SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 24, 2002
Commission File Number: 000-28005
MetaSource Group, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 88-0422028
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
40 Exchange Place, Suite 1607, New York, New York 10005
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(Address of principal executive offices) (Zip Code)
(646) 805-5141
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(Registrant's Telephone Number, Including Area Code)
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(Former name, if changed since last report)
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(Former Address and Telephone Number of Principal Executive Offices)
ITEM 2. DISPOSITION OF ASSETS.
Merger of MSAC and MSS.
On July 12, 2002 ("Closing Date"), Meta Source Acquisition Corp., a Delaware
corporation and our wholly-owned subsidiary ("MSAC") merged with MetaSource
Systems, Inc., a Delaware corporation ("MSS"). MSAC was formed by us for the
purpose of effectuating a merger with MSS. The merger transaction between MSS
and MSAC was consummated pursuant to an Agreement and Plan of Merger dated April
24, 2002 (the "Merger Agreement"). Prior to the MSS/MSAC Merger and in an effort
to satisfy the conditions of the Merger Agreement, MSS had entered into
agreements to acquire certain entities: Digit Digital Experiences Limited, a
United Kingdom corporation ("Digit"), Global Systems and Technologies Corp., a
Virginia corporation ("GSS"), PFA Research Limited, a UK corporation ("PFAR")
and Prime Marketing Publications Limited, a UK corporation ("PMP"), which MSS
believed complemented its business of providing computer solutions and
consulting.
As of December 24, 2002, we have decided not to close three of these
acquisitions: PMP, PFAR, and GSS. In the case of PMP and PFAR, our primary
reason not closing these acquisitions was a downturn in the business prospects
of these companies as our audit was being performed. In the case of GSS, the
primary reason not to close the transaction was incomplete financial records as
determined in our audit process. We were also having difficulty in receiving
cooperation from GSS.
In performing our due diligence on these companies, we collected and verified
information regarding financial performance and liability exposure. We further
relied on our audit for final confirmation of all information we collected. We
agreed to value our acquisitions solely on the results of our audit. Because our
audit reflected declining financial performance, we believe we are under no
obligation to give consideration for the acquisitions.
We decided to not to close the transaction to acquire PMP because PMP was losing
significant amounts of money and PMP management had recently indicated to us
that sales visibility remained low. Our management decided it was in the best
interest of the shareholders to terminate our relationship with PMP in order to
avoid significant losses. We believe our earnings are higher as a result of not
closing this transaction. Prior to terminating our relationship with PMP, we had
lent and invested over $300,000 to PMP and its principals. Our management
intends to pursue all appropriate measures to gain recourse to these funds.
We decided not to close the transaction acquiring PFAR for the same reasons
detailed above for PMP. PFAR was losing relatively significant amounts of money
and sales visibility remained low for the foreseeable future. Our management
decided it was in the best interest of the shareholders to terminate our
relationship with PFAR to avoid significant losses. We believe our earnings are
higher as a result of not closing the transaction to acquire PFAR.
Prior to terminating our relationship with PFAR, we lent and invested over
$15,000 to PFAR and its principals. We decided not to continue funding such
losses and we will pursue all appropriate measures to gain recourse to these
funds.
We decided not to close the transaction to acquire GSS because our audit of
GSS's records revealed incomplete information. Our management decided it was in
the best interest of the shareholders to not close on the acquisition in order
to limit potential undiscovered liabilities. GSS also failed to cooperate with
our audit, as required by the GSS Acquisition Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The financial information required by this Item will be filed by amendment no
later than 75 days following the closing date of the Agreements.
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, thereunto duly authorized.
MetaSource Group, Inc.
January 7, 2003 By: /s/ Courtney Smith
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Courtney Smith, President