Technology Service Group, Inc.
Ticker: TSGI 20 Mansell Court East, Suite 200
Exchange: NASDAQ-Small Cap Market Roswell, Georgia 30076
Industry: Manufacturing (770) 587-0208

Type of Shares:Common Shares Filing Date:12/21/95
U.S. Shares:1,000,000 Offer Date:5/10/96
Non-U.S. Shares:0 Filing Price:$6.00
Primary Shares:1,000,000 Offer Price:$9.00
Secondary Shares:0 Gross Spread:$0.81
Offering Amount: $6,000,000 Selling:$0.40
Expenses:$840,000 Reallowance:$0.10
Shares Out After:4,500,000

ManagerTierPhone
Brookehill Equities, Inc.Lead Manager (212) 593-5310
Joseph Stevens & Company, L.P.Co-manager (212) 361-3000

Auditor: Price Waterhouse
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
4/1/94 12/29/95 12/29/95
Revenue:$31.05$23.68Assets:$22.29
Net Income:-$5.49$0.66Liabilities:$19.21
EPS:$0.17Equity:$3.08

Note: Dollar amounts are in U.S. millions; Audited figures expressed as full year,
unaudited figures are partial year

Business Description
The company is engaged in the design, development, manufacture and marketing of public communication products consisting of payphone components, electronic wireline payphone products, microprocessor-based wireline and wireless payphone products. The company is also engaged in related payphone software management systems. The company's products include what is referred to in the payphone industry as "smart" payphone products sold under the "Gemini", "Inmate", "Gemstar" and "GemCell" trademarks. Smart payphone products are based upon microprocessor technology and perform a variety of functions, including calling card, debit card and credit card control, data storage, call progress detection, call rating and maintenance, diagnostic and coin administration functions. The company is also a provider of payphone and payphone component repair, refurbishment and upgrade conversion services to the regulated telephone operating companies in the United States, which consist of the operating subsidiaries of the seven Regional Bell Operating Companies and other local exchange carriers. The company markets its products and services primarily to the seven RBOCs in the United States and to inter-exchange carriers and cellular providers in certain international markets.

Use of Proceeds
Proceeds from the offering will be used to repay outstanding indebtedness under its revolving credit facility in order to reduce its interest expense. The remaining proceeds, if any, together with financing available to the company under its revolving credit facility will be used i) for working capital and other general corporate purposes ii) to repay the Affiliate Notes iii) for research and development, iv) to expand sales and marketing efforts v) to improve management information systems and purchase capital equipment and vi) to repay an outstanding bank term note.

Last updated: 12/8/96

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