<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:
April 30, 1996 0-16288
FISHER BUSINESS SYSTEMS, INC.
- -------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-1366235
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1950 Spectrum Circle, Suite 400, Marietta, Georgia 30067
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (770) 857-4461
-------------------------------
Not applicable
- -------------------------------------------------------------------------------
(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 or 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 7,363,696
- -------------------------------------- ------------------------------------
Class Outstanding at June 13, 1996
<PAGE> 2
FISHER BUSINESS SYSTEMS, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
April 30, January 31,
1996 1996
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 51,401 $177,649
Accounts receivable - affiliates (Note C) 690,541 -
Accounts receivable, net 39,810 3,028
Other current assets - 8,254
-------- --------
Total current assets 781,752 188,931
-------- --------
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 199,052 197,048
-------- --------
Net equipment, furniture, and vehicles 40,713 11,432
-------- --------
NET INVESTMENT IN SALES TYPE LEASE - 31,484
OTHER 100,457 55,687
-------- --------
TOTAL ASSETS $922,922 $287,534
======== ========
</TABLE>
The condensed financial statements as of January 31, 1996 were
derived from the audited financial statements at that date.
-2-
<PAGE> 3
FISHER BUSINESS SYSTEMS, INC.
LIABILITIES AND SHAREHOLDERS' DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
April 30, January 31,
1996 1996
---------- -----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 289,213 $ 360,018
Deferred revenue 174,411 228,405
----------- -----------
Total current liabilities 463,624 588,423
----------- -----------
Convertible promissory notes (Note D) 800,000 -
----------- -----------
SHAREHOLDERS' DEFICIT
Preferred stock, par value $.10, authorized
5,000,000 shares, zero and 1,500,000 shares issued - 150,000
Common stock, par value $.01, authorized 11,500,000 and
10,000,000 shares 50,195 48,695
Additional paid-in-capital 8,509,986 8,361,486
Accumulated deficit (8,894,133) (8,854,320)
Less treasury stock at cost (6,750) (6,750)
----------- -----------
Total shareholders' deficit (340,702) (300,889)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 922,922 $ 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.
-3-
<PAGE> 4
FISHER BUSINESS SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended April 30, 1996 1995
------------ ----------
(Unaudited)
<S> <C> <C>
REVENUES $ 114,993 $ 175,114
COST OF GOODS SOLD 41,003 60,494
---------- ----------
GROSS MARGIN 73,990 114,620
---------- ----------
EXPENSE
Allowance for doubtful accounts - -
Selling, general and administrative 176,816 154,171
Miscellaneous expense 12,411 63
---------- ----------
TOTAL EXPENSES 189,227 154,234
---------- ----------
NET LOSS FROM OPERATIONS BEFORE
EXTRAORDINARY ITEM (115,237) (39,614)
Extraordinary income from debt restructuring 75,424 -
---------- ----------
NET LOSS $ (39,813) $ (39,614)
========== ==========
LOSS PER SHARE OF COMMON STOCK: $ - $ (.01)
========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING 6,369,504 3,053,171
========== ==========
</TABLE>
See notes to condensed financial statements.
-4-
<PAGE> 5
FISHER BUSINESS SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended April 30, 1996 1995
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (39,813) $(39,614)
Adjustments to reconcile net income to net cash provided
(used for) operating activities:
Depreciation and amortization 2,004 3,006
Changes in operating assets and liabilities affecting
operations:
Accounts receivable (36,782) 10,860
Accounts receivable - affiliates (690,541) -
Certificate of deposit - 36,586
Other current assets 8,254 87
Accounts payable and accrued expenses (70,805) (41,238)
Accrued compensation and benefits - 7,449
Deferred revenue (53,994) (46,738)
Customer deposits - 20,201
--------- ---------
Net cash provided by (used for) operating activities (881,677) (9,401)
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net sale (purchases) of equipment and furniture (31,285) -
Repurchase of redeemable stock - (48,333)
Organization costs (44,770) -
Proceed from sales type lease 31,484 -
--------- ---------
Net cash provided by (used for) investing activities (44,571) (48,333)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from private placement 800,000 -
--------- ---------
Net cash provided by (used for) financing activities 800,000 -
--------- ---------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (126,248) (57,734)
CASH AND CASH EQUIVALENTS, at beginning of period 177,649 69,219
--------- ---------
CASH AND CASH EQUIVALENTS, at end of period $ 51,401 $ 11,485
========= =========
</TABLE>
See notes to condensed financial statements
-5-
<PAGE> 6
FISHER BUSINESS SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
APRIL 30, 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 three
month period ended April 30, 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 April 30, 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 - Affiliate Receivables
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 $690,541.
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 $800,000 at quarter end.
-6-
<PAGE> 7
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 and hospitality industries. 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 two
wholly-owned subsidiaries of the Company (collectively, the "Fisher
Subsidiaries"), 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 Subsidiaries, 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 (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").
On May 23, 1996, the Company entered into an Agreement and Plan of
Reorganization to acquire Advanced Custom Computer Solutions, Inc. ("ACCS") in
exchange for 1,750,000 shares of common stock of the Company and up to an
additional 250,000 shares of common stock of the Company based on the pre-tax
net income of ACCS in the twelve-month period following its acquisition by 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 summer of 1996. Upon
consummation of the Transactions, AHS, ASI, HSI and ACCS will be wholly-owned
subsidiaries of the Company and the Company's corporate name will be changed to
AUBIS, 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.
In January 1996, the Company entered into a letter of intent to acquire
a license to a proprietary technology asset ("MERAD") from Paul Harrison
Enterprises, Inc. ("PHE"), pursuant to which the Company will pay a royalty of
10% of gross revenues generated from the MERAD technology and any derivatives
thereof by the Company or any of its affiliates.
-7-
<PAGE> 8
FINANCIAL CONDITION
Total assets increased $635,388 or 221% from January 31, 1996 due
primarily to an increase in accounts receivable of $727,323. The increase in
accounts receivable results primarily from the advance by the Company
of $690,541 to AUBIS and HALIS during the period to support their 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 and HALIS from the proceeds of
its private placement of 7.0% Convertible Promissory Notes due January 15, 1998
(the "Notes"). As of April 30, 1996 the Company had received a total of
$800,000 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.
RESULTS OF OPERATIONS
Revenues for the three months ended April 30, 1996 were $114,993, a
decrease of $60,121, or 34%, from the prior period revenues of $175,114. The
decrease in revenues is primarily attributable to a reduction in software
sales.
Selling, general and administrative expenses were $176,816 for the
three months ended April 30, 1996 compared to $154,171 for the prior year
period. The increase of $22,645 or 13% was largely due to activities relating
to the proposed Transactions.
The Company recorded a net loss of $39,813 for the three months ended
April 30, 1996, as compared to a net loss of $39,614 for the prior year period.
The net loss for the quarters was comparable, despite a net loss from
operations during the three months ended April 30, 1996 of $115, 237
(compared to a net loss from operations of $39,614 for the prior year period).
The three months ended April 30, 1996, however, was benefitted by extraordinary
income from debt restructuring of $75,424.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1996, the Company had working capital of $315,628,
compared to a deficit of $379,492 at January 31, 1996. The increase in working
capital is principally due to proceeds from the private placement of Notes in
the first quarter 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, direct sales of its software and services and indirect
sales of its software and services.
-8-
<PAGE> 9
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 nine
people.
In the first quarter of fiscal 1997, the Company commenced the Notes
offering. As of April 30, 1996, the Company had received a total of
$800,000 from this placement. Approximately $720,000 of the proceeds of this
offering had been advanced to AUBIS and HALIS to support their operations as of
June 1, 1996, 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 the
three primary areas of business which it will pursue subsequent to the
completion of the Transactions: system and service sales to the hospitality and
healthcare industries and networking systems and services to a variety of
industries.
-9-
<PAGE> 10
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. The following report on Form 8-K was
filed during the quarter ended April 30, 1996: Current Report on Form 8-K dated
February 7, 1996 (reporting change in fiscal year).
-10-
<PAGE> 11
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: June 13, 1996 By: /s/ Larry Fisher
------------- ---------------------------------
Larry Fisher, President and Chief
Executive Officer (chief
executive and financial officer)
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM APRIL 30,
1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED APRIL 30, 1996.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<EXCHANGE-RATE> 1
<CASH> 51,401
<SECURITIES> 0
<RECEIVABLES> 730,351
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 781,752
<PP&E> 239,765
<DEPRECIATION> 199,052
<TOTAL-ASSETS> 922,922
<CURRENT-LIABILITIES> 463,624
<BONDS> 0
0
0
<COMMON> 50,195
<OTHER-SE> (390,897)
<TOTAL-LIABILITY-AND-EQUITY> 922,922
<SALES> 114,993
<TOTAL-REVENUES> 114,993
<CGS> 41,003
<TOTAL-COSTS> 41,003
<OTHER-EXPENSES> 189,227
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (39,813)
<INCOME-TAX> 0
<INCOME-CONTINUING> (39,813)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (39,813)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
