<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 23, 2000
TELESERVICES INTERNET GROUP INC.
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(Exact name of registrant as specified in its charter)
Florida 59-2773602
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Second Avenue South, Suite 1000, St. Petersburg, Florida 33701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (727) 895-4410
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(Former name or former address, if changed since last report.)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
AGREEMENT AND PLAN OF REORGANIZATION. On August 30, 2000, the Registrant
reported on Form 8-K that it executed an Agreement and Plan of Reorganization
("Agreement") with GeneralSearch.com, Inc., a Minnesota corporation ("GSCI") and
certain stockholders of GSCI on August 23, 2000, pursuant to which the
Registrant acquired 84.7826% of the issued and outstanding shares of common
stock of GSCI on that date, and undertook to provide the required financial
statements by filing an amendment to the Form 8-K. On November 6, 2000, a Form
8-K/A-1 was filed to provide the audited financial statements of GSCI as of
December 31, 1999, and the unaudited financial statements of GSCI as of June 30,
2000. This Form 8-K/A-2 is being filed to provide the accompanying unaudited
proforma financial information, combining the Registrant and GSCI.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired. The financial statements
of GeneralSearch.com, Inc. were previously provided with the Form 8-K/A-1 filed
November 6, 2000.
(b) Pro Forma Financial Information. The required pro forma financial
information is provided herewith, commencing on page P-1 which follows the
signature page.
(c) Exhibits. None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TELESERVICES INTERNET GROUP INC
By: /s/ Robert P. Gordon
-----------------------------------------
Robert P. Gordon, Chairman
Date: November 17, 2000
<PAGE> 3
TELESERVICES INTERNET GROUP INC.
CONTENTS
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Explanatory Statement P-1 - P-2
Balance Sheet as of June 30, 2000 P-3 - P-5
Statement of Operations for the six months ended June 30, 2000 P-6
Statement of Operations for the year ended December 31, 1999 P-7
Notes to Financial Statements P-8
</TABLE>
<PAGE> 4
TELESERVICES INTERNET GROUP INC.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Explanatory Statement
The following unaudited pro forma combined financial statements of the
TeleServices Internet Group Inc. ("TSIG") includes the historical financial
statements of TSIG as of and for the fiscal year ended December 31, 1999 (its
most recent year end prior to the business combination) and as of and for the
six months ended June 30, 2000, the historical financial statements of
GeneralSearch.Com, Inc. ("GeneralSearch") for the period from inception (May 1,
1999) through December 31 1999 and the six months ended June 30, 2000 and the
application of pro forma adjustments to those financial statements to reflect
the transaction described below which gives effect to this transaction as if it
had occurred on January 1, 1999.
Upon the consummation of the business combination described in the Form 8-K
dated August 23, 2000 filed by TSIG on August 30, 2000, the former stockholders
of GeneralSearch obtained approximately 55% of the voting rights of TeleServices
Internet Group Inc. ("TSIG"). Although GeneralSearch became a subsidiary of
TSIG, the transaction was accounted for as a purchase of TSIG by GeneralSearch
(a reverse acquisition in which GeneralSearch is considered the acquirer for
accounting purposes) since the stockholders of GeneralSearch obtained a majority
of the voting rights of TSIG as a result of this transaction. Accordingly, the
historical financial statements of TSIG for the periods prior to the time of the
transaction are those of GeneralSearch.
Management believes that consideration, other than stock consideration, provides
the best evidence of the total fair value given for the acquisition. Therefore,
a purchase price of $7,003,153 was computed by using the total liabilities of
TSIG, including the (8%) convertible debenture totaling $2,650,000 issued for
payment of financial advisory fees related to the business combination. TSIG had
certain employee and non-employee options outstanding on the transaction date.
No value was attributable to the accounting treatment of the in substance
exchange of GeneralSearch options for TSIG options. The excess of the purchase
price over the fair value of the net assets acquired totaled $6,378,897 and has
been recorded subsequent to June 30, 2000 as goodwill that will be amortized on
a straight line basis over five years.
The pro forma adjustments are based on estimates and certain assumptions that
management believes are reasonable under the circumstances. The actual
allocation of the purchase price to assets and liabilities of TSIG may differ
from that reflected in the unaudited June 30, 2000 historical financial
statements after a more extensive review of the fair market values of the assets
and liabilities has been completed as of the acquisition date. When such a
review is completed, a portion of the purchase price may be ascribed to
intangible assets (other than goodwill) that have shorter amortization lives
than the life ascribed to goodwill in preparing the accompanying pro forma
financial statements. Thus, the resulting incremental amortization charges, if
any, from that portion of the purchase price ascribed to other intangible assets
could be materially different from the amortization expense presented in the pro
forma financial statements.
The accompanying pro forma combined financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Companies as a going concern. However, the Companies have
sustained recurring operating losses since their inception and have a working
capital deficit. Management is attempting to raise additional capital. In view
of these matters, realization of certain assets in the accompanying pro forma
combined balance sheet is dependent upon continued operations of the Companies,
which in turn is dependent upon the Companies ability to meet their financial
requirements, raise additional capital, and the success of its future
operations. Management believes that its ability to raise additional capital
provides the opportunity for the Companies to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
See accompanying notes to unaudited pro forma combined financial statements
P-1
<PAGE> 5
The pro forma combined financial statements are derived from, and should be read
in conjunction with, the companies' historical financial statements set forth in
Item 7 (a) and Form 10-QSB filed by TSIG for the quarter ended June 30, 2000.
The pro forma combined financial statements do not purport to be indicative of
the results of operations or financial position which would have actually been
reported had the transaction been consummated on the dates indicated, or which
may be reported in the future.
See accompanying notes to unaudited pro forma combined financial statements
P-2
<PAGE> 6
TeleServices Internet Group Inc.
Unaudited Pro Forma Combined
Balance Sheet
<TABLE>
<CAPTION>
As of
-------------------------------------------------------------
Historical Pro Forma
---------------------------- -------------------------------
June 30, 2000 June 30, 2000
------------- -------------
TSIG GeneralSearch Adjustments As Adjusted
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 11,501 $ 3,594,945 $ -- $ 3,606,446
Cash, restricted 30,000 -- -- 30,000
Notes receivable, related party -- 900,000 (700,000)(4) 200,000
Interest receivable -- 5,348 (5,348)(7) --
Prepaid expense -- 28,961 -- 28,961
Other current assets 122,787 -- -- 122,787
------------ ------------ ------------ ------------
Total current assets $ 164,288 $ 4,529,254 $ (705,348) $ 3,988,194
------------ ------------ ------------ ------------
Officer loan receivable, net 161,138 -- -- 161,138
Equipment, net of accumulated depreciation 307,566 179,017 -- 486,583
Goodwill -- -- 3,728,877 (2) 6,378,877
Capitalized software development costs -- 263,136 -- 263,136
Other assets 6,948 -- -- 6,948
------------ ------------ ------------ ------------
Total assets $ 639,940 $ 4,971,407 $ 5,673,529 $ 11,284,876
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements
P-3
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 3,406,222 $ 33,086 $ -- $ 3,439,308
Loans payable, related party 705,348 -- (705,348)(7) --
Notes payable, current portion 241,563 -- -- 241,563
Convertible debentures -- -- 2,650,000 (1) 2,650,000
------------ ------------ ------------ ------------
Total current liabilities 4,353,133 33,086 1,944,652 6,330,871
------------ ------------ ------------ ------------
Long-term liabilities:
Notes payable, current portion 15,684 -- -- 15,684
Minority interest -- -- 740,749 (5) 740,749
------------ ------------ ------------ ------------
Total liabilities $ 4,368,817 $ 33,086 $ 2,685,401 $ 7,087,304
------------ ------------ ------------ ------------
Commitments and Contingencies:
Stockholders' equity (deficit):
Preferred stock, $2.00 stated value 1,250 -- -- 1,250
10,000,000 shares authorized
1,250,000 issued and outstanding
Preferred stock, authorized
50,000,000 shares authorized,
no shares issued and outstanding -- -- -- --
Common stock,$.0001 par value,
300,000,000 shares authorized,
28,163,415 shares issued
and outstanding at June 30, 2000,
pro forma issued and outstanding
as adjusted 61,866,930 2,816 -- 3,100 (2)
Common stock, no par value 270 (2) 6,186
100,000,000 shares authorized
11,482,300 shares issued
and outstanding -- 9,139,775 (9,139,775)(2) --
Additional paid-in capital 54,615,072 382,000
(45,460,633)(2)
(740,749)(5) 8,795,690
Deferred compensation -- (102,900) 102,900 (2) --
Treasury stock, 13,130 shares at cost (125,000) -- -- (125,000)
Accumulated deficit (58,223,015) -- 58,223,015 (2) --
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements
P-4
<PAGE> 8
<TABLE>
<S> <C> <C> <C> <C>
Accumulated deficit during
development stage -- (4,480,554) -- (4,480,554)
------------ ------------ ------------ ------------
Total Stockholders equity (deficit) (3,728,877) 4,938,321 2,988,128 4,197,572
------------ ------------ ------------ ------------
Total Liabilities and
Stockholders' equity $ 639,940 $ 4,971,407 $ 5,673,529 $ 11,284,876
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements
P-5
<PAGE> 9
TeleServices Internet Group Inc.
Unaudited Pro Forma Combined
Statement of Operations
<TABLE>
<CAPTION>
Six Months Ended
---------------------------------------------------------------
Historical Pro Forma
----------------------------- -----------------------------
June 30,2000 June 30, 2000
------------ --------------
TSIG General Search Adjustments
------------ -------------- -----------------------------
<S> <C> <C> <C> <C>
As Adjusted
-----------
Revenues $ 107,233 $ -- $ -- $ 107,233
------------ ------------ --------- ------------
Operating expenses:
Selling, general and administrative 11,555,825 4,058,364 -- 15,614,189
Amortization of goodwill -- -- 637,888(3) 637,888
Depreciation 173,088 27,950 -- 201,038
------------ ------------ --------- ------------
Total operating expenses 11,728,913 4,086,314 637,888 16,453,115
------------ ------------ --------- ------------
Net loss from operations (11,621,680) (4,086,314) (637,888) (16,345,882)
Other income (expense)
Interest income 25,502 39,014 -- 64,516
Interest expense (117,731) -- (106,000)(1) (223,731)
Other 12,875 158 -- 13,033
------------ ------------ --------- ------------
Net loss (11,701,034) (4,047,142) (743,888) (16,492,064)
Preferred Stock dividends (18,812,334) -- -- (18,812,334)
------------ ------------ --------- ------------
Net loss applicable to Common Stock $(30,513,368) $ (4,047,142) $(743,888) $(35,304,398)
============ ============ ========= ============
Basic and diluted loss per common share
applicable to common stock (1.134) (.582)
------------ ------------
Weighted Average Shares Outstanding 26,911,736 60,615,251
============ ============
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements
P-6
<PAGE> 10
TeleServices Internet Group Inc.
Unaudited Pro Forma Combined
Statement of Operations
<TABLE>
<CAPTION>
---------------------------------------------------------------
Historical Pro Forma
---------------------------- -------------------------------
Period from
inception
(May 1, 1999)
Year Ended through
Dec. 31, 1999 Dec. 31, 1999
------------ -------------
TSIG GeneralSearch Adjustments As Adjusted
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 395,767 $ -- $ $ 395,767
------------ ------------ ------------ ------------
Operating expenses:
Selling, general and administrative 10,148,956 420,874 -- 10,569,830
Amortization of goodwill -- -- 1,275,776(3) 1,275,776
Depreciation 234,009 13,333 -- 247,342
------------ ------------ ------------ ------------
Total operating expenses 10,382,965 434,207 1,275,776 12,092,948
------------ ------------ ------------ ------------
Net loss from operations (9,987,198) (434,207) (1,275,776) (11,697,181)
Other income (expense)
Interest income 3,342 444 -- 3,786
Interest expense (214,052) (220) (212,000)(1) (426,272)
Discounts on stock conversions (2,815,143) -- -- (2,815,143)
Other -- 571 -- 571
------------ ------------ ------------ ------------
Net (loss) from continuing operations (13,013,051) (433,412) (1,487,776) (14,934,239)
Discontinued operations
Loss from operations of VSI (161,988) -- -- (161,988)
Gain on bankruptcy of VSI 4,541,689 -- -- 4,541,689
------------ ------------ ------------ ------------
Total gain from discontinued operations 4,379,701 -- 4,379,701
------------ ------------ ------------ ------------
Net loss $ (8,633,350) $ (433,412) $ (1,487,776) $(10,554,538)
============ ============ ============ ------------
Net loss per share $ (.065) $ (.224)
============ ============
Weighted Average Shares Outstanding 13,332,067 47,035,582
============ ============
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements
P-7
<PAGE> 11
TeleServices Internet Group Inc.
Notes to Unaudited Pro Forma Financial Statements
Footnote A:
The following adjustments were made to give effect to the business combination
dated August 23, 2000 and effective as of August 31, 2000 as if the business
combination had occurred on January 1, 1999 for purposes of the Pro forma
Statement of Operations and June 30, 2000 for the Pro Forma Balance Sheet:
1) This entry gives effect to the 8% convertible debenture issued as
compensation for services related to the business combination. Interest
expense at 8% has been recorded as if the convertible debt was outstanding
for the periods presented.
2) This entry gives effect to the elimination of the historical equity
accounts of GeneralSearch and recording goodwill related to the excess of
liabilities over assets of TSIG as of the date of this business
combination.
3) This entry gives effect to the amortization of goodwill for 12 months ended
December 31, 1999 and the six-month period ended June 30, 2000,
respectively based on a five year amortization period.
4) This entry eliminates the intercompany account balances between TSIG and
GeneralSearch.
5) This entry records the 15% minority interest in GeneralSearch.
The business combination has been accounted for as a reverse acquisition of TSIG
by GeneralSearch since the former controlling shareholders of GeneralSearch own
approximately 55% of TSIG after the business combination.
Footnote B:
The combined pro forma financial statements include $6,378,877 of goodwill after
the business combination being accounted for as a reverse acquisition. An
uncertainty exists with respect to the recoverability of this goodwill from
future earnings, if any, of TSIG, the ultimate resolution of which cannot
presently be determined. The pro forma financial statements are unaudited and
the ultimate accounting for this goodwill may eventually be changed subject to
accounting research currently in progress regarding this matter, including the
possibility that all or part of this goodwill may be written off if it is
determined that there is permanent impairment. The timing of this potential
write off, if any, cannot presently be determined. Readers of this pro forma
financial statement should be aware of the material uncertainty related to the
accounting treatment of this transaction, which may be materially changed in the
future.
P-8
