DEGREE OF RISK, INCLUDING, BUT NOT
LIMITED TO, THE FACTORS DESCRIBED BELOW. AN INVESTMENT IN THE COMPANY'S
SECURITIES SHOULD BE MADE ONLY BY PERSONS WHO CAN AFFORD A LOSS OF THEIR ENTIRE
INVESTMENT. INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS
INHERENT IN AND AFFECTING THE BUSINESS OF THE COMPANY.
No Assurance of Profitability; Highly Speculative Investment. The
Company has been operating at a loss since inception, and there is little upon
which to base an assumption that the Company's plans will either materialize or
prove successful, and, accordingly, there can be no assurance of whether or when
operations will become profitable.
History of Operating Losses; Working Capital Deficit; Financial
Instability. For the fiscal year ended December 31, 1997, the Company sustained
a net loss of approximately $18,042,742. These losses are expected to continue
for a presently undetermined time. As of December 31, 1997, the Company had
negative stockholders' equity of $5,193,925, an accumulated deficit of
$26,066,383 and a working capital deficit of $5,597,256. As of the date hereof,
the Company has earned limited operating revenues. Various factors affecting the
Company's operations may raise substantial doubt as to the Company's ability to
continue as a going concern. There can be no assurance that the Company will be
able to continue as a going concern or achieve sustainable revenues or
profitable operations.
Additional Funding Required. The Company's business will require
substantial investment on a continuing basis to finance capital expenditures and
related expenses in pursuit of its business plan. Furthermore, there is no
assurance that the Company will be able to generate additional capital on a
timely basis and on satisfactory terms and conditions to meet its future
financing needs or to expand into additional markets. In connection with the
further development of the Company's business, the Company anticipates that it
may need to raise additional funds through subsequent private placements which
will be exempt from registration. Any such additional private placements will
not require prior shareholder approval, and may be equity offerings of Common
Stock or Preferred Stock convertible into Common Stock, or debt offerings of
notes or debentures convertible into Common Stock. Any subsequent private
placement of equity securities (i.e., stock) or debt securities convertible into
Common Stock would have the effect of immediately diluting the interest of the
then existing shareholders of the Company. Furthermore, the Company may also
grant registration rights to investors in subsequent private placements, if any.
Acquisition of Compact Connection, Inc. The Company has acquired the
business and the assets of Compact Connection, Inc. (an unaffiliated Nevada
corporation), through the Company's wholly-owned subsidiary, Compact Connection,
Inc. (a Delaware Corporation) ("CCI"), effective at the close of business on
April 30, 1998, pursuant to an Asset Purchase Agreement dated April 23, 1998.
Payment of the purchase price of 6,000,000 shares of Common Stock of the Company
is contingent on satisfactory completion of a due diligence review by the
Company and an independent audit of the financial statements of the acquired
business. The acquired assets consist primarily of equipment, distributor
contracts, tradenames and trademarks, and goodwill. The business, involves the
direct-music marketing of compact disks and cassettes, through the use of a
music card, similar to a credit card or long-distance calling card, that allows
purchasers of the card the ability to buy a specific number of compact disks or
<PAGE>
cassettes from over 200,000 titles, including the music industry's latest top
releases, at "below-retail" prices. Orders are taken over a toll-free number and
are delivered via mail. Music cards can be purchased directly from the business
or from authorized distributors. In the event that the Company's due diligence
review or the audited financial statements prove unsatisfactory to the Company,
the Company can "unwind" the transaction. There can be no assurance that the
Company's due diligence review or the audited financial statements prove
satisfactory; and even if the transaction is not "unwound," there can be no
assurance that the operations of CCI will be profitable or result in any
benefits to the Company.
Technological Obsolescence. The computer software field is
characterized by rapid technological developments and advances, particularly in
the travel industry. Although the Company believes that its computer system is
expected to be technically and economically competitive and it is anticipated
that it will not become obsolete for the foreseeable future, it is possible that
intervening development of new technology and/or new systems could render all or
part of the Company's systems obsolete.
Current Litigation. The Company and its subsidiaries are currently
involved in several litigation matters. The Form 10-KSB for the year ended
December 31, 1997, and the Form 10-QSB for the quarter ended March 31, 1998,
both incorporated herein by reference, provide summaries of these matters. There
can be no assurance that the outcome of any litigation will be favorable to the
Company or its subsidiaries.
Non-Exclusivity and Potential Conflicts of Interests of Officers and
Directors. Two of the Company's Officers and Directors, Robert P. Gordon and
Paul W. Henry, are engaged in other activities and endeavors, and thus may
devote less than full time to the Company's activities. Because the Officers and
Directors may engage in operations independent of the Company, their activities
may conflict with those of the Company. In dealing with any potential conflicts
which may arise as a result of their outside activities, the Officers and
Directors will attempt to conduct themselves in accordance with their fiduciary
obligations to the Company.
Reliance on Existing Management; Lack of "Key-Person" Life Insurance.
The Company's operations are presently dependent on the existing management. The
loss to the Company of one or more of its existing executive officers could have
a material adverse effect on the Company's business and results of operations.
The Company does not currently maintain "key person" life insurance on the life
of any of its officers, directors, employees or consultants.
Competition. The Company may be competing with other corporations which
have greater assets, financial resources, research and marketing capabilities.
No assurance can be given that the Company will be successful in meeting the
competition or in developing or marketing its products and services.
Control by Officers, Directors and Principal Stockholders. The
Company's current officers and directors beneficially own a substantial portion
of the outstanding Common Stock. Because the Company's Articles of Incorporation
do not provide for cumulative voting, the holders of such a substantial interest
may be in a position to elect all of the directors if they choose to do so.
Accordingly, these persons, individually and as a group, would be able to
effectively control the Company and direct its affairs and business, including
<PAGE>
any determination with respect to the acquisition or disposition of assets by
the Company, future issuances of Common Stock or other securities by the
Company, declaration of dividends on the Common Stock, and the election of
directors. Such concentration of ownership may also have the effect of delaying,
deferring, or preventing a change in control of the Company.
Indemnification and Limitation of Directors' Liability. The Company's
Bylaws provide that the Company shall indemnify in the manner and to the extent
permitted by law, any person (or that person's testator or intestate successor)
made or threatened to be made a party to any action or proceeding, whether
domestic or foreign, civil or criminal, judicial or administrative, or federal
or state, by reason of the fact that the person was a director or officer of the
Company or served any other corporation in any capacity at the request of the
Company. Further, the Company has entered into agreements with several officers
and directors of the Company and its subsidiaries, and may enter into agreements
with additional officers and directors, to indemnify and hold such persons
harmless, to the maximum extent permitted by law in the event any claims or
legal actions are brought against such person arising out of his acts or
decisions done or made in the authorized scope of such person's employment or
position with the Company.
The General Corporation Law of Florida eliminates the personal
liability of its directors to the Company or its stockholders for monetary
damages for breach of fiduciary duty of loyalty and care as a director, unless:
(a) the director breached or failed to perform his duties as a director; and (b)
the directors breach of, or failure to perform, those duties constitutes: (i) a
violation of criminal law, unless the director had reasonable cause to believe
his conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (ii) a transaction from which the director derived an improper person
benefit, either directly or indirectly; (iii) a circumstance under which a
director votes for or assents to an unlawful distribution; (iv) in a proceeding
by or in the right of the Company to procure a judgment in its favor or in the
right of a shareholder, conscious disregard for the best interests of the
Company, or willful misconduct; or (v) in a proceeding by or in the right of
someone other than the Company or a shareholder with, recklessness or an act of
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety or
property.
The Company has been advised that it is the position of the Securities
and Exchange Commission that insofar as the foregoing provisions may be invoked
to disclaim liability for damages arising under the Act, that such provisions
are against public policy as expressed in the Act and are therefore
unenforceable.
Preferred Stock. The Company's Articles of Incorporation authorize the
Company to issue 10,000,000 shares of Preferred Stock, $.001 par value. None are
issued as of the date of this Reoffer Prospectus. The Preferred Stock may be
divided into and issued in one or more series as may be determined by resolution
of the Board of Directors. The Board of Directors is authorized, without any
further action by the shareholders, to determine dividend rates, liquidation
preferences, redemption provisions, sinking fund provisions, conversion rights,
voting rights, and other rights, preferences, privileges and restrictions of any
wholly unissued series of Preferred Stock and the number of shares constituting
<PAGE>
any such series. In addition, such Preferred Stock could have other rights,
including voting and economic rights senior to the Common Stock so that the
issuance of such stock could adversely affect the market value of the Common
Stock. The creation of one or more series of Preferred Stock also may have the
effect of delaying, deferring or preventing a change in control of the Company
without any action by shareholders.
Limited Public Market for Common Stock. The Company believes there has
been only limited trading in the Company's Common Stock. There is no assurance
that the Common Stock will continue to be publicly tradable or that any
liquidity exists for the Company's shareholders.
No Dividends on Common Stock and None Anticipated. The payment by the
Company of cash dividends, if any, to holders of Common Stock in the future
rests within the discretion of its Board of Directors and will depend, among
other things, upon the Company's earnings, its capital requirements and its
financial condition, as well as other relevant factors. The Company has not paid
or declared any cash dividends upon its Common Stock since its inception and by
reason of its present financial status and its contemplated future financial
requirements does not contemplate or anticipate making any cash distributions
upon its Common Stock in the foreseeable future.
Future Issuances of Common Stock Pursuant to Non-Statutory Stock Option
Plans, Non-Plan Options, Warrants and Contingent Stock Issuances. The Company
has in effect three separate non-qualified stock option plans which, combined,
initially reserved for issuance up to 40,000,000 shares of the Company's Common
Stock, for the benefit of officers, directors, employees and consultants of the
Company and its subsidiaries. As of the date of this Reoffer Prospectus,
approximately 18,888,449 shares of Common Stock remain reserved for issuance and
approximately 12,689,193 of these shares are currently under option. The Company
also currently has outstanding non-plan options, warrants and other contingent
commitments to issue an aggregate of approximately 21,460,693 shares of Common
Stock (this amount includes 6,000,000 shares proposed to be issued in connection
with the acquisition of Compact Connection, Inc. - see the above risk factor
captioned "Acquisition of Compact Connection, Inc."). Additional securities or
options to acquire securities of the Company may be issued or granted at any
time by the Board of Directors, in most cases without requiring shareholder
approval. The issuance of additional shares will have the effect of diluting the
percentage ownership of the then existing shareholders.
Future Sales of Common Stock by Management and Others. Future sales of
Common Stock by management and others may be made pursuant to and in compliance
with the provisions of Rule 144 of the Securities Act of 1933, as amended. In
general, under Rule 144, a person who has satisfied a one-year holding period
may, under certain circumstances, sell within any three-month period a number of
shares which does not exceed the greater of one percent of the then outstanding
shares of Common Stock or (if qualified) the average weekly trading volume in
shares during the four calendar weeks immediately prior to such sale. Rule 144
also permits under certain circumstances, the sale of shares without any
quantity or other limitation by a person who is not an affiliate of the Company
and who has satisfied a two-year holding period. In addition, management and
others have acquired and may acquire in the future shares of Common Stock
registered on Form S-8, which shares may be sold, subject to compliance with
state securities laws, by non-affiliates without restriction, and by affiliates
<PAGE>
(including management) either (i) pursuant to Rule 144 but without regard to the
holding period or (ii) pursuant to an effective reoffer prospectus filed for the
Form S-8. Future sales of Common Stock may have an adverse effect on the then
prevailing market price, if any, of the Common Stock and adversely affect the
Company's ability to obtain future financing in the capital markets as well as
create a potential market overhang.
SELLING SECURITY HOLDERS
The following table sets forth all persons eligible to resell and the
amounts of securities available to be resold, if known at the date of this
Prospectus, whether or not they have a present intent to do so. Reoffer and
resales of the following securities may be made on a continuous or delayed basis
in the future. The shares of Common Stock being registered hereunder for reoffer
and resale are defined as control securities and have been or may be acquired by
the Selling Security Holders, each of whom are deemed or may be deemed to be
affiliates of the Company, pursuant to the TeleServices Stock Option Plan.
<TABLE>
<CAPTION>
Number and
Name and address of Relationship with Number of Shares Number of Shares Percentage of Shares
Selling Stockholder Company within past beneficially owned which may be beneficially owned
three years before the offering offered for resale after offering
- ------------------- ------------------- ------------------- ------------------ --------------------
<S> <C> <C> <C> <C>
Robert P. Gordon (1) 12,399,969 7,520,000 (2) 4,879,969
Suite 1000 (8.69%)
100 Second Ave. South
St. Petersburg, FL 33701
Persons unknown to the -- -- 4,694,710 --
Company (3)
- ---------------------
</TABLE>
(1) Robert P. Gordon, 47, has served as the Chairman and a Director of the
Registrant since September 26, 1996. Mr. Gordon founded the Registrant's
subsidiary, VSI, in 1992.
(2) Mr. Gordon individually owns 2,929,352 shares of the Company's Common
Stock, Elizabeth K. Gordon, his wife, individually owns 1,409,857, and
they jointly own 698,750 shares. Also included are 362,010 shares owned
by Heaven International, Inc., which is controlled by Robert P. Gordon.
On December 8, 1997, Mr. Gordon was granted a total of 7,000,000 options
to purchase common stock under the Plan, exercisable at $0.15 per share,
expiring on December 31, 2002. The shares underlying these options were
<PAGE>
registered for reoffer and resale pursuant to a reoffer prospectus filed
in conjunction with a Form S-8 Registration Statement (Registration
No. 333-52271) filed on May 8, 1998, which registered 12,000,000
shares issuable under the Plan. All such options have been exercised
and 6,480,000 underlying shares have been sold pursuant to the earlier
reoffer prospectus by Mr. Gordon. The remaining 520,000 shares are
included in this reoffer prospectus for possible reoffer and resale.
On April 20, 1998, Mr. Gordon was granted an additional 7,000,000 options
to purchase common stock under the Plan, exercisable at $0.15 per share,
expiring on April 30, 2003. The shares underlying these additional
options are being registered hereunder for possible reoffer and resale,
which may be made on a continuing or delayed basis in the future. At the
date of this Prospectus, Mr. Gordon has not exercised any of these
additional options.
(3) As the names of any other Selling Security Holders and the amounts of
securities to be reoffered become known, the Registrant will supplement
this Prospectus with such information.
PLAN OF DISTRIBUTION
Up to 11,694,710 of the shares of Common Stock offered hereby may be
sold by the Selling Security Holders, and may be offered privately or through
the selling efforts of brokers or dealers unknown to the Registrant.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The Company's Articles of Incorporation, as amended, included in
Exhibit 3.5 to the Company's Form 10-QSB for the quarter ended March 31, 1997,
and the Company's Bylaws, as amended, included in Exhibit 3.3 to the Company's
Current Report on Form 8-K dated October 17, 1996, define the rights of holders
of the Common Stock being registered. The securities to be registered hereunder
for reoffer and resale by the Selling Security Holders are of the same class.
The Selling Security Holders have or will acquire the shares of Common Stock
pursuant to one of the Company's employee's and consultant's benefit plans,
entitled the "TeleServices Stock Option Plan," as may be amended from time to
time (the "Plan"). The shares to be issued pursuant to the Plan and the shares
underlying any grant of option thereunder have been registered with the
Securities and Exchange Commission under a Registration Statement on Form S-8
(Registration No. 333-52271) filed on May 8, 1998, which registered 12,000,000
shares for issuance under the Plan, which contained a reoffer prospectus, and a
subsequent Registration Statement on Form S-8 which registered an additional
8,000,000 shares for issuance under the Plan, of which this revised reoffer
prospectus is a part.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Futro & Trauernicht, LLC, Attorneys and Counselors at Law (the "Firm"),
has acted as counsel to the Company and has given its opinion as to the validity
of the securities registered with the Registration Statement hereunder, which
opinion appears at Exhibit 5.7 thereto. The Firm, or members of the Firm, may in
the future be issued shares or options to purchase shares pursuant to the Plan,
which shares of Common Stock may be restricted or registered pursuant to the
Registration Statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement or amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of St. Petersburg, State of Florida, on the 25th
day of June, 1998.
TELESERVICES INTERNATIONAL GROUP INC.
By: /s/ Robert P. Gordon
---------------------------------
Robert P. Gordon, Chairman
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
By: /s/ Robert P. Gordon
--------------------------------
Robert P. Gordon, Chairman,
Interim Chief Financial
Officer (principal accounting
officer), Director
Dated: June 25, 1998
By: /s/ Paul W. Henry
--------------------------------
Paul W. Henry, Secretary,
Treasurer, Director
Dated: June 25, 1998
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
4.1 The Company's Articles of Incorporation, as
amended, which define the rights of holders of
the equity securities being registered.
(Incorporated by reference to Exhibit 3.5 to the
Company's Form 10-QSB for the quarter ended
March 31, 1997.)
4.2 The Company's Bylaws, as amended, which define
the rights of holders of the equity securities
being registered. (Incorporated by reference to
Exhibit 3.3 to the Company's Current Report on
Form 8-K dated October 17, 1996 and filed October
23, 1996.)
5.7 Opinion of Counsel, Futro & Trauernicht, LLC.
(Filed herewith.)
10.3 TeleServices Stock Option Plan. (Incorporated by
reference to Exhibit 10.3 to the Company's
Registration Statement of Form S-8, Registration
No. 333-52271, filed May 8, 1998.)
23.15 Consent of Schumacher & Associates, Inc.,
Certified Public Accountants. (Filed herewith.)
23.16 Consent of Futro & Trauernicht, LLC. (Included in
Exhibit 5.7.)
Exhibit 5.7
FUTRO & TRAUERNICHT LLC
Attorneys and Counselors at Law
MCI TOWER
707 SEVENTEENTH STREET - 29TH FLOOR
DENVER, COLORADO 80202
TELEPHONE (303) 295-3360 [email protected] FACSIMILE (303) 295-1563
June 25, 1998
U.S. Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington D.C. 20549
Re: TeleServices International Group Inc.
Form S-8 Registration Statement
OPINION OF COUNSEL NO. 98-176.1
Ladies and Gentlemen:
OPINION OF COUNSEL
We have acted as counsel to TeleServices International Group Inc. (the
"Company") in connection with the preparation and filing of a Registration
Statement on Form S-8, which pursuant to General Instruction C of Form S-8,
contains a prospectus prepared in accordance with the requirements of Part I of
Form S-3 relating to the possible reoffering of the shares registered thereunder
by affiliates or control persons of the Company (collectively, the "Registration
Statement"). The Registration Statement covers the registration under the
Securities Act of 1933, as amended, of 8,000,000 shares of the Company's common
stock, $.0001 par value per share (the "Shares"), pursuant to the Company's
employee and consultant benefit plan entitled the "TeleServices Stock Option
Plan," restated and adopted by the Board of Directors of the Company on April
20, 1998 (the "Plan"). As such, we have examined the Registration Statement, the
Company's Articles of Incorporation and Bylaws, as amended, and minutes of
meetings of its Board of Directors.
Based upon the foregoing, and assuming that the Shares will be issued
as set forth in the Plan and Registration Statement, at a time when effective,
and that the Company will fully comply with all applicable securities laws
involved under the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated pursuant to
said Acts, and in those states or foreign jurisdictions in which the Shares may
be sold, we are of the opinion that, upon proper and legal issuance of the
Shares according the Registration Statement and receipt of the consideration to
be paid for the Shares, the Shares will be validly issued, fully paid and
nonassessable shares of Common Stock of the Company. This opinion does not cover
any matters related to any re-offer or re-sale of the Shares by any Plan
Beneficiaries, once properly and legally issued pursuant to the Plan as
described in the Registration Statement.
<PAGE>
Futro & Trauernicht LLC
Attorneys and Counselors at Law
U.S. Securities and Exchange Commission
June 25, 1998
Page 2
This opinion is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our prior written consent. This
opinion is based on our knowledge of the law and facts as of the date hereof.
This opinion does not address or relate to any specific state securities laws.
We assume no duty to communicate with the Company in respect to any matter which
comes to our attention hereafter.
CONSENT
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the prospectus which is made a
part of the Registration Statement.
Sincerely,
FUTRO & TRAUERNICHT LLC
/s/ Peter G. Futro
Peter G. Futro
Exhibit 23.15
SCHUMACHER & ASSOCIATES, INC.
Certified Public Accountants
12835 E. Arapahoe Road, Tower II, Suite 110
Englewood, CO 80112
(303) 792-2466 FAX (303) 792-2467
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
TeleServices International Group Inc. on Form S-8 of our report dated April 10,
1998, on our audits of the consolidated balance sheet of TeleServices
International Group Inc. as of December 31, 1997, and the related statements of
operations, changes in stockholders' equity (deficit), and cash flows for the
year then ended, for the three month period ended December 31, 1996 and for the
year ended September 30, 1996, which report is included in the Annual Report on
Form 10-KSB for the year ended December 31, 1997.
/s/ Schumacher & Associates, Inc.
- ---------------------------------
SCHUMACHER & ASSOCIATES, INC.
Englewood, CO 80112
June 24, 1998
