<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to ____________
Commission file number: 33-11059-A
TELESERVICES INTERNET GROUP INC.
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(Exact name of small business issuer as specified in it charter)
<TABLE>
<CAPTION>
FLORIDA 59-2773602
-------------------------------------------------------------- -------------------------------------------------------
<S> <C>
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
100 SECOND AVENUE SOUTH, SUITE 1000, ST. PETERSBURG, FLORIDA 33701
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(Address of principal executive offices)
(727) 895-4410
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(issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of November 17, 2000, of the
issuer's Common Stock, $.0001 par value, there were 78,868,556 shares
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE> 2
TELESERVICES INTERNET GROUP INC.
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited) F-1
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Statement of Changes in Stockholders' Equity F-4 - F-5
Consolidated Statements of Cash Flows F-6
Notes to Consolidated Financial Statements F-7 - F-16
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 2
PART II. OTHER INFORMATION 5
SIGNATURE PAGE 8
</TABLE>
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
TELESERVICES INTERNET GROUP INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 2000
F-1
<PAGE> 4
TELESERVICES INTERNET GROUP INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------ -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 878,452 $ 246,638
Cash, restricted 90,000 --
Prepaid expenses 245,909 45,000
Other current assets 30,733 --
--------------- -----------------
Total Current Assets 1,245,094 291,638
Related Party Receivables:
Officer advances, net 117,476 --
Note receivable, Reliant 679,092 --
Note receivable, Chairman/CEO 510,000 --
Equipment and leasehold improvements,
net of accumulated depreciation 720,198 86,667
Goodwill, less accumulated amortization 5,957,264 --
Capitalized software development costs 263,136 --
Other assets 6,948 --
--------------- -----------------
Total Assets $ 9,499,208 $ 378,305
=============== =================
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses $ 3,398,597 $ 26,250
Loans payable, Officer -- 438,802
Loans payable, The Affinity Group 157,437 --
Notes payable, current portion 249,209 --
Convertible debentures 2,668,138 --
--------------- -----------------
Total Current Liabilities 6,473,381 465,052
Long-term liabilities:
Notes payable, less current portion 14,600 --
Minority interest 665,707 --
--------------- -----------------
Total Liabilities 7,153,688 465,052
--------------- -----------------
Stockholders' equity (deficit):
Preferred stock, $2.00 stated value
10,000,000 shares authorized,
none issued and outstanding -- --
Common stock $.0001 par value, 300,000,000 shares authorized,
76,918,542 and 32,292,791 shares issued and outstanding 7,691 3,229
Stock proceeds receivable (700,000) --
Accumulated deficit (5,815,778) (433,412)
Additional paid-in capital 8,942,377 343,436
Deferred compensation (88,770) --
--------------- -----------------
Total Stockholders' Equity (deficit) 2,345,520 (86,747)
--------------- -----------------
Total Liabilities and Stockholders' Equity $ 9,499,208 $ 378,305
=============== =================
</TABLE>
The accompanying notes are an integral part of the Financial Statements
F-2
<PAGE> 5
TELESERVICES INTERNET GROUP INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Period from inception
September 30, September 30, (May 1, 1999) through
2000 1999 2000 1999 September 30, 2000
------------ ------------ ------------ ------------ ---------------------
<S> <C> <C> <C> <C> <C>
Total revenues $ 22,531 $ -- $ 22,531 $ -- $ 22,531
------------ ------------ ------------ ------------ ------------
Operating Expenses:
Selling, general and administrative 983,060 147,283 2,013,643 251,932 2,434,517
Depreciation and amortization 212,481 -- 240,431 -- 253,764
Outside advisory services 169,974 -- 3,197,755 -- 3,197,755
------------ ------------ ------------ ------------ ------------
Total Operating Expenses 1,365,515 147,283 5,451,829 251,932 5,886,036
------------ ------------ ------------ ------------ ------------
Net loss from operations (1,342,984) (147,283) (5,429,298) (251,932) (5,863,505)
Other income (expenses):
Interest income 36,264 -- 75,278 -- 75,722
Interest (expense) (28,886) -- (28,886) -- (29,106)
Other income 383 -- 540 -- 1,111
------------ ------------ ------------ ------------ ------------
Net loss $ (1,335,223) $ (147,283) $ (5,382,366) $ (251,932) $ (5,815,778)
============ ============ ============ ============ ============
Net loss per share: $ (0.03) $ (0.01) $ (0.14) $ (0.01)
Weighted average shares outstanding 50,775,491 32,153,131 41,108,362 32,153,131
</TABLE>
The accompanying notes are an integral part of the Financial Statements.
F-3
<PAGE> 6
TELESERVICES INTERNET GROUP INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Total
Period from inception (May 1, 1999) Common Paid-in Deferred Common Stock Accumulated Stockholders'
through September 30, 2000 Shares Stock Capital Compensation Receivable Deficit Equity
----------- ----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Initial Capitalization 32,069,153 $ 3,207 $ 6,458 $ -- $ -- $ -- $ 9,665
Private placement proceeds 223,638 22 336,978 -- -- -- 337,000
Net loss -- -- -- -- -- (433,412) (433,412)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1999 32,292,791 3,229 343,436 -- -- (433,412) (86,747)
Private placement proceeds at approx.
$1.507 per share 3,640,919 364 5,486,136 -- -- -- 5,486,500
Private placement proceeds at approx.
$1.808 per share 147,322 15 266,385 -- -- -- 266,400
Issuance of common stock as private
placement offering costs 336,778 34 (34) -- -- -- --
Issuance of common stock for financial
advisory services 1,646,433 165 2,977,045 -- -- -- 2,977,210
Issuance of common stock to employees 34,840 3 62,997 -- -- -- 63,000
Below market stock options issued -- -- 382,000 (102,900) -- -- 279,100
Sale of common stock at approx.
$1.808 per share 46,453 5 83,995 -- -- -- 84,000
</TABLE>
The accompanying notes are an integral part of the Financial Statements
F-4
<PAGE> 7
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Total
Common Paid-in Deferred Common Stock Accumulated Stockholders'
Shares Stock Capital Compensation Receivable Deficit Equity
----------- ----------- ----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sale of common stock at approx
$1.507 per share 33,181 3 49,997 -- -- -- 50,000
Refund of sale of common stock (26,545) (3) (39,997) -- -- -- (40,000)
Vesting of stock options -- -- -- 14,130 -- -- 14,130
Record reverse acquisition and
related minority interest 38,766,370 3,876 (669,583) -- (700,000) -- (1,365,707)
(See Note 1)
Net Loss -- -- -- -- -- (5,382,366) (5,382,366)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, September 30, 2000 76,918,542 $ 7,691 $ 8,942,377 $ (88,770) $ (700,000) $(5,815,778) $ 2,345,520
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
F-5
<PAGE> 8
TELESERVICES INTERNET GROUP INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Period from inception
Nine Months Ended September 30, (May 1, 1999) through
2000 1999 September 30, 2000
------------- -------------- ---------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ ( 5,382,366) $ (251,932) $ (5,815,778)
Adjustments to reconcile net income (loss) to
net cash used for operating activities:
Amortization of goodwill 100,970 -- 100,970
Depreciation 139,461 -- 152,794
Expenditures paid on behalf of company
by Officer/Director -- 249,804 338,802
Stock issued for services 2,977,210 -- 2,977,210
Stock issued to employees as compensation 63,000 63,000
Below market options issued 293,230 -- 140,230
Cash provided by (used in)
Restricted cash (60,000) -- (60,000)
Prepaid expenses (95,330) -- (365,330)
Other current assets (3,266) -- (3,266)
Officer receivable, net 17,091 -- 17,091
Other assets (62) -- (62)
Accounts payable and accrued expenses (1,025,932) 2,128 (999,682)
------------- ------------- -------------
Net cash (used in) operating activities (2,975,994) -- (3,076,021)
------------- ------------- -------------
Cash flows from investing activities:
Advances to related parties
Rob Gordon (510,000) -- (510,000)
Reliant (679,092) -- (679,092)
Expenditures for software development (263,136) -- (263,136)
Purchase of fixed assets (505,499) -- (505,499)
------------- ------------- -------------
Net cash (used in) investing activities (1,957,727) -- (1,957,727)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from Affinity loans 157,437 -- 157,437
Payment of loan payable, Officer (438,802) -- (438,802)
Proceeds from issuance of common stock 5,886,900 9,665 6,233,565
Refunds of proceeds from stock issuance (40,000) -- (40,000)
------------- ------------- -------------
Net cash (used in) financing activities 5,565,535 9,665 5,912,200
------------- ------------- -------------
Net increase in cash 631,814 9,665 878,452
Cash beginning of period 246,638 -- --
------------- ------------- -------------
Cash end of period $ 878,452 $ 9,665 $ 878,452
============= ============= =============
</TABLE>
The accompanying footnotes are an integral part of the Financial Statements.
F-6
<PAGE> 9
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(1) Condensed Financial Statements:
Basis of Presentation
The financial statements included herein have been prepared by
TeleServices Internet Group Inc. ("TSIG") without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
References to "the Company" refer to TSIG and consolidated
subsidiaries. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
as allowed by such rules and regulations, and the Company believes that
the disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the December 31, 1999 audited financial statements and
the accompanying notes thereto of GSCI filed in Form 8-K/A on November
6, 2000. While management believes the procedures followed in preparing
these financial statements are reasonable, the accuracy of the amounts
are in some respects dependent upon the facts that will exist, and
procedures that will be accomplished by the Company later in the year.
Acquisition
On August 23, 2000, TSIG and GeneralSearch.Com, Inc. ("GSCI") completed
a business combination that was effective for accounting purposes on
August 31, 2000. The former stockholders of GSCI obtained approximately
55% of the voting rights of the Company. Although GSCI became a
subsidiary of TSIG, the transaction has been accounted for as a
purchase of TSIG by GSCI (a reverse acquisition in which GSCI is
considered the acquirer for accounting purposes) since the stockholders
of GSCI obtained a majority of the voting rights of the Company as a
result of this transaction. Accordingly, the historical financial
statements are those of GSCI. As a result, share information prior to
the transaction has been retroactively adjusted to give effect to the
share exchange.
The management of the Company believes that the accompanying unaudited
condensed financial statements contain all adjustments (including
normal recurring adjustments and the effects of an acquisition with
GSCI) necessary to present fairly the operations and cash flows for the
periods presented.
Management's assessment of the fair value of the consideration in the
transaction over the net liability of TSIG resulted in goodwill of
$3,408,234. Goodwill was further increased by $2,650,000, which
represented fees and costs incurred in the transaction for total
goodwill of $6,058,234. The Company has entered into a 8% convertible
debenture in the amount of $2,650,000 issued for payment of financial
advisory fees related to the business combination. The fair value
ascribed to the employee options exchanged in the transaction was not
considered material. The excess of the purchase price over the fair
value of the net assets acquired totaled $6,058,234 and will be
amortized on a straight-line basis over five years. TSIG has minimal
revenue from existing TSIG operations and has expenses substantially in
excess of the revenue. Subsequent to September 30, 2000, TSIG
management has been considering taking steps to discontinue certain
existing TSIG business, which could result in the permanent impairment
of all or a portion of the goodwill and could result in a reallocation
of the purchase price. On a prospective basis, management will be
required to evaluate the recoverability of this goodwill if and when
events or changes in circumstances indicate that the carrying value of
the goodwill may not be recoverable through the estimated undiscounted
future cash flows from the TSIG business. If and when such an
impairment exists, the goodwill will be written down to fair value.
Such writedown could be material to the Company's results of
operations.
F-7
<PAGE> 10
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(1) Condensed Financial Statements (continued):
GSCI was founded May 1, 1999 in West Chicago, IL as a global Internet
communications and commerce company to provide a family-oriented search
engine and Internet service for online users. Since its inception,
GSCI's efforts have been devoted to raising capital and developing its
website for online users. Accordingly, through the date of these
financial statements, the Company is considered to be in the
development stage and the accompanying financial statements represent
those of a development stage enterprise.
The Minority interest recorded on the Company's Balance Sheet
represents the equity of GSCI owned by shareholders of GSCI that did
not exchange shares with TSIG in the August 23, 2000 business
combination.
Unaudited Pro Forma Information
The following unaudited pro forma information has been prepared
assuming the business combination had taken place at January 1, 1999.
The unaudited pro forma information includes adjustments for the
amortization of intangibles arising from the transaction. The unaudited
pro forma financial information is not necessarily indicative of the
results of operations as they would have been had the transactions been
effected on the assumed date.
<TABLE>
<CAPTION>
Year ended December 31, 1999
<S> <C>
Net sales $ 395,767
Net loss to common stockholders $ (9,916,650)
Net loss per common share $ (.21)
</TABLE>
<TABLE>
<CAPTION>
Nine months ended September 30, 2000
<S> <C>
Net sales $ 168,272
Net loss to common stockholders $(20,980,088)
Loss per common share $ (.30)
</TABLE>
Basis of Presentation - Going Concern
The Company's consolidated financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. However, the Company has sustained
recurring operating losses since its inception and has a working capital deficit
of $5,228,287 and the stockholders' tangible deficit without the inclusion of
goodwill is $3,611,744 as of September 30, 2000 and has not begun to generate
any significant revenues. TSIG is materially delinquent on payments to various
creditor obligations including the Internal Revenue Service. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. The consolidated financial statements do not include any adjustments to
reflect the possible future affects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the
possible inability of the Company to continue as a going concern.
F-8
<PAGE> 11
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(1) Condensed Financial Statements (continued):
Management is attempting to expand its operations through acquisition
of companies through stock exchanges and has identified two potential
acquisition candidates (see Note 2) which management believes would be
synergistic with its existing Internet business. Management is also
attempting to raise additional capital and has engaged an
investment-banking firm to assist with its acquisitions and capital
formation (see Note 5).
Recent Accounting Pronouncements
During the fourth quarter of 1999, the Securities and Exchange
Commission issued Staff Accounting Bulletin (SAB) No. 101, "Revenue
Recognition in Financial Statements". The provisions of SAB No. 101 and
subsequently issued guidance are required to be adopted no later than
the fourth quarter of the fiscal year beginning after December 15,
1999. Management believes that SAB No. 101 does not materially alter
the Company's revenue recognition methods.
In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44 (FIN 44), Accounting for Certain Transactions
Involving Stock Compensation, an Interpretation of APB Opinion No. 25.
FIN 44 clarifies the application of Opinion No. 25 for (a) the
definition of employee for purposes of applying Opinion No. 25, (b) the
criteria for determining whether a plan qualifies as a noncompensatory
plan, (c) the accounting consequences of various modifications to the
previously fixed stock option or award, and (d) the accounting for an
exchange of stock compensation awards in a business combination. FIN 44
is effective July 2, 2000, but certain conclusions cover specific
events that occur after December 15, 1998 or January 12, 2000. The
Company believes that the impact of FIN 44 will not have a material
effect on the Company's financial position or results of operations.
Net Income (Loss) Per Common Share
Basic EPS is calculated by dividing the income (loss) available to
common shareholders by the weighted average number of common shares
outstanding for the period without consideration for potential common
shares. Potential common shares were not included for the three or nine
months ended September 30, 2000 since their effects are antidilutive
under the treasury stock method for options and warrants and
if-converted method for convertible preferred stock. Potential common
shares consist of options, common stock warrants and 8% convertible
debentures.
(2) Proposed Business Combinations
In June 2000, TSIG announced that it had entered into definitive
agreements to acquire two companies: The Affinity Group LLC
("Affinity"), an affinity marketing company, and Reliant Interactive
Media Corporation ("Reliant"), a direct marketing company that drives
retail sales via television and the Internet. These agreements are
subject to various contingencies including
F-9
<PAGE> 12
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
variable stock issuances depending on the trading price of the
Company's stock. The entities involved in the proposed business
combinations are in the process of completing their due diligence
reviews. There can be no assurance that either of the proposed
transactions will be completed due to uncertainties inherent in
resolving various contingencies.
(3) Related Party Loans Receivable and Payable
As of September 30, 2000 the Company had a net receivable of $117,066
from its Chairman/CEO related to advances less accrued salaries.
In June and July 2000, GSCI loaned $510,000 in personal loans to TSIG's
Chairman/CEO. These loans are collateralized by certain personally
owned stock of the Company. The loans bear interest at 8% and are due
120 days after the dates of the various loans. The loans are past due
and the Company is currently negotiating with the Chairman/CEO over the
repayment terms of the loans.
On July 31, 2000 TSIG issued 1,000,000 shares of its common stock to
its Chairman/CEO, related to a previously granted option at $.70 per
share. The Company's Board of Directors approved the exercise of this
option exercise without payment and directed the Company to record the
$700,000 as a receivable in the Company's financial statements. As of
September 30, 2000 the $700,000 has not been collected and has been
shown as a reduction of stockholders' equity.
In September 2000, the Company advanced Reliant cash totaling $679,092
under a promissory note with interest at one and one half percent per
month, payable as Reliant sells certain inventory with all unpaid
principal and accrued interest due on February 28, 2001. The note is
collateralized by inventory. In October 2000, the Company advanced an
additional $275,000 to Reliant.
In September 2000, the Company received cash advances bearing interest
at 12% per annum from The Affinity Group, Inc., totaling $157,436 as of
September 30, 2000 and received additional advances totaling $258,590
through November 17, 2000. The advances are due on demand and
collateralized by certain common stock of the Company, a promissory
note for which is expected to be executed by month end.
(4) Payroll Tax Liability
Visitors Services, Inc. ("VSI"), a formerly wholly owned subsidiary of
TSIG filed a voluntary petition for relief under Chapter 7 of the
United States Bankruptcy Code for the Middle District of Florida, Tampa
Division on March 5, 1999. Creditors of VSI, including the Internal
Revenue Service, may assert a claim against TSIG. A contingency exists
with respect to these matters, including final determination of the
Company's ultimate amount of liability, if any. In addition, a
contingency exists with respect to the determination if TSIG is
required to reimburse an officer/director of TSIG/VSI for Internal
Revenue Service penalties assessed due to non-payment of the trust fund
portion of payroll taxes not remitted. A liability of $605,588 was
accrued by TSIG related to this matter as of September 30, 2000. TSIG
has also accrued $571,992 in federal payroll taxes due and unpaid for
1999 and the fourth quarter of 1998.
F-10
<PAGE> 13
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
Management is in frequent contact with the Internal Revenue Service and
intends to use proceeds from capital raised subsequent to its planned
acquisitions to pay these obligations.
F-11
<PAGE> 14
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(5) Proposed Financing
On February 29, 2000, TSIG announced that it had entered into a letter
agreement engaging a prominent New York based investment-banking firm
as its exclusive agent for a private placement financing of up to $40
million, and on April 26, 2000, the letter agreement was amended to
provide for a financing of up to $125 million. However, no assurances
can be given that such financing will be available in the amount
required or, if available, that it can be on terms satisfactory to the
Company.
(6) 8% Convertible Debenture
On August 23, 2000, TSIG issued an 8% convertible debenture to the
investment banking firm referred to in Note 5 in the amount of
$2,650,000 for payment of financial advisory fees related to the GSCI
business combination. The principle and accrual interest is due at the
earlier of the receipt of certain financing or December 31, 2000. The
debenture is convertible at 85% of the market price of the Company's
common stock on the conversion date.
(7) Stockholders' Equity
GSCI sold 3,640,919 and 147,322 shares of common stock in private
placements with proceeds of $5,486,500 and $266,400 or approximately
$1.507 and $1.808 per share, respectively, during the first six months
of 2000. GSCI also issued 1,983,211 shares of common stock for
financial advisory services related to the private placements. GSCI
recorded the issuance of 336,778 of these shares of common stock, with
a fair market value of $608,988 or approximately $1.808 per share to
stockholders' equity. An additional 1,646,433 shares with a fair market
value of $2,977,210 or approximately $1.808 per share, were charged to
operations as financial advisory fees.
GSCI granted 10,500 shares of common stock to employees during the
first six months of 2000 with a fair market value of $63,000 or
approximately $1.808 per share. The fair market value of the stock
grant was recorded as compensation expense on the date of grant.
During the first six months of 2000, GSCI granted options to purchase
663,614 shares of common stock to employees with exercise prices
ranging from $.30 to $1.808 per share of which 109,000 vested on May 1,
2000 with the remaining 301,944 options vesting through May 1, 2002.
GSCI charged operations for $279,100 related to vested options issued
at below market and recorded $102,000 as deferred compensation related
to unvested options issued at below market. An additional $14,130 was
expensed in the three months ended September 30, 2000 relating to the
vesting of these options.
During July and August 2000 GSCI issued additional shares of common
stock related to private placements initiated earlier in the year. GSCI
received proceeds of $84,000 and $50,000 related to the sale of
issuance of 46,453 and 33,181 shares of common stock at approximately
$1.808 and $1.507 per share, respectively. In addition GSCI refunded
proceeds of $40,000 related to a previous issuance of 26,545 shares of
common stock.
F-12
<PAGE> 15
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(7) Stockholders' Equity (continued)
Prior to the closing of the business combination with GSCI on August
23, 2000, TSIG had 36,066,370 shares of common stock outstanding,
including 5,062,965 common shares related to recently converted Series
A Preferred Stock of TSIG. There are 5,000,000 common stock warrants
outstanding related to the converted preferred stock, exercisable for
five years at $1.50.
The TSIG and GSCI business combination resulted in the issuance of
40,852,172 shares of TSIG's common stock, including 38,152,172 shares
to former GSCI shareholders and 2,700,000 issued as payment for a
finders fee. For accounting purposes, these shares are reported on the
statement of stockholders' equity as the total shares outstanding
immediately prior to the reverse acquisition.
(8) TSIG Incentive Stock Plan
On July 14, 2000, the TSIG's board of directors adopted the TSIG.com
2000 Incentive Stock Plan, a non-qualified plan that terminates on July
13, 2005. The Plan provides for the grant of options or shares of
common stock not to exceed 9,500,000 shares to employees, directors,
officers, consultants or advisors of the Company. The terms of options
granted are determined by the board of directors (or a committee
thereof) at the date of grant.
On July 31, 2000 TSIG granted five year non-plan options at $1.20 per
share (approximately 120% of the market price on the date of grant) to
acquire 4,000,000 shares of the Company's common stock to its
Chairman/CEO. These options vest as follows:
2,000,000 immediately
1,600,000 upon the closing of one of the proposed business combinations
200,000 upon the closing of one of the proposed business combinations
200,000 upon the closing of one of the proposed business combinations
On July 31, 2000, TSIG granted an aggregate 1,200,000 non plan options
to four directors; such options are exercisable and vest quarterly over
a three year period with an exercise price of $1.20 per share
(approximately 120% of the market price on the date of grant). To vest
in the options the director must remain a director on the vesting
dates.
(9) Litigation and Subsequent Events
Litigation
On October 15, 1999, Clarity Consulting, Inc. ("Clarity"), filed an
amended complaint in the Circuit Court of Cook County, Illinois, adding
the Company as a defendant in their suit to recover monies that they
originally alleged were owed by VSI. The complaint alleges that on June
24, 1997, Clarity and the defendants entered into an agreement for
consulting services, that consulting services were provided between
October 1996 and August 1997, and that the defendants promised to pay
for the consulting services and failed to do so. Clarity seeks a
judgment against the defendants in the amount of $552,635, plus service
charges at the rate of
F-13
<PAGE> 16
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(9) Litigation and Subsequent Events (continued)
one and one-half percent per month, plus such other relief as the court
may deem equitable and just, as well as attorneys fees and court costs.
On March 13, 2000, the Company filed a Motion to Quash Service For Lack
of Personal Jurisdiction on the basis that Illinois does not have
proper jurisdiction over the Company in this dispute. On July 7, 2000,
the Court granted the Company's Motion.
On June 17, 1999, the Company and Robert P. Gordon, individually and as
an officer of the Company, were named as defendants, among others, in
an amended complaint filed by Miles and Rosalie Lerman in United States
District Court for the District of New Jersey. The Lerman's claim that
their broker-dealers (also named as defendants) made unauthorized
transactions in their accounts in "high risk penny stocks," including
the common stock of the Company, that resulted in losses in excess of
$2,000,000. The complaint seeks recovery of actual and consequential
damages, costs and attorneys' fees, and other forms of equitable relief
from all defendants. The Company and Mr. Gordon filed a motion to
dismiss, which was denied on June 30, 2000. However, the court granted
Mr. Gordon and the Company's motion to strike the Plaintiff's claims
for attorney's fees. The broker defendant filed for protection under
Chapter 7 of the bankruptcy code in May 2000. This gave rise to an
automatic stay of all civil litigation against the broker, including
the Lerman matter. In October 2000 the bankruptcy court lifted the stay
as to the Lerman matter, and permitted the Plaintiffs to proceed
against the broker. In addition, the judge presiding in the Lerman
matter authorized the Plaintiffs to amend their complaint to assert
their claim that the broker's alleged debt to the Plaintiff's should
not be dischargeable in bankruptcy, based on their allegations of fraud
committed by the broker. The court-ordered deadline for discovery was
October 31, 2000. The parties are now in the process of identifying
expert witnesses, preparing expert opinions, and deposing the experts.
The deadline for expert discovery is February 28, 2001. The final
pre-trail conference has been set for April 30, 2001.
On November 15, 2000 the Company settled its contract dispute with EIS
International, Inc. (EIS) of Herndon, Virginia. In exchange for full
mutual releases, the Company agreed to pay over to EIS the insurance
proceeds in the amount of $61,166 that the Company received from its
insurer, in payment of the Company's claim for coverage of a stolen
server, including the resident software that was provided by EIS. On
December 28, 1998 EIS issued a Demand for Arbitration to the Company,
as the result of a dispute arising under a contract dated May 7, 1998
with the Company. EIS was seeking $223,261 for software, licenses and
services, which it claimed were due and owing under the parties
agreement, plus interest, attorneys' fees and costs. The Company
claimed that it notified EIS of major defects in the software, demanded
that they be remedied, but EIS refused to do so and instead demanded
payment. Further, the Company counter-claimed that it has suffered
damages in excess of $200,000, plus costs and attorneys' fees, because
the Company was forced to create alternative systems for performing the
functions for which the EIS software was intended and suffered
significant loss of business opportunities as a result of the failure
of EIS's software to perform as promised.
F-14
<PAGE> 17
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(9) Litigation and Subsequent Events (continued)
Subsequent Events
On October 1, 2000 the Company granted an officer/director fully
vested, five year, $1.00 per share options to acquire 2,000,000 shares
of common stock. On October 30, 2000 the Company issued 1,000,000
shares of its common stock to an officer/director related to the
exercise of the options granted on October 1, 2000. The Company's Board
of Directors approved this option exercise without payment and directed
the Company to record the $1,000,000 as a receivable in the Company's
financial statements and will be shown as a contra equity account.
On October 20, 2000 the Company issued 100,000 shares of common stock
valued at $86,000, or $.86 per share and on November 2, 2000 issued
100,000 shares of common stock valued at $114,000 or $1.00 per share,
both issuance's were for the settlement of previously accrued legal
fees.
On July 31, 2000, TSIG entered into an agreement with a consultant for
business development services in Asian markets, including China.
Pursuant to the agreement, TSIG issued registered shares as advanced
payment-in-full for all services to be rendered and granted the
consultant an option to acquire shares of stock. On November 2, 2000,
the Company terminated the consulting agreement and cancelled all
options authorized under the agreement.
On November 17, 2000 the Company agreed to issue 100,000 shares of
common stock to a consultant valued at approximately $90,000 or $.90
per share in exchange for a one year consulting agreement.
On November 10, 2000, the Company issued 750,000 shares of common stock
to a consultant valued at $832,500 or $1.11 per share pursuant to a
consulting agreement.
(10) Lease Agreement
In July 2000, GSCI entered into a 38-month lease agreement for its new
operating facility in Oak Brook, Illinois, commencing on August 1,
2000. Subsequent to September 30, 2000 the Company incurred office
space build out costs of approximately $195,000. The approximate future
minimum lease payments on this lease are as follows:
<TABLE>
<CAPTION>
Period Ending
December 31 Amount
------------- --------
<S> <C>
2000 $ 39,000
2001 157,000
2002 162,000
2003 124,000
--------
Total $482,000
========
</TABLE>
Subsequent to September 30, 2000 the Company incurred office space build out
costs of approximately $195,000.
F-15
<PAGE> 18
TeleServices Internet Group Inc. And Subsidiaries
(A Development Stage Company)
Notes To Consolidated Financial Statements
September 30, 2000
(Unaudited)
(11) Supplemental Cash Flow Information
The Company paid interest of $28,886 during the nine months ended September 30,
2000.
The Company executed a business combination effective on August 31, 2000 as
described in Note 1 to the financial statements. The following is the allocation
of the purchase price between assets acquired and liabilities assumed.
<TABLE>
<S> <C>
Liabilities assumed:
Accounts payable and accrued expenses $ 4,418,247
Notes payable 261,508
Convertible debentures 2,650,471
------------
Total consideration 7,330,226
Assets acquired:
Restricted cash (30,000)
Prepaid expense (105,579)
Other current assets (27,467)
Officers loan receivable, net (134,567)
Equipment, net (267,493)
Other assets (6,886)
Officer receivable (700,000)
Allocation to goodwill (6,058,234)
------------
Cash acquired in transition $ --
============
</TABLE>
From inception (May 1, 1999) through December 31, 1999, the founder/CEO advanced
funds and provided fixed assets which were recorded in due to officer for the
startup of the Company as follows:
<TABLE>
<S> <C>
Operations $ 338,802
Fixed assets 100,000
------------
Total advanced $ 438,802
============
</TABLE>
F-16
<PAGE> 19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
On August 23, 2000, TeleServices Internet Group Inc. ("TSIG" or "the
Company") and GeneralSearch.com, Inc. ("GSCI") completed a business combination.
The former stockholders of GSCI obtained approximately 55% of the voting rights
of the Company. Although GSCI became a subsidiary of TSIG, the transaction has
been accounted for as a purchase of TSIG by GSCI (a reverse acquisition in which
GSCI is considered the acquirer for accounting purposes, effective August 31,
2000), since the stockholders of GSCI obtained a majority of the voting rights
of TSIG as a result of this transaction. Accordingly, the historical financial
statements of the Company for the periods prior to August 31, 2000 are those of
GSCI. Therefore, the accompanying statements of operations contains the
operating results of GSCI for the entire periods and TSIG for the one month
ended September 30, 2000.
Revenue - As a development-stage company, GSCI has not yet generated
any revenues. After the August 31 effective date of the business combination,
the Company had revenues of $22,531 for the month of September 2000 consisting
of approximately $10,000 from TSIG's travel agent business and the balance from
TSIG's MyCard programs.
Selling, General and Administrative - The Company's selling, general
and administrative expenses for the nine months ended September 30, 2000 were
$2,013,643 as compared to $251,932 for the period from inception, May 1, 1999
through September 30, 1999, an increase of $1,761,711. The increase is the
result of GSCI operating ended for 9 months in 2000 as compared to five months
in 1999 and GSCI's expanded staff and operations during 2000 of which $906,355
related to increased payroll expense. In addition, TSIG operating expenses of
$464,013 have been included for the month of September 2000 that consisted
primarily of payroll, facility costs and office operating expenses.
The Company's selling, general and administrative expenses for the
three months ended September 30, 2000 were $983,060 as compared to $147,283 for
the same period in the prior year, an increase of $835,777. The increase is the
result of GSCI having limited operations during this period in 1999, an increase
in payroll expense between the periods of $227,229 and the addition of TSIG's
operating expenses of $464,013 for the month of September 2000.
Depreciation and Amortization Expense - The Company's depreciation and
amortization expense was $240,431 and $212,481 for the nine months and the three
months ended September 30, 2000, respectively, as compared to none in the same
periods in the year prior. The increase is the result of $100,970 in goodwill
amortization expense recorded in September 2000 related to the business
combination between TSIG and GSCI, depreciation expense of TSIG totaling $29,084
for one month and the difference related to depreciation expense on fixed assets
acquired by GSCI during the period subsequent to September 30, 1999.
Outside Advisory Services - The Company's outside advisory services
expense was $3,197,755 and $169,974 for the nine months and the three months
ended September 30, 2000, respectively, as compared to none in the same periods
in the year prior. The increase in financial advisory fees is primarily
attributable to the issuance of common stock by GSCI, valued at $2,977,210,
during the first six months of 2000 to financial advisors in connection with a
private placement of GSCI's common stock, and $126,931 related to one month of
consulting expense for TSIG in September 2000.
Operating Plan
In June, 2000, TSIG announced that it had entered into definitive
agreements to acquire three companies: GeneralSearch.Com, Inc. ("GSCI"), an
Internet portal and search engine; The Affinity Group Inc. ("Affinity"), an
affinity marketing company; and Reliant Interactive Media Corporation
("Reliant"), a direct marketing company that drives retail sales via television
and the Internet. On August 23, 2000, TSIG completed the business combination
described above with GSCI. Closing of the planned acquisitions of Affinity and
Reliant remains subject to final documentation, and the Company can give no
assurances that these acquisitions will be successfully completed.
2
<PAGE> 20
The Company plans to generate revenues and drive traffic to
GeneralSearch.Com by implementing its MyCard programs, cross marketing
GeneralSearch.Com to the customers of Affinity and Reliant and generating
revenue from the operations of Affinity and Reliant after their acquisition.
However, the Company can give no assurances that these acquisitions will be
successfully completed. These customized affinity marketing programs are
designed to acquire Internet customers at very low cost, to provide recurring
revenues to the Company and its partners, to help develop strong brand loyalty
and awareness within target communities, and to drive new subscribers to
www.generalsearch.com and other Web sites of the Company and its partners. The
Company enhances its MyCard programs by providing customer service and support
with its Web-based call center and related services, an activity that would be
strengthened by the soon anticipated acquisition of the Affinity Group that also
operates a call center operation. The Company's Web sites are at
www.generalsearch.com, www.tsig.com, and www.mymusiccard.com.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception on May 1, 1999, the company has accumulated net
losses of $5,815,778. The Company's primary activity to date has been to develop
the www.generalsearch.com Internet site. To finance its development activities,
the Company has relied exclusively on capital-raising transactions. The
Company's consolidated financial statements are presented on the going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. However, as of September 30, 2000,
the Company has a working capital deficit of $5,228,287 and a stockholders'
tangible deficit without the inclusion of goodwill of $3,611,744. The Company
has not begun to generate any significant revenues from its Internet business or
its affinity marketing programs. The Company is materially delinquent on
payments to various creditors, including the Internal Revenue Service. There can
be no assurance that the Company will be able to achieve material revenues or
profitable operations. The Company also has an 8% convertible debenture with an
outstanding balance of $2,668,138 as of September 30, 2000 that is due no later
than December 31, 2000. The Company currently does not have capital sufficient
to repay this obligation. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. The consolidated financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.
Management plans to generate revenues by expanding the Company's
Internet operations and affinity marketing programs, and by acquiring companies
which management believes will be synergistic with its existing businesses. To
achieve these objectives, the Company requires substantial additional financing.
On February 29, 2000, the Company announced that it had entered into a letter
agreement engaging a prominent New York based investment banking firm as its
exclusive agent for a private placement financing of up to $40 million, and on
April 26, 2000, the letter agreement was amended to provide for a financing of
up to $125 million. However, no assurances can be given that such financing will
be available in the amount required or, if available, that it can be on terms
satisfactory to the Company.
Visitors Services, Inc. ("VSI"), a former wholly owned subsidiary of
TSIG, filed a voluntary petition for relief under Chapter 7 of the United States
Bankruptcy Code for the Middle District of Florida, Tampa Division on March 5,
1999. Creditors of VSI, including the Internal Revenue Service, may assert a
claim against the Company. A contingency exists with respect to these matters,
including final determination of the Companies' ultimate amount of liability, if
any. A liability of $605,588 has been accrued by TSIG relative to this matter as
of September 30, 2000. TSIG has also accrued $571,992 in federal payroll taxes
due and unpaid for 1999 and the fourth quarter of 1998. Management is in
frequent contact with the Internal Revenue Service and intends to use proceeds
from capital raised subsequent to its planned acquisitions to pay these
obligations. However, no assurances can be given that such capital will be
available in the amount required or, if available, that it can be on terms
satisfactory to the Company.
As described in TSIG's annual report on Form 10-KSB for the year ended
December 31, 1999, in Note 9 to the consolidated financial statements for the
period ended September 30, 2000 and in Part II, Item 1 of this quarterly report
on Form 10-QSB, the Company is a defendant in several pending litigation
matters. The Company can give no assurance that the outcome of any of these
litigation matters will be favorable to the Company.
3
<PAGE> 21
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, readers of this document and any
document incorporated by reference herein, are advised that this document and
documents incorporated by reference into this document contain both statements
of historical facts and forward looking statements. Forward looking statements
are subject to certain risks and uncertainties, which could cause actual results
to differ materially from those indicated by the forward looking statements.
Examples of forward looking statements include, but are not limited to (i)
projections of revenues, income or loss, earning or loss per share, capital
expenditures, dividends, capital structure and other financial items, (ii)
statements of the plans and objectives of the Company or its management or Board
of Directors, including the introduction of new products, or estimates or
predictions of actions by customers, suppliers, competitors, or regulatory
authorities, (iii) statements of future economic performance, (iv) statements
about plans of the Company or its management or Board of Directors to raise
capital to fund the Company's business operations and its acquisitions, and (v)
statements of assumptions underlying other statements and statements about the
Company or its business. Forward looking statements are beyond the ability of
the Company to control and in many cases the Company cannot predict what factors
would cause results to differ materially from those indicated by the forward
looking statements.
4
<PAGE> 22
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings:
There have been no material developments in any of the legal
proceedings described in the Company's annual report on Form 10-KSB for the year
ended December 31, 1999, or the quarterly reports on Form 10-QSB for the periods
ended March 31, 2000 and June 30, 2000, except as follows:
On December 28, 1998, EIS International, Inc. (now Portal Connect,
Inc.), of Herndon, Virginia, issued a Demand for Arbitration to the Company, as
the result of a dispute arising under a contract dated May 7, 1998 with the
Company. EIS seeks $223,261 for software, licenses and services, which it claims
are due and owing under the parties agreement, plus interest, attorneys' fees
and costs. The Company claims that it notified EIS of major defects in the
software, demanded that they be remedied, but EIS refused to do so and instead
demanded payment. Further, the Company counter-claimed that it has suffered
damages in excess of $200,000, plus costs and attorneys' fees, because the
Company was forced to create alternative systems for performing the functions
for which the EIS software was intended and suffered significant loss of
business opportunities as a result of the failure of EIS's software to perform
as promised. On November 15, 2000, the dispute was settled. In exchange for full
mutual releases, the Company agreed to pay over to EIS the insurance proceeds
the Company received from its insurer in payment of the Company's claim for
coverage of a stolen server, including the resident software, that was provided
by EIS. The amount of such insurance proceeds was $61,165.77.
ITEM 2. Changes in Securities:
A. On August 23, 2000, the Company executed an Agreement and Plan of
Reorganization ("Agreement") with GeneralSearch.com, Inc., a Minnesota
corporation ("GSCI") and nine stockholders of GSCI pursuant to which 84.7826% of
the issued and outstanding shares of common stock of GSCI were acquired by the
Company in exchange for an aggregate of 38,152,178 shares of restricted common
stock of the Company. By virtue of the reorganization, GSCI becomes a subsidiary
of the Company. In connection with the acquisition, the Company issued an 8%
convertible debenture in the face amount of $2,650,000, due December 31, 2000,
to Ladenburg Thalmann & Co., Inc. ("Ladenburg") for financial advisory services
rendered and the delivery of a fairness opinion. The Company also issued
2,700,000 shares of restricted common stock to Rangeley Corporation as an
advisory fee in connection with the transaction. The Company believes that this
transaction was exempt from registration pursuant to Section 4(2) and Rule 506
of Regulation D of the Securities Act of 1933.
B. On August 29, 2000, the Company issued 5,062,963 shares of common stock and
warrants to acquire an aggregate of 5,000,000 shares of common stock at an
exercise price of $1.50 per share until March 31, 2005, upon conversion of all
outstanding shares of Series A Convertible Preferred Stock (held by
approximately 31 investors). All persons are accredited investors, and the
Company believes that this transaction is exempt from registration pursuant to
Sections 4(2), 4(6) and/or Rule 506 of Regulation D of the Securities Act of
1933.
ITEM 3. Defaults Upon Senior Securities: None.
ITEM 4. Submissions of Matters to a Vote of Security Holders: None.
ITEM 5. Other Information:
A. On July 31 ,2000, the Company entered in to an agreement with Star Anise S&T
Co., Ltd. for business development services in Asian markets. On November 2,
2000, the Company and Star Anise mutually agreed to terminate the agreement as a
result of the Company's decision to not pursue business development in Asian
markets at this time. As a result of the termination, the option to acquire
3,500,000 shares of common stock of the Company that was granted to Star Anise
pursuant to the agreement was cancelled in full.
B. On November 3, 2000, Jeffrey C. Bruss, a director of the Company, executed a
Consent to Entry of Injunction in connection with a complaint filed by the U.S.
Securities & Exchange Commission ("SEC") against Mr. Bruss in October 1998. The
complaint alleged, among other things, that Mr. Bruss failed to: make adequate
5
<PAGE> 23
disclosure of compensation received by companies profiled in an investment
newsletter prepared and distributed by a company he controlled; disclose sales
of stock of profiled companies; provide accurate research of profiled companies;
and accurately report the success of past stock picks. However, because final
SEC approval is pending, the specific terms and conditions of the Entry of
Injunction cannot be disclosed at this time. By executing the Consent, Mr. Bruss
did not admit or deny any of the allegations in the complaint.
ITEM 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
Exhibit No. Description
2.8 Agreement and Plan of Reorganization between
TeleServices Internet Group Inc. and GeneralSearch.com,
Inc., dated August 22, 2000. (Incorporated by reference
to Exhibit 2.8 of the Company's Form 8-K dated August
23, 2000 and filed on August 30, 2000).
3.6 Bylaws as restated April 22, 1999. (Incorporated by
reference to Exhibit 3.6 of the Company's Registration
Statement on Form SB-2 (file no. 333-78077) filed on
May 7, 1999).
3.9 Articles of Incorporation, as amended on June 14, 2000,
and currently in effect. (Incorporated by reference to
Exhibit 3.9 of the Company's Current Report on Form 8-K
dated June 14, 2000 and filed June 15, 2000).
4.8 Form of Securities Purchase Agreement for private
placement of Series A Convertible Preferred Stock which
commenced in August 1999. (Incorporated by reference to
Exhibit 4.8 of the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999.)
4.9 Form of Series A Common Stock Purchase Warrant issuable
upon conversion of Series A Convertible Preferred
Stock. (Incorporated by reference to Exhibit 4.9 of the
Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999.)
4.11 8% Convertible Debenture due December 31, 2000, issued
by TeleServices Internet Group Inc. to Ladenburg
Thalmann & Co., dated August 23, 2000 (Incorporated by
reference to Exhibit 4.11 of the Company's Form 8-K
filed on August 30, 2000).
4.12 Registration Rights Agreement by and between
TeleServices Internet Group Inc. and Ladenburg Thalmann
& Co. Inc., dated August 23, 2000 (Incorporated by
reference to Exhibit 4.12 of the Company's Form 8-K
filed on August 30, 2000).
10.9 Employment Agreement between the Company and Robert P.
Gordon dated December 4, 1998. (Incorporated by
reference to Exhibit 10.9 of the Company's Form 10-KSB
for the fiscal year ended December 31, 1998 and filed
on March 31, 1999).
10.16 TSIG.com Incentive Stock Plan dated December 17, 1999.
(Incorporated by reference to Exhibit 10.16 of the
Company's Registration Statement on Form S-8 (file no.
333-32548) filed March 15, 2000).
10.17 Employment Agreement between the Company and Joseph K.
Keegan dated December 6, 1999. (Incorporated by
reference to Exhibit 10.17 of the Company's Annual
Report on Form 10-KSB for the year ended December 31,
1999.)
6
<PAGE> 24
10.18 Employment Agreement between the Company and Richard H.
Wheeler dated December 6, 1999. (Incorporated by
reference to Exhibit 10.18 of the Company's Annual
Report on Form 10-KSB for the year ended December 31,
1999.)
10.20 Agreement to Serve as a Director between the Company
and Frank Ragano dated September 29, 1999.
(Incorporated by reference to Exhibit 10.20 of the
Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999.)
10.21 TSIG.com 2000 Stock Plan dated July 14, 2000.
(Incorporated by reference to Exhibit 10.21 of the
Company's Registration Statement on Form S-8 (file no.
333-41716) filed July 19, 2000).
10.22 Consulting Agreement between the Company and Paul W.
Henry dated May 15, 2000. (Incorporated by reference to
Exhibit 10.22 of the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 2000).
27 Financial Data Schedule. (Filed herewith.)
(b) Reports on Form 8-K.
On July 5, 2000, the Company filed a current report on Form 8-K, dated
June 27, 2000, to report that the Company had engaged the accounting firm of BDO
Seidman LLP to serve as new auditors. On July 24, 2000, the Company amended the
report on Form 8-K/A to provide additional information about the change in
auditors.
On August 30, 2000, the Company filed a current report on Form 8-K,
dated August 23, 2000, to report that the Company had acquired approximately 85%
of the outstanding common stock of GeneralSearch.com, Inc. On November 6, 2000,
the Company amended the report on Form 8-K/A-1 to provide certain required
financial statements of GeneralSearch.com, Inc. On November 17, 2000, the
amended the report on Form 8-K/A-2 to provide certain required pro forma
combined financial information in connection with the acquisition of
GeneralSearch.com, Inc.
7
<PAGE> 25
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TELESERVICES INTERNET GROUP INC.
Dated: November 20, 2000 /s/ Robert P. Gordon
-------------------------------------
Robert P. Gordon, Chairman
Dated: November 20, 2000 /s/ Paul W. Henry
-------------------------------------
Paul W. Henry, Chief Financial Officer
8
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
2.8 Agreement and Plan of Reorganization between
TeleServices Internet Group Inc. and GeneralSearch.com,
Inc., dated August 22, 2000. (Incorporated by reference
to Exhibit 2.8 of the Company's Form 8-K dated August
23, 2000 and filed on August 30, 2000).
3.6 Bylaws as restated April 22, 1999. (Incorporated by
reference to Exhibit 3.6 of the Company's Registration
Statement on Form SB-2 (file no. 333-78077) filed on
May 7, 1999).
3.9 Articles of Incorporation, as amended on June 14, 2000,
and currently in effect. (Incorporated by reference to
Exhibit 3.9 of the Company's Current Report on Form 8-K
dated June 14, 2000 and filed June 15, 2000).
4.8 Form of Securities Purchase Agreement for private
placement of Series A Convertible Preferred Stock which
commenced in August 1999. (Incorporated by reference to
Exhibit 4.8 of the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999.)
4.9 Form of Series A Common Stock Purchase Warrant issuable
upon conversion of Series A Convertible Preferred
Stock. (Incorporated by reference to Exhibit 4.9 of the
Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999.)
4.11 8% Convertible Debenture due December 31, 2000, issued
by TeleServices Internet Group Inc. to Ladenburg
Thalmann & Co., dated August 23, 2000 (Incorporated by
reference to Exhibit 4.11 of the Company's Form 8-K
filed on August 30, 2000).
4.12 Registration Rights Agreement by and between
TeleServices Internet Group Inc. and Ladenburg Thalmann
& Co. Inc., dated August 23, 2000 (Incorporated by
reference to Exhibit 4.12 of the Company's Form 8-K
filed on August 30, 2000).
10.9 Employment Agreement between the Company and Robert P.
Gordon dated December 4, 1998. (Incorporated by
reference to Exhibit 10.9 of the Company's Form 10-KSB
for the fiscal year ended December 31, 1998 and filed
on March 31, 1999).
10.16 TSIG.com Incentive Stock Plan dated December 17, 1999.
(Incorporated by reference to Exhibit 10.16 of the
Company's Registration Statement on Form S-8 (file no.
333-32548) filed March 15, 2000).
10.17 Employment Agreement between the Company and Joseph K.
Keegan dated December 6, 1999. (Incorporated by
reference to Exhibit 10.17 of the Company's Annual
Report on Form 10-KSB for the year ended December 31,
1999.)
10.18 Employment Agreement between the Company and Richard H.
Wheeler dated December 6, 1999. (Incorporated by
reference to Exhibit 10.18 of the Company's Annual
Report on Form 10-KSB for the year ended December 31,
1999.)
10.20 Agreement to Serve as a Director between the Company
and Frank Ragano dated September 29, 1999.
(Incorporated by reference to Exhibit 10.20 of the
Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999.)
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10.21 TSIG.com 2000 Stock Plan dated July 14, 2000.
(Incorporated by reference to Exhibit 10.21 of the
Company's Registration Statement on Form S-8 (file no.
333-41716) filed July 19, 2000).
10.22 Consulting Agreement between the Company and Paul W.
Henry dated May 15, 2000. (Incorporated by reference to
Exhibit 10.22 of the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 2000).
27 Financial Data Schedule. (Filed herewith.)
</TABLE>
