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
TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(For the Quarter ended March 31, 1997)
Commission File Number 1-12689
Genisys Reservation Systems, Inc. And Subsidiary
(formerly Robotic Lasers, Inc.)
(Exact Name of registrant as specified in its charter)
New Jersey 22-2719541
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification no.)
2401 Morris Avenue, Union, New Jersey 07083
(Address of principal executive offices) (Zip Code)
(908) 810-8767
Issuer's Telephone Number including Area Code
Checkwhether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter periods that the registrant 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 registrant 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 March 31, 1997: 4,330,594
shares of Common Stock (as adjusted for stock split)
Transitional Small Business Disclosure Format (check one)
Yes X No
1
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
( A development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Period From
March 7, 1994
(Commencement of
Three Months Ended Development Stage
March 31 March 31 Activities ) to
1997 1996 March 31, 1997
-------------- ---------------- --------------
REVENUES AND EXPENSES DURING
THE DEVELOPMENT STAGE
Revenue $ -- $ -- $ --
--------------- -------------------- --------
Expenses:
General and Administrative 215,017 178,859 1,572,713
Depreciation and Amortization 31,872 18,662 148,380
Interest Expense, net 46,818 22,148 217,617
------------ ---------------- -------------
293,707 219,669 1,938,710
----------- --------------- -----------
NET (LOSS) INCURRED DURING
THE DEVELOPMENT STAGE ($293,707) ($ 219,669) ($1,938,710)
========== =============== ============
NET (LOSS) PER COMMON SHARE ($ .09 ) ($ .08 ) ($ .83 )
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,420,594 2,816,075 2,326,427
========== ================= ===========
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
A Development Stage Enterprise
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
March December
31, 1997 31, 1996
-------- --------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,678,552 $ 91,548
Prepaid Expenses 1,235 1,081
-------------- -------------
Total Current Assets 4,679,787 92,629
EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION OF $80,221and $65,102 226,205 235,285
OTHER ASSETS
Computer software costs, less accumulated
amortization of $45,748 and $35,215 332,638 312,171
Deferred offering costs -- 153,210
Debt issue costs, less accumulated amortization
of $15,653 and $10,957 40,697 45,393
Deposits and Other 64,850 64,910
-------------- -----------
$ 5,344,177 $ 903,598
----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 214,089 $ 161,282
Accounts payable and accrued expenses 605,576 304,490
Due to related parties 36,152 29,652
Accrued interest payable - related parties 117,831 95,748
Accrued consulting fees - related parties 130,067 101,500
------------ ----------
Total current liabilities 1,103,715 692,672
LONG-TERM DEBT:
Long-term debt, less current maturities 954,219 1,009,757
10% Promissory notes payable 563,500 563,500
Convertible notes payable --- 30,000
------------------ -----------
Total Liabilities 2,621,434 2,295,929
------------ ---------
COMMITMENTS:
STOCKHOLDERS' EQUITY (DEFICIENCY):
Preferred Stock, $.0001 Par Value: 25,000,000
Shares Authorized; None Outstanding
Common Stock, $.0001 Par Value; 75,000,000
Shares Authorized; 4,330,594 and 3,280,594
Shares Issued and Outstanding 433 328
Additional Paid in Capital 4,661,020 252,344
Deficit Accumulated During the Developmental Stage ( 1,938,710) (1,645,003)
------------ ----------
Total Stockholders' Equity (Deficiency) 2,722,743 (1,392,331)
------------ ----------
$ 5,344,177 $ 903,598
=========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
2
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Deficit
Accumulated
Additional During The
Common Stock Paid-In Development
Total Shares Par Value Capital Stage
BALANCE - DECEMBER 31, 1996 ($1,392,331) 3,280,594 $328 $ 252,344 ($1,645,003)
CONTRIBUTION TO CAPITAL BY
STOCKHOLDER/OFFICER 19,700 19,700
PROCEEDS FROM PUBLIC OFFERING
OF COMMON STOCK AND
WARRANTS, LESS RELATED
COSTS OF $1,264,419 4,359,081 1,035,000 103 4,358,978
CONVERSION OF CONVERTIBLE
NOTES PAYABLE TO
COMMON STOCK 30,000 15,000 2 29,998
NET LOSS ( 293,707) --- --- --- ( 293,707)
----------- ----------------- --------- ------------------ ---------
BALANCE AT MARCH 31, 1997 $2,722,743 4,330,594 $433 $4,661,020 ($1,938,710)
========== ========= ---- ---------- ------------
</TABLE>
See Accompanying Notes to Financial Statements
4
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Period from
(Commencement of
Development
Stage Activities)
Three Months Ended Three Months Ended Through
March 31, March 31, March 31,
1997 1996 1997
-------------------------- ---------------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ($ 293,707) ( $219,669) ($1,938,710)
Adjustment to Reconcile Net (Loss) to Net Cash
Flows from Operating Activities:
Depreciation and Amortization 31,872 18,662 148,380
Contribution of services rendered to capital -- 49,600
Changes in operating assets and liabilities:
Prepaid expenses ( 154) 703 ( 1,235)
Other Assets -- ( 1,979) ( 65,564)
Accounts Payable and Accrued Expenses 351,736 83,977 839,387
------------ ------------ -------------
NET CASH FLOWS FROM
OPERATING ACTIVITIES 89,747 ( 118,306) ( 968,142)
------------- ------------ --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment and Software ( 37,039) ( 55,975) ( 684,812)
------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans and advances from related parties 6,500 -- 36,152
Proceeds from Issuance of Notes Payable 70,000 75,00 1,025,000
Payments under Notes Payable ( 65,000) -- ( 65,000)
Payments under Computer Equipment Leases ( 9,195) ( 8,201) ( 72,271)
Proceeds from sale and lease-back -- 25,117 294,644
Proceeds from Issuance of Convertible Notes -- -- 30,000
Gross Proceeds from public offering of
Common Stock and Warrants 5,623,500 -- 5,623,500
Proceeds from sale of Common Stock -- 60,000 110,000
Contribution to capital - stockholder/officer 19,700 -- 96,400
Proceeds from issuance of 10% Promissory
Notes and Related Warrants -- -- 575,000
Costs paid upon issuance of Promissory
Notes and Related Warrants -- -- (57,500)
Deferred offering costs ( 1,111,209) -- ( 1,264,419)
------------ -------------------- ------------
NET CASH FLOWS FROM
FINANCING ACTIVITIES 4,534,296 151,916 6,331,506
----------- ------------ -----------
NET CHANGE IN CASH 4,587,004 ( 22,365) 4,678,552
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 91,548 22,613 --
------------- --------------- -------------
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 4,678,552 $ 24 $4,678,552
=========== ============== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ $ $ 46,213
----- --------- ------------
Net liabilities assumed
in reverse acquisition $ -- $ -- $ 14,087
----------- ------------------ ------------
Conversion of notes payable into common stock $ 30,000 $ -- $ 50,109
============= ================ ============
</TABLE>
See Accompanying Notes to Financial Statements
5
<PAGE>
ENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 Basis of Presentation
The consolidated balance sheet at the end of the preceding
fiscal year has been derived from the audited consolidated balance sheet
contained in the Company's Form 10-KSB and is presented for comparative
purposes. All other financial statements are unaudited. In the opinion of
management, all adjustments which include only normal recurring adjustments
necessary to present fairly the financial position, results of operations and
cash flows of all periods presented have been made. The results of operations
for interim periods are not necessarily indicative of the operating results for
the full year.
Footnote disclosures normally included in financial statements
prepared in accordance with the generally accepted accounting principles have
been omitted in accordance with the published rules and regulations of the
Securities and Exchange Commission. These consolidated financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-KSB for the most recent fiscal year.
Note 2 Activities of the Company
The Company is a development stage Company and is developing a
computerized limousine reservation and payment system for the business traveler.
The Company anticipates that the proprietary software being developed will
enable a system of limousine reservations to be completely computerized and
operate without human intervention.
The Company has generated no revenues and has no commercial
operations to date. The Company has been unprofitable since inception and
expects to incur additional operating losses. The Company expects to commence
generating revenue from operations during the fiscal year ending December 31,
1997.
Note 3 Long-term Debt
Notes Payable --- Stockholder --- In February 1995, the
Company signed an agreement with a then unrelated party pursuant to which the
Company borrowed $500,000 as evidenced by a series of Convertible Promissory
Notes. In September 1995, the Convertible Promissory Notes were converted into
841,455 shares of the Company's common stock and two Promissory Notes with
principal amounts of $475,000 and $25,000, respectively. Such 841,455 shares had
been contributed back to the Company by its original stockholders who acquired
the shares in March 1994. For accounting purposes, such transaction has been
treated as a 2 for 3 reverse stock split. The common stock issued upon
conversion and the related debt discount ($13,406) have been recorded based upon
their estimated fair values and that of the notes.
The $475,000 note is to be repaid in twelve equal quarterly
installments commencing two years from the date of such note. This note bears
interest at nine percent (9%) per annum payable quarterly. The $25,000
promissory note accrues interest at nine percent (9%) per annum (payable
quarterly) and is convertible at the sole option of the note holder into 266,667
shares of common stock of the Company. Unless previously converted, this $25,000
note will be repaid by the Company in twelve equal quarterly installments
commencing on April 1, 1998.
In December 1995, the Company and this stockholder signed an additional
loan agreement
6
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whereby the stockholder agreed to loan the Company up to an additional $250,000.
In December 1995, the stockholder loaned the Company $150,000 and, during the
first quarter of 1996, the stockholder loaned the Company an additional
$100,000. In November 1996, the stockholder converted these additional loans,
totaling $250,000, into two 9% term notes ($237,500 and $12,500) and 420,728
shares of common stock of the Company. The common stock issued upon conversion
and the related debt discount ($6,703) have been recorded based upon their
estimated fair values and that of the notes. The $237,500 note is to be repaid
in 12 equal quarterly installments commencing two (2) years from the date of
such note. The $12,500 note is convertible into 133,333 shares of common stock
of the Company. Unless previously converted, this $12,500 note will be repaid by
the Company in twelve equal quarterly installments commencing on April 1, 1998.
Total borrowings from the stockholder totaled $750,000 at
December 1996. The Company has not paid any interest under these loan agreements
to date. In February 1997, the stockholder agreed that interest payments on its
notes, which were in default, would be deferred until September 1997. The
stockholder also waived any defaults on the notes through February 1997.
Notes Payable --- Related Party --- During November and
December 1996, the Company and Loeb Holding Corporation signed four 18 month
Promissory Notes whereby Loeb Holding Corporation loaned the Company a total of
$210,000. Such notes bear interest at 10% and mature in May and June 1998.
Note 4 Computer Equipment Leases
In September 1995, January 1996 and December 1996, the Company
entered into sale and lease-back arrangements with LTI Ventures Leasing
Corporation (LTI) whereby the Company sold the bulk of its computer hardware and
commercially purchased software to LTI for amounts totaling $295,000 and agreed
to lease back such equipment for initial terms ranging from 24 to 30 months at a
monthly rental totaling $11,960.
As a consideration for entering into the aforementioned
agreements with the Company, LTI was granted warrants to purchase a maximum of
22,098 shares of Common Stock of the Company at an exercise price of $2.00 per
share.
Note 5 Stockholders' Equity
Cancellation of Shares --- In August 1996, the Company gave
notice to one of its former officers, Mr. Steven E. Pollan, that it was
canceling the 333,216 shares of Common Stock issued to him at the inception of
Corporate Travel Link, Inc. for services he was to have provided. The Company
believes that Mr. Pollan never provided such services; Mr. Pollan has informed
the Company, however, that he will contest any attempt to cancel his shares.
(See Note 6 for information concerning litigation commenced by Mr. Pollan).
Pending return of the shares, they are considered outstanding for all periods
presented herein.
Public Offering of Securities --- On March 26, 1997, the
Company consummated a public offering of its securities consisting of 1,035,000
shares of Common Stock at $5.00 per share, 1,725,000 Class A Redeemable Warrants
at $.20 per Class A Redeemable Warrant and 1,035,000 Class B Redeemable Warrants
at $.10 per Class B Redeemable Warrant. Total proceeds from the public offering,
net of related costs of $1,264,419, were $4,359,081.
Each redeemable warrant is exercisable for a period of 48
months, commencing September 20, 1997 and entitles the holder to acquire one
share of common stock at $5.75 (Class A) or $6.75 (Class B) per share.
Commencing March 20, 1998, the Company will have the right at any time to redeem
all, but not less than all, of the Class A or Class B warrants at a price equal
to $.20 per Class A warrant and $.10 per Class B warrant, provided that the
closing bid price of the common stock equals or exceeds $6.25 (Class A) or $7.25
(Class B) per share for any twenty trading days within a period of thirty
consecutive trading days ending on the fifth trading day prior to the date of
the notice of redemption.
7
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Note 6 Contingencies
On February 20, 1997, two individuals filed an action against
the Company, Corporate Travel Link and Robotic Lasers in the Superior Court of
New Jersey seeking, among other things damages in the amount of 8% of any
financing secured by Corporate Travel Link and 5% of the Company's Common Stock
allegedly due for services rendered in connection with the Company's acquisition
of Corporate Travel Link in 1995. The claim for monetary damages is based upon
an alleged written agreement between Corporate Travel Link and plaintiffs, while
the claim for the shares of the Company's Common Stock is based upon alleged
oral representations and promises made by officers of Corporate Travel Link. The
Company believes that the plaintiff's claim are without merit and intends to
vigorously defend the action and to assert numerous defenses in its answer.
On April 17, 1997, a former officer of the Company filed an
action in the United States District Court, District of New Jersey, against the
Company, Corporate Travel Link, the officers of both companies, and various
related parties seeking among other things a declaratory judgment that the
former officer is the owner of the 333,216 shares of Common Stock of the Company
which had been issued to him at the inception of Corporate Travel Link for
services he was to have provided (see Note 5) and for unspecified compensatory
and punitive damages. The Company believes that the plaintiff's claims are
without merit and intends to vigorously defend the action and to assert numerous
defenses and counterclaims in its answer.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company is in the development stage, has not yet generated
any revenues and has no commercial operations to date. The Company has been
unprofitable since inception and expects to incur additional operational losses
over the next several fiscal quarters. The Company does not expect to generate
any revenues from operations until 3rd quarter 1997. As reflected in the
accompanying financial statements, the Company has incurred losses totaling
$1,938,710 since inception and at March 31, 1997, had working capital of
$3,576,072.
Selling, general and administrative expenses were $215,017 for
the three months ended March 31, 1997, as compared to $178,859 during the three
months ended March 31, 1996. Payroll and payroll-related costs decreased
approximately $15,000 during 1997. Cost increases during the 1997 period consist
of consulting fees ($10.00), professional fees ($13,000), insurance costs
($10,000), and other administrative costs ($22,000). Travel costs decreased
$5,000 during the 1997 period.
Liquidity and Capital Resources
The Company's funds have principally been provided from Loeb
Holding Corp. as escrow agent, Loeb Holding Corp., LTI Ventures Leasing
Corporation, a private offering and a public offering, as described below.
In September 1995, Loeb Holding Corp. as escrow agent (Loeb)
agreed to loan the Company up to a maximum of $500,000 as evidenced by two
Promissory Notes dated September 5, 1995, one in the principal amount of
$475,000 and the other in the principal amount of $25,000. In addition, Loeb
loaned the Company an additional $150,000 in December 1995, $80,000 during the
three months ended March 31, 1996, and $20,000 in April 1996. Total loan
proceeds to date are $750,000.
8
<PAGE>
In September 1995, January 1996 and December 1996, the Company
entered into sale and lease-back arrangements with LTI Ventures Leasing
Corporation (LTI) whereby the Company sold the bulk of its computer hardware and
commercially purchased software to LTI. In consideration for the sale, the
Company received a total of $295,000 and agreed to lease back the hardware and
software for initial terms of 24 to 30 months at a monthly rental totaling
$11,960.
Pursuant to a private offering, the Company issued 11.5 units
to various unrelated third parties in May and June 1996. Each $50,000 unit
consists of a $49,000 promissory note and 25,000 Class A redeemable Common Stock
purchase Warrants valued at $1,000 per unit. Each warrant entitles the holder to
purchase one share of the Company's common stock at $5.75 per share. Total
proceeds received from this offering were $575,000 and warrants to purchase
287,500 shares of the Company's common stock were issued.
During November and December 1996, the Company and Loeb
Holding Corporation signed four 18 month Promissory Notes whereby Loeb Holding
Corporation loaned the Company a total of $210,000.
Such Notes bear interest at 10% and mature in May and June 1998.
In February 1997, in order to raise additional working capital
for the Company, Joseph Cutrona, President of the Company, sold a total of 9,850
shares of restricted Common Stock owned by him to six (6) unaffiliated third
parties at a price of $2.00 per share for the total proceeds of $19,700, which
Mr. Cutrona remitted to the Company in the form of a capital contribution. Mr.
Mark A. Kenny used 4925 of his own shares of restricted Common Stock to
reimburse Mr. Cutrona for one-half of the number of shares sold by Mr. Cutrona.
In February and march 1997, the Company borrowed a total of
$65,000 from three unaffiliated third parties pursuant to three eighteen (18)
month Promissory Notes bearing interest of 10% per annum payable at maturity.
These notes which were secured by 16,250 shares of the Company's restricted
Common Stock owned by Joseph Cutrona and 16,250 shares owned by Mark A. Kenny,
were repaid on March 31, 1997.
On March 26, 1997, the Company consummated a public offering
of its securities consisting of 1,035,000 shares of Common Stock at $5.00 per
share, 1,725,000 Class A Redeemable Warrants at $0.20 per Class A Redeemable
Warrant and 1,035,000 Class B Redeemable Warrants at $.10 per Class B Redeemable
Warrant resulting in net proceeds to the Company of $4,657,445.
At March 31, 1997, the Company had cash of $4,678,552 and
working capital of $3,576,072. Management of the Company estimates that it has
sufficient resources to provide for its planned operations of the next twelve
months.
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
NONE
9
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SIGNATURES
Pursuant to 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.
GENISYS RESERVATION SYSTEMS, INC.
(formerly Robotic Lasers, Inc.)
Date: May 13, 1997 Joseph Cutrona
President
Date: May 13, 1997 John H. Wasko
Secretary, Treasurer and
Chief Financial Officer
Date: May 13, 1997 Warren D. Bagatelle
Chairman and Chief
Executive Officer
10
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Company's financial statements for the three months ended March 31,
1997 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,679
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,680
<PP&E> 306
<DEPRECIATION> 80
<TOTAL-ASSETS> 5,344
<CURRENT-LIABILITIES> 1,104
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,723
<TOTAL-LIABILITY-AND-EQUITY> 5,344
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 247
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47
<INCOME-PRETAX> (294)
<INCOME-TAX> 0
<INCOME-CONTINUING> (294)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (294)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> 0
<PAGE>
</TABLE>
