<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number:
July 31, 1996 0-16288
FISHER BUSINESS SYSTEMS, INC.
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(Exact name of small business issuer as specified in its charter
Georgia 58-1366235
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1950 Spectrum Circle, Suite 400, Marietta, Georgia 30067
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (770) 857-4461
-------------------------------
Not Applicable
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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 of 15(d) of the Securities Exchange Act of 1934 during the last 12 months (or
for such shorter period 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
--------- --------
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $.01 Par Value 7,450,046
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Class Outstanding at September 9, 1996
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FISHER BUSINESS SYSTEMS, INC.
CONDENSED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
July 31 January 31
1996 1996
------------- -------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 37,379 $ 177,649
Notes receivable-affiliates (Note C) 971,551 0
Accounts receivable - net 29,355 3,028
Other current assets 0 8,254
---------- ---------
Total current assets 1,038,885 188,931
---------- ---------
Equipment, Furniture and Vehicles
Computer equipment 174,835 143,550
Office furniture and fixtures 64,930 64,930
---------- ---------
239,765 208,480
---------- ---------
Less accumulated depreciation 202,058 197,048
---------- ---------
Net equipment, furniture and vehicles 37,707 11,432
---------- ---------
Net investment in sales type lease 31,484
Other 157,160 55,687
---------- ---------
Total Assets $1,233,752 $ 287,534
========== =========
</TABLE>
The condensed financial statements as of January 31, 1996 were
derived from the audited financial statements at that date.
See notes to condensed financial statements.
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<PAGE> 3
FISHER BUSINESS SYSTEMS, INC.
CONDENSED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' DEFICIT July 31 January 31
1996 1996
----------- ------------
<S> <C> <C>
Current Liabilities
Accounts payable and accrued expenses $ 302,159 $ 360,018
Deferred revenue 103,638 228,405
----------- ------------
Total current liabilities 405,797 588,423
----------- ------------
Convertible promissory notes (Note D) 1,240,000 0
----------- ------------
Shareholders deficit
Preferred stock, par value $.10, authorized
5,000,000 shares, zero and 1,500,000 issued 0 150,000
Common stock, par value $.01, authorized
10,000,000 shares 50,195 48,695
Additional paid-in-capital 8,509,986 8,361,486
Accumulated deficit (8,965,476) (8,854,320)
Less treasury stock at cost (6,750) (6,750)
----------- ------------
Total shareholders' deficit (412,045) (300,889)
----------- ------------
Total liabilities and shareholders' deficit $ 1,233,752 $ 287,534
=========== ============
</TABLE>
The condensed financial statements as of January 31, 1996 were
derived from the audited financial statements at that date.
See notes to condensed financial statements.
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FISHER BUSINESS SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended July 31 1996 1995
------------ -------------
<S> <C> <C>
Revenues $ 238,116 $ 373,072
Cost of Goods Sold 73,428 127,145
------------ -------------
Gross Margin 164,688 245,927
------------ -------------
Expense
Selling, general and administrative 323,864 297,687
Miscellaneous expense (income) 30,210 (17,211)
------------ -------------
Total expenses 354,074 280,476
------------ -------------
Net loss from operations before extraordinary
Item (189,386) (34,549)
Extraordinary income from debt restructuring 78,230 0
------------ -------------
Net Loss $ (111,156) $ (34,549)
============ =============
Loss Per Share of Common Stock $ (0.02) $ (0.01)
============ =============
Weighted Average Shares Outstanding 7,450,046 3,803,171
============ =============
</TABLE>
See Notes to condensed financial statements.
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FISHER BUSINESS SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended July 31, 1996 1995
---- ----
<S> <C> <C>
Revenues $ 123,123 $ 197,957
Cost of Goods Sold 32,425 66,651
---------- ----------
Gross Margin 90,698 131,306
---------- ----------
Expense
Selling, general and administrative 147,048 143,516
Miscellaneous expense (income) 17,799 (17,274)
---------- ----------
Total expenses 164,847 126,242
---------- ----------
Net income (loss) from operations before taxes on income and extraordinary
item (74,149) 5,064
Taxes on income (loss) 0 (750)
Extraordinary item 2,806 750
---------- ----------
Net Income (Loss) $ (71,343) $ 5,064
========== ==========
Net income (loss) per share of common stock $ (.01) $ 0
========== ==========
Weighted Average shares outstanding 7,450,046 4,553,171
========== ==========
</TABLE>
See Notes to condensed financial statements
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FISHER BUSINESS SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended July 31, 1996 1995
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Loss $ (111,156) $ (34,549)
Adjustments to reconcile net income to net
cash provided (used for) operating activities:
Depreciation and amortization 5,010 6,012
Changes in operating assets and liabilities
affecting operations:
Accounts receivable (26,327) (48,084)
Accounts receivable - affiliates (971,551) 0
Certificate of deposit 0 36,586
Other current assets 8,254 (684)
Accounts payable and accrued expenses (57,859) (116,808)
Accrued compensation and benefits 0 (7,506)
Deferred revenue (124,767) (128,550)
-------------- --------------
Net cash provided by (used for) operating activities (1,278,396) (293,583)
-------------- --------------
Cash Flow From Investing Activities
Net sale (purchases) of equipment and furniture (31,285) 0
Repurchase of redeemable stock 0 (170,578)
Organization costs (101,473) 0
Proceed from sales type lease 31,484 0
-------------- --------------
Net cash provided by (used for) investing activities (101,274) (170,578)
-------------- --------------
Cash Flows From Financing Activities
Net proceeds from private placement 1,240,000 0
Proceeds from sale of preferred stock 0 300,000
Proceeds from sale of common stock 0 300,000
-------------- --------------
Net cash provided by (used for) financing activities 1,240,000 600,000
-------------- --------------
(Decrease) Increase in cash and cash equivalents (139,670) 135,839
Cash and Cash Equivalents, at beginning of period 177,649 69,219
-------------- --------------
Cash and Cash Equivalents, at end of period $ 37,979 $ 205,058
============== ==============
</TABLE>
See Notes to condensed financial statements
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Fisher Business Systems, Inc.
Notes to Condensed Financial Statements
(Unaudited)
July 31, 1996
Note A - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article
10 of Regulation S-X. Accordingly,they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These statements should be
read in conjunction with Form 10-KSB for the fiscal year ended January 31,
1996. In the opinion of management, all adjustments considered necessary
for a fair presentation have been made and are of a normal recurring nature.
Operating results for the six month period ended July 31, 1996 are not
necessarily indicative of the results that may be expected for the year
ending December 31,1996.
Note B - Net Loss Per Share of Common Stock
Loss per share for the fiscal periods ended July 31, 1996 and 1995 has been
computed on the weighted average number of shares outstanding. The effects
of common share equivalents have been considered using the treasury stock
method. However, the effects are not material and antidilutive, and they
have been excluded from the calculation.
Note C - Notes Receivable
In connection with its agreement and plan of merger and reorganization with
AUBIS, LLC ("AUBIS") and HALIS, LLC ("HALIS"), the Company has advanced
AUBIS and HALIS $971,551. These notes bear interest at rates ranging from
10% to 12% and are due and payable on the first anniversary of the date of
the advance.
Note D - Convertible Promissory Notes
During the quarter ended April 30, 1996, the Company commenced a private
placement of 7% convertible promissory notes which are due January 15, 1998.
Proceeds from the private placement totalled $1,240,000 at quarter end.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
The Company has embarked upon a strategy of strategic acquisitions to
position the Company to be a leading information technology company in the
healthcare industry. In furtherance of this strategy, the Company has agreed
to merge AUBIS Hospitality Systems, Inc. ("AHS") and AUBIS Systems Integration,
Inc. ("ASI") (collectively, the "AUBIS Subsidiaries"), each a wholly-owned
subsidiary of AUBIS, L.L.C. ("AUBIS") with and into a wholly-owned subsidiary
of the Company (the "Fisher Subsidiary"), pursuant to the Amended and Restated
Agreement and Plan of Merger and Reorganization, dated December 13, 1995, as
subsequently amended (the "AUBIS Agreement"), among AUBIS, the AUBIS
Subsidiaries, certain affiliates of AUBIS, the Company and the Fisher
Subsidiary, in which AUBIS will receive 10,000,000 shares of Common Stock of
the Company (such transaction referred to herein as the "AUBIS Transaction").
In addition, the Company has entered into a Stock Purchase Agreement,
dated as of March 29, 1996, as subsequently amended (the "HALIS Agreement"),
between the Company and HALIS, L.L.C. ("HALIS") and its affiliates, providing
for the acquisition by the Company of HALIS Software, Inc. ("HSI"), a
wholly-owned subsidiary of HALIS, in which HALIS will receive 5,000,000 shares
of Common Stock of the Company (such transaction referred to herein as the
"HALIS Transaction").
The Company has entered into an Agreement and Plan of Reorganization,
dated May 23, 1996 and amended on September 11, 1996, to acquire Advanced
Custom Computer Solutions, Inc. ("ACCS") in exchange for 750,000 shares of
common stock of the Company. ACCS is based in Atlanta, Georgia and is a
provider of medical and dental practice management software to healthcare
professionals and billing services.
The AUBIS, HALIS and ACCS Transactions are collectively referred to
herein as the "Transactions." Consummation of the Transactions is subject,
among other things, to approval of the shareholders of the Company at the 1996
Annual Meeting of Shareholders, scheduled to be held in the fall of 1996. Upon
consummation of the Transactions, the AUBIS subsidiaries, HSI and ACCS will be
wholly-owned subsidiaries of the Company and the Company's corporate name will
be changed to HALIS, Inc.
The Company intends to account for the AUBIS and HALIS Transactions as
a reverse purchase for accounting and financial reporting purposes. Under this
method of accounting, AUBIS and HALIS will be treated as the acquiring
entities. As a result, the historical pre-merger financial statements of the
combined company will be those of AUBIS and HALIS, rather than the Company.
The Company has entered into a letter of intent to acquire a perpetual
non-exclusive license to a proprietary technology asset ("MERAD") from Paul
Harrison Enterprises, Inc. ("PHE"), for a license fee of 10% gross revenues
generated from the MERAD technology and any derivatives thereof by the Company
or any of its affiliates. Consummation of the MERAD transaction is subject to
the negotiation of a definitive acquisition agreement and consummation of the
Transactions. It is anticipated that the MERAD acquisition will be consummated
on the date of consummation of the Transactions.
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<PAGE> 9
FINANCIAL CONDITION
Total assets increased $946,218 or 229% from January 31, 1996 due
primarily to an increase in accounts receivable of $971,551. The increase in
accounts receivable results primarily from the advance by the Company of
$971,551 to AUBIS and HALIS during the period to support their respective
operations. AUBIS's cash needs result, in part, from the loss of a significant
supplier and customer of AHS. This supplier accounted for approximately 54% of
the total revenues of the AUBIS Subsidiaries for the year ended December 31,
1995. The Company was able to fund these advances to AUBIS from the proceeds
of its private placement of 7.0% Convertible Promissory Notes due January 15,
1998 (the "Notes"). The Company received a total of $1,240,000 from this
placement. The Notes are convertible into common stock at the option of the
holder at a conversion price of $1.00 per share.
In an effort to continue to resolve its liquidity problems, the Company
successfully renegotiated terms with many of its vendors which resulted in
reductions of vendor payables of $78,230 during the six months ended July 31,
1996. The vendor renegotiations were conducted periodically on a
vendor-by-vendor basis over a period of time beginning the fourth quarter of
fiscal 1994 and ending the first quarter of fiscal 1997. No unresolved items
are outstanding concerning the Company's liability for the debts. Management
does not believe that these debt restructurings will have a material adverse
impact on the continued availability of vendor credits.
RESULTS OF OPERATIONS
Revenues for the six months ended July 31, 1996 were $238,116, a
decrease of $134,956, or 36%, from the prior period revenues of $373,072.
Revenues for the three months ended July 31, 1996 were $123,123, a decrease of
$74,834, or 38%, from the prior period revenues of $197,957. The decrease in
revenues is primarily attributable to a reduction in software sales. During
the six months ended July 31, 1996, approximately 85% of Fisher's revenues
were from support services and approximately 15% were from system sales. The
increased percentage of revenues from services is a result of Fisher's
inability to sell its restaurant software.
Selling, general and administrative expenses were $323,864 for the six
months ended July 31, 1996 compared to $297,687 for the prior year period.
Selling, general and administrative expenses were $147,048 for the three months
ended July 31, 1996 compared to $143,516 for the prior year period. The
increase was largely due to activities relating to the proposed Transactions.
The Company recorded a net loss of $111,156 for the six months ended
July 31, 1996, as compared to a net loss of $34,549 for the prior year period.
The Company recorded a net loss of $71,343 for the three months ended July 31,
1996, as compared to net income of $5,064 for the prior year period. The net
loss for the 1996 periods was higher as a result of lower revenues, coupled
with higher selling, general and administrative expenses relating to the
Transactions. The net loss for the six months ended July 31, 1996 would have
been greater, but for a benefit of $78,230 of extraordinary income from debt
restructuring.
LIQUIDITY AND CAPITAL RESOURCES
At July 31,1996, the Company had working capital of $633,088, compared
to a deficit of $379,492 at January 31, 1996. The increase in working capital
is principally due to proceeds from the
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<PAGE> 10
private placement of Notes in the first half of fiscal 1997. With the
departure in January 1994 of substantially all of the former Blue Mountain
employees, The Company lost its ability to provide client/server services to
its customers, including MCI. Accordingly, the Company's revenues and cash
flow for the last two fiscal years has been materially adversely affected by
the loss of revenues from its former client/server business. Until such time
as the Transactions can be consummated, the Company's revenue will be limited to
revenue from support contracts with existing customers and sales of its
software and services.
Pending completion of the Transactions and the conversion of the
Company's business to that of a provider of software applications and
technology services to the healthcare industry, the Company has instituted
stringent measures designed to reduce expenses as much as possible consistent
with providing the level of services required by its customers, including a
reduction of the number of personnel. The Company presently employs eight
people.
In the first half of fiscal 1997, the Company completed an offering of
$1,240,000 of 7.0% Convertible Promissory Notes due January 15, 1998 (the
"Notes"). Interest on the Notes is payable quarterly by the Company and the
principal thereof (plus any accrued interest) may, at the option of the holder,
be converted into shares of Common Stock of the Company at a conversion price
of $1.00 per share. Any such conversion must be made on or before January 15,
1998. To date, approximately $972,720 of the proceeds of this offering have
been advanced to AUBIS and HALIS to support their operations, while the balance
of the proceeds from the sale of the Notes have been utilized to expand the
Company's sales and marketing capabilities in anticipation of the completion
of the Transactions.
In anticipation of the consummation of the Transactions, the Company
has commenced a private placement of common stock. Shares are being offered
on a best-efforts basis through a registered broker-dealer. Consummation of
the Transactions and attainment of subscriptions to purchase not less than
$1,000,000 in this offering are conditions to closing. If successful, the net
proceeds of the offering will be utilized by the Company subsequent to the
consummation of the Transactions to expand its sales and marketing efforts,
enhance its software products, support the growth of its administrative
infrastructure, acquire selected healthcare software and service companies and
system integration companies and for general corporate purposes.
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<PAGE> 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibit is filed with this report:
27.1 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. No reports on Form 8-K were filed
during the quarter ended July 31, 1996.
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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.
FISHER BUSINESS SYSTEMS, INC.
Dated: September 13, 1996 By: /s/ Larry Fisher
------------------ --------------------------------------
Larry Fisher, President and Chief
Executive Officer
(chief executive and financial officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JULY 31,
1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED JULY 31, 1996.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> FEB-01-1996
<PERIOD-END> JUL-31-1996
<EXCHANGE-RATE> 1
<CASH> 37,379
<SECURITIES> 0
<RECEIVABLES> 971,551
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,038,885
<PP&E> 239,765
<DEPRECIATION> 202,058
<TOTAL-ASSETS> 1,233,752
<CURRENT-LIABILITIES> 405,797
<BONDS> 0
0
0
<COMMON> 50,195
<OTHER-SE> (462,240)
<TOTAL-LIABILITY-AND-EQUITY> 1,233,752
<SALES> 238,116
<TOTAL-REVENUES> 238,116
<CGS> 73,428
<TOTAL-COSTS> 73,428
<OTHER-EXPENSES> 354,074
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (189,386)
<INCOME-TAX> 0
<INCOME-CONTINUING> (189,386)
<DISCONTINUED> 0
<EXTRAORDINARY> 78,230
<CHANGES> 0
<NET-INCOME> (111,156)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
