<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) November 19, 1996
--------------------------------
HALIS, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 0-16288 58-1366235
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1950 Spectrum Circle, Suite 400, Marietta, Georgia 30067
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 857-4461
------------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits.
- ------ ---------------------------------
(a) Financial Statements of Business Acquired:
The following financial statements are filed with this Report:
AUBIS HOSPITALITY SYSTEMS, INC. and AUBIS SYSTEMS INTEGRATION, INC.
- -------------------------------------------------------------------
Report of Habif, Arogeti & Wynne, P.C., Independent Certified Public Accountants
Combined Balance Sheet at December 31, 1995 and September 30, 1996 (unaudited)
Combined Statements of Operations for the years ended December 31, 1995 and 1994
and for the nine months ended September 30, 1996 and 1995 (unaudited)
Combined Statements of Changes in Stockholders' Deficit for the years ended
December 31, 1995 and 1994 and for the nine months ended September 30,
1996 and 1995 (unaudited)
Combined Statements of Cash Flows for the years ended December 31,
1995 and 1994 and for the nine months ended September 30, 1996 and
1995 (unaudited)
Notes to Combined Financial Statements
HALIS SOFTWARE, INC. and PRO HEALTH SOLUTIONS, INC.
- ---------------------------------------------------
Report of Habif, Arogeti & Wynne, P.C., Independent Certified Public Accountants
Combined Balance Sheet at December 31, 1995 and September 30, 1996 (unaudited)
Combined Statement of Income (Loss) for the year ended December 31, 1995
and for the nine months ended September 30, 1996 and 1995 (unaudited)
Combined Statement of Changes in Stockholders' Equity (Deficit) for the year
ended December 31, 1995 and for the nine months ended September 30, 1996
(unaudited)
Combined Statement of Cash Flows for the year ended December 31, 1995
and for the nine months ended September 30, 1996 and
1995 (unaudited)
Notes to Combined Financial Statements
(b) Pro Forma Financial Information:
The following unaudited pro forma condensed financial statements are filed
with this Report:
Introduction
Unaudited Pro Forma Condensed Consolidated Balance Sheet - September 30, 1996
Unaudited Pro Forma Condensed Consolidated Statements of Operation - year ended
December 31, 1995 and nine months ended September 30, 1996
Notes to Unaudited Condensed Consolidated Pro Forma Financial Statements
(c) Exhibits:
2.1 Amended and Restated Agreement and Plan of Merger and
Reorganization, dated as of December 13, 1995 and amended and
restated as of March 29, 1996 and as further amended on September
27, 1996, among Fisher Business Systems, Inc., AUBIS, L.L.C., AUBIS
Hospitality Systems, Inc., AUBIS Systems Integration, Inc. and
certain persons and affiliates of AUBIS, L.L.C. (incorporated by
reference from the Company's Current Report on Form 8-K dated
November 19, 1996).
-2-
<PAGE>
2.2 Stock Purchase Agreement, dated as of March 29, 1996 and amended as
of September 27, 1996, between Fisher Business Systems, Inc.,
HALIS, L.L.C., Paul W. Harrison and James Askew (incorporated by
reference from the Company's Current Report on Form 8-K dated
November 19, 1996).
-3-
<PAGE>
[LETTERHEAD OF HABIF, AROGETI & WYNNE, P.C. APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors
of AUBIS Hospitality Systems, Inc.,
and AUBIS Systems Integration, Inc.
We have audited the accompanying combined balance sheet of AUBIS HOSPITALITY
SYSTEMS, INC. AND ITS SUBSIDIARIES [AHS] and AUBIS SYSTEMS INTEGRATION, INC.
[ASI] as of December 31, 1995, and the related combined statements of
operations, stockholders' deficit and cash flows for the years ended December
31, 1995 and 1994. These combined financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of AUBIS Hospitality
Systems, Inc. and its subsidiaries and AUBIS Systems Integration, Inc. at
December 31, 1995, and the results of their operations and their cash flows for
the years ended December 31, 1995 and 1994 in conformity with generally accepted
accounting principles.
The accompanying combined financial statements have been prepared assuming that
the Companies will continue as a going concern. As discussed in Note B to the
combined financial statements, the Companies have had recurring losses, a
working capital deficit and a capital deficit. These conditions raise
substantial doubt about their ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note B. The
combined financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Atlanta, Georgia /s/ Habif, Arogeti & Wynne, P.C.
February 9, 1996
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
------
[Unaudited]
December September
31, 1995 30, 1996
--------- ---------
<S> <C> <C>
Current assets
- --------------
Cash $ 112,252 $ 6,721
Receivables, less allowance for possible
losses of $53,400 142,325 113,636
Receivables - related party 69,771 69,018
Inventories 55,847 10,000
Other current assets 4,991 2,810
-------- --------
Total current assets 385,186 202,185
-------- --------
Property and equipment, at cost
- ----------------------
Computer equipment 83,419 57,897
Office furniture and fixtures 17,478 23,171
-------- --------
100,897 81,068
Less accumulated depreciation [ 69,629] [ 70,303]
-------- --------
31,268 10,765
-------- --------
Other assets
- ------------
Deferred merger costs 162,208 289,000
-------- --------
$ 578,662 $ 501,950
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities
- -------------------
Accounts payable and accrued expenses $ 751,435 $ 408,546
Accrued expenses - related party 55,863 -0-
Notes payable - affiliates -0- 545,748
Deferred revenue and customer deposits 88,818 -0-
Current portion of long-term debt - related party 50,000 150,000
Notes payable 16,088 -0-
Notes payable - related party 95,100 174,000
Payroll and sales tax payable 271,866 207,699
--------- ---------
Total current liabilities 1,329,170 1,485,993
--------- ---------
Long-term debt, net of current portion - related party 100,000 -0-
- ------------------------------------------------------ --------- ---------
Commitments and contingencies [Note G]
- -----------------------------
Stockholders' deficit
- ---------------------
Common stock - AHS, Inc., $1.00 par value, 1,000,000
shares authorized; 1,126 issued and outstanding 1,126 1,126
Common stock - ASI, Inc., no par value, 100,000
shares authorized; 14,288 issued and outstanding 100,787 100,787
Additional paid-in capital 478,874 478,874
Accumulated deficit [1,431,295] [1,564,830]
[ 850,508] [ 984,043]
--------- ---------
$ 578,662 $ 501,950
========= =========
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
[Unaudited]
For the year ended For the nine months ended
December 31, September 30,
------------------------- -------------------------
1 9 9 5 1 9 9 4 1 9 9 6 1 9 9 5
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Systems sales and services $3,251,665 $2,599,572 $1,589,482 $2,812,854
- -------------------------- --------- --------- --------- ---------
Costs and expenses
- ------------------
Cost of goods sold 2,541,429 2,085,290 1,084,977 2,201,918
Selling, general, and administrative 1,000,818 942,598 562,746 628,817
--------- --------- --------- ---------
3,542,247 3,027,888 1,647,723 2,830,735
--------- ---------- --------- ---------
Operating loss [ 290,582] [ 428,316] [ 58,241] [ 17,881]
- -------------- --------- ---------- --------- ---------
Other income [expense]
- ----------------------
Gain [Loss] on assets disposal 6,385 -0- [ 27,528] [ 39,240]
Rental income 21,350 8,000 14,400 10,675
Interest expense [ 22,798] [ 21,304] [ 19,666] [ 20,577]
Other income [expense] 315 6,037 [ 42,500] [ 36,182]
Loss from misappropriation [ 97,123] -0- -0- -
--------- ---------- --------- ---------
[ 91,871] [ 7,267] [ 75,294] [ 85,324]
--------- ---------- --------- ---------
Loss before income
taxes [ 382,453] [ 435,583] [ 133,535] [ 103,205]
Income taxes -0- -0- -0- -0-
- ------------ --------- ---------- --------- ---------
Net loss $[ 382,453] $[ 435,583] $[ 133,535] $[ 103,205]
========= ========== ========= =========
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
COMBINED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
AHS, Inc. ASI, Inc.
Common stock Common stock Additional Total
--------------- --------------- paid-in Accumulated Stockholders'
Shares Amount Shares Amount capital Deficit Deficit
------ ------- ------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 1,126 $1,126 10,000 $50,787 $323,874 $[1,048,842] $[ 673,055]
Issuance of common stock 4,288 50,000 155,000 205,000
Net loss [ 382,453] [ 382,453]
----- ----- ------ ------- -------- --------- --------
Balance, December 31, 1995 1,126 1,126 14,288 100,787 478,874 [1,431,295] [ 850,508]
Net loss - nine months ended
September 30, 1996 (unaudited) [ 133,535] [ 133,535]
----- ----- ------ ------- ------- --------- --------
Balance, September 30, 1996
(Unaudited) 1,126 $1,126 14,288 $100,787 $478,874 $[1,564,830] $[ 984,043]
===== ===== ====== ======= ======= ========= ========
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
[Unaudited]
For the year ended For the nine months
December 31, ended September 30,
--------------------- ---------------------
1 9 9 5 1 9 9 4 1 9 9 6 1 9 9 5
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash flows from operating activities
- ------------------------------------
Net loss $[382,453] $[435,583] $[133,535] $[103,205]
--------- --------- --------- ---------
Adjustments to reconcile net loss
to cash provided [used] by
operating activities
Depreciation 13,268 24,795 6,000 12,570
Allowance for loss on accounts
receivable 18,000 400 -0- 21,845
[Gain] Loss on disposal of assets [ 6,385] -0- 15,172 [ 39,240]
Changes in operating assets and
liabilities affecting operations
Decrease [Increase] in accounts
receivable 22,841 [ 29,454] 28,689 [108,570]
Decrease [Increase] in
receivables - related party [ 8,048] 29,466 753 [ 23,934]
Decrease [Increase] in inventories [ 6,196] [ 20,651] 45,847 [ 59,608]
Decrease [Increase] in other
current assets [ 750] 892 2,181 [ 13,073]
Increase [Decrease] in accounts
payable and accrued
expenses 154,802 205,128 [342,889] [ 18,121]
Increase [Decrease] in accrued
expenses - related party 51,545 11,000 [ 55,863] 125,000
Increase [Decrease] in deferred
revenue and customer deposits 48,266 7,228 [ 88,818] 107,874
Increase [Decrease] in payroll
and sales tax payable 150,569 557 [ 64,167] 79,965
------- ------- -------- -------
Total adjustments 437,912 229,361 [453,095] 84,708
------- ------- ------- -------
Net cash provided [used]
by operating activities 55,459 [206,222] [586,630] [ 18,497]
------- ------- ------- -------
Cash flows from investing activities
- ------------------------------------
Purchase of equipment and furniture [ 22,015] [ 2,043] [ 5,693] [ 16,952]
Deferred merger costs [162,208] -0- [126,792] -0-
Insurance recovery from equipment loss 30,677 -0- 5,024 -0-
Proceeds from sale of maintenance contracts -0- -0- -0- 49,473
------- ------- ------- -------
Net cash used by investing
activities [153,546] [ 2,043] [127,461] 32,521
------- ------- ------- -------
Cash flows from financing activities
- ------------------------------------
Issuance of common stock 205,000 125,000 -0- 50,000
Net payments on notes payable [ 17,912] [ 16,000] [ 16,088] [ 53,355]
Proceeds from notes payable - affiliates -0- -0- 545,748 -0-
Proceeds from issuance of notes payable -
related party 11,020 79,081 78,900 27,779
Proceeds from issuance of long-term debt -
related party -0- 16,694 -0- -0-
------- ------- ------- -------
Net cash provided by financing
activities 198,108 204,775 608,560 24,424
------- ------- ------- -------
Net increase [decrease] in cash 100,021 [ 3,490] [105,531] 38,448
Cash, beginning of period 12,231 15,721 112,252 12,231
------- ------- ------- -------
Cash, end of period $112,252 $ 12,231 $ 6,721 $ 50,679
======= ======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting:
-------------------
These financial statements are the combined statements of AUBIS Hospitality
Systems, Inc. [AHS] and AUBIS Systems Integration, Inc. [ASI] [the
Companies]. On February 15, 1995, the majority shareholders contributed
their shares of AHS and ASI to AUBIS, LLC [the "Parent"]. On March 1, 1995,
the remaining shareholders contributed their shares to the Parent, thereby
making the Companies 100% owned by the Parent. Material intercompany
transactions and balances have been eliminated.
On November 19, 1996, the Parent and the Companies consummated a merger
agreement with Fisher Business Systems, Inc. [Fisher], whereby the Companies
were merged into Fisher in a transaction to be accounted for as a reverse
acquisition of Fisher by the Companies [Note C] and Halis Software, Inc.
[Halis]. Halis and AUBIS are under common control.
AUBIS Hospitality Systems, Inc and Subsidiaries:
-----------------------------------------------
AUBIS Hospitality Systems, Inc. [AHS] f/k/a Wipporwil Systems, Inc., EZ/POS,
Inc. and Inventory Xpress, Inc., its subsidiaries, provide sales and
services in the southeastern United States to individual, franchisee,
management companies and national chains in the restaurant industry. AHS's
technical staff has extensive experience in computer based systems for
restaurant point of sale and back office applications, restaurant management
and systems development.
AUBIS Systems Integration, Inc.:
-------------------------------
AUBIS Systems Integration, Inc. [ASI] f/k/a G.E. Random and Associates,
Inc., d/b/a Peripheral Design provides computer services, network solutions,
connectivity solutions and system integration to businesses. ASI sells,
services and supports many major brands of computers, peripherals and
networks. ASI's sales and services include computer system integration,
network configuration, and network implementation. ASI's support services
include on-site hardware maintenance as well as network support programs.
Revenue:
-------
Revenue is recognized as follows:
Support contracts - Ratably over the life of the contract from the
effective date.
Installation, training
and education - When the services are provided.
Hardware - In accordance with SOP91-1, revenue is
recognized upon shipment of the computer
equipment to the customer, provided no
significant obligations remain and collection
of resulting receivable is deemed probable.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
------------------------------------------
Use of Estimates:
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures.
Fair Value of Financial Instruments:
-----------------------------------
The Companies have a number of financial instruments, none of which are held
for trading purposes. The Companies estimate that the fair value of all
financial instruments at December 31, 1995, does not differ materially from
the aggregate carrying values of their financial instruments recorded in the
accompanying balance sheet. The estimated fair value amounts have been
determined by the Companies using available market information and
appropriate valuation methodologies. Considerable judgment is necessarily
required in interpreting market data to develop the estimates of fair value,
and, accordingly, the estimates are not necessarily indicative of the
amounts that the Companies could realize in a current market exchange.
Inventory:
---------
Inventory is recorded on the first-in, first-out method at the lower-of-cost
or market.
Property and Equipment:
----------------------
Property and equipment is carried at cost. Depreciation is computed using
the accelerated method based on estimated useful lives of the assets,
generally three to seven years. For income tax purposes, depreciation is
calculated on accelerated methods.
Deferred Merger Costs:
---------------------
Deferred merger costs will be capitalized as part of the deemed cost of
Fisher which will be allocated to Fisher's net assets in accordance with
their relative fair values [Note C].
Income Taxes:
------------
Income taxes are based on loss for financial reporting purposes and reflect
a current liability [asset] for the estimated taxes payable [recoverable] in
the current year tax return and changes in deferred taxes. Deferred tax
liabilities and assets are recognized for the estimated tax effects of
temporary differences between financial reporting and taxable income [loss]
for the loss carryforwards based on enacted tax laws and rates. A valuation
allowance is used to reduce deferred tax assets to the amount that is more
likely than not to be realized [Note H].
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
------------------------------------------
Interim Financial Statements
----------------------------
The accompanying financial statements as of September 30, 1996 and for the
nine months ended September 30, 1996 and September 30, 1995 are unaudited
but, in the opinion of management of AHS and ASI, reflect all adjustments
(consisting only of normal and recurring adjustments) necessary for a fair
presentation. The results of operations for the nine month period are not
necessarily indicative of the results that may be expected for the full year
ending December 31, 1996.
B. GOING CONCERN:
-------------
These financial statements are presented on the basis that the Companies are
going concerns. Going concern contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business over a
reasonable length of time. The accompanying financial statements show a loss
from the combined results of operations of $382,453 and $435,583 for the
years ended December 31, 1995 and 1994, respectively. The Companies have a
combined stockholders' deficit of $850,508 and $855,241 as of December 31,
1995 and 1994, respectively, and current liabilities exceed current assets
by $943,984 and $1,050,553 as of December 31, 1995 and 1994, respectively.
The Parent has funded the operations of the Companies when necessary,
however, there is no commitment from the Parent to continue to fund
deficits, if any. The Parent and the Companies have entered into a merger
agreement, as discussed in Note C.
C. MERGER AND REORGANIZATION:
-------------------------
The Parent and the Companies entered into an amended and restated agreement
and plan of merger and reorganization with Fisher on December 13, 1995 and
amended the plan on September 27, 1996. This merger was consummated on
November 19, 1996. Under the terms of the merger agreement, the Parent
exchanged 100% of the issued and outstanding shares of the Companies for
10,000,000 shares in Fisher in a tax free exchange. Fisher's auditors'
report for its year ended January 31, 1995 contained an explanatory
paragraph relating to its ability to continue as a going concern.
D. LONG-TERM DEBT - RELATED PARTY:
------------------------------
A member of the parent - $150,000 installment note modified March 1, 1995
with annual payments of $50,000 plus interest at 10% per annum, unsecured.
As of December 31, 1995, the following amounts were payable:
$ 150,000
Less current portion [ 50,000]
--------
$ 100,000
=======
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
D. LONG-TERM DEBT - RELATED PARTY: [Continued]
------------------------------
Maturities of long-term debt - related party as of December 31, 1995 are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1996 $ 50,000
1997 50,000
1998 50,000
-------
$ 150,000
=======
</TABLE>
As of March 22, 1996, the Parent has agreed to satisfy the entire debt.
E. NOTES PAYABLE:
-------------
The Companies have the following unsecured notes payable:
MicroAge Technologies - Unsecured note payable in the original amount of
$10,240, at 14% per annum, with monthly payments in the amount of $1,350,
which include interest. Note is due June 1, 1996. Balance due at December
31, 1995 and September 30, 1996 was $7,765 and $-0-, respectively.
SunTrust Bank - note payable in the original amount of $16,000, at 10.65%
per annum, with monthly payments of $814, which include interest. Note is
due September 4, 1996. Balance due at December 31, 1995 and September 30,
1996 was $8,323 and $-0-, respectively. Guaranteed by a member of the
parent.
F. NOTES PAYABLE - RELATED PARTIES:
-------------------------------
The Companies have the following unsecured notes payable to members of the
Parent as of December 31, 1995 and September 30, 1996:
Notes payable in the amount of $59,000, due on demand. Interest is at 12%
per annum.
Non-interest bearing note payable in the amount of $6,000, past due as of
January 15, 1996.
Notes payable in the amount of $21,100 and $-0- as of December 31, 1995 and
June 30, 1996, respectively. Interest is at 12% per annum.
Note payable in the amount of $9,000, past due as of January 15, 1996.
Note payable in the amount of $50,000 as of September 30, 1996. Interest is
at prime rate plus 1% per annum. Past due as of April, 1996.
Note payable in the amount of $50,000, due on October 10, 1996. Interest is
at 9.496% per annum.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
G. COMMITMENTS AND CONTINGENCIES:
-----------------------------
Concentration of Credit Risk:
----------------------------
The Companies do not have a secured interest in their accounts receivable;
however, they do have legal recourse for defaulted amounts.
Payroll and Sales Taxes:
-----------------------
The Company is delinquent in paying certain federal and state payroll taxes
and sales taxes.
The Internal Revenue Service has written the Companies indicating that it
may file a Notice of Federal Tax Lien or levy the Companies' assets if past
due payroll taxes are not paid.
Operating Leases:
----------------
The Companies lease office space and equipment under several operating lease
agreements. Rent expense for the office space and equipment was $70,859 and
$54,905 for the years ended December 31, 1995 and 1994, respectively.
At December 31, 1995, minimum future lease payments under non-cancelable
leases having remaining terms in excess of one year are as follows:
<TABLE>
<CAPTION>
December 31, Amount
------------ ------
<S> <C>
1996 $35,484
1997 14,980
1998 4,728
1999 4,728
2000 3,152
------
$63,072
======
</TABLE>
Threatened Litigation:
---------------------
A customer has threatened AHS with litigation for breach of contract and
for violation of warranties relating to a system sale. AHS and its legal
counsel are not aware of any lawsuit that has commenced by the customer and
AHS does not believe there is any basis for the claim.
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
H. INCOME TAXES:
------------
The sources of temporary differences and their effect on the net deferred
taxes are as follows for the years ended December 31, 1995 and 1994:
Net operating loss carryforwards $ 480,000
Other temporary differences 12,400
Less valuation allowance [492,400]
-------
$ -0-
======
The valuation allowance fully reserves the net deferred tax asset which
arose from the tax loss carryforwards and other temporary differences
generated.
At December 31, 1995, the Companies have approximately $1,300,000 of net
operating loss carryforwards available to offset future tax liabilities.
These losses begin to expire in 2004. The losses available annually are
limited under Internal Revenue Code, Section 382, as a result of certain
changes in ownership of both corporations.
I. RELATED PARTY TRANSACTIONS:
--------------------------
The Companies entered into a management agreement on March 1, 1995, with the
Parent, for 2% of the Companies' revenue or $7,000 per month, whichever is
greater. Management fee expense during the year ended December 31, 1995
totalled $76,979 and $35,000 for the nine months ended September 30, 1996,
respectively. Interest expenses to related parties for the years ended
December 31, 1995 and 1994 were $21,332 and $14,381, respectively, and
$19,666 for the nine months ended September 30, 1996.
J. ECONOMIC DEPENDENCY:
-------------------
AHS purchased a significant portion of its products from Sulcus, also known
as Sulcus Hospitality Group, Sulcus Computer Corporation, and Squirrel
Companies, Inc. [Sulcus]. Sales generated from Sulcus products and services
were approximately $1,750,000 and $1,500,000 in 1995 and 1994, respectively.
Although AHS has re-sold and serviced primarily Sulcus products, the
Companies are planning on selling new software being developed by the future
merged group [Note C].
<PAGE>
AUBIS HOSPITALITY SYSTEMS, INC. AND SUBSIDIARIES
AND AUBIS SYSTEMS INTEGRATION, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and
the nine months ended September 30, 1996 and 1995]
K. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
------------------------------------------------
Supplemental information required by Statement of Financial Accounting
Standards No. 95, relative to the statement of cash flows, is as follows:
<TABLE>
<CAPTION>
1 9 9 5 1 9 9 4
-------- --------
<S> <C> <C>
Taxes paid $ -0- $ -0-
Interest paid 6,145 5,603
</TABLE>
The following non-cash transactions occurred for the year ended 1995:
Employee advances were increased by transferring fixed assets valued at
$11,500 to those employees.
L. SUBSEQUENT EVENTS:
-----------------
Effective January 1, 1996, Sulcus will cease business activities with the
Companies due to the upcoming merger with Fisher. Sulcus will accept new
orders placed for current customer prospects until March 30, 1996, and will
allow the Companies to continue to service Sulcus systems under contracts
directly with the Companies' customers [Note J].
A Member of the Parent provided the Companies with a 60 day loan in the
amount of $100,000 at prime plus 1% in February 1996.
M. LOSS FROM MISAPPROPRIATION:
--------------------------
During the year ended December 31, 1995, a former employee misappropriated
$97,123 from the Companies.
A. NOTES PAYABLE - AFFILIATE:
--------------------------
In connection with its agreement and plan of merger and reorganization with
Fisher [Note C], the Company was advanced $545,748 as of September 30, 1996.
These notes bear interest at rates ranging from 10 to 12 percent and are due
and payable on the first anniversary of the date of the advance.
<PAGE>
[LETTERHEAD OF HABIF, AROGETI & WYNNE, P.C. APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors
of Halis Software, Inc.
and ProHealth Solutions, Inc.
We have audited the accompanying combined balance sheet of HALIS SOFTWARE, INC.
and PROHEALTH SOLUTIONS, INC. as of December 31, 1995, and the related combined
statements of income [loss], stockholders' equity [deficit] and cash flows for
the year ended December 31, 1995. These combined financial statements are the
responsibility of the Companies' management. Our responsibility is to express
an opinion on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of HALIS SOFTWARE, INC.
and PROHEALTH SOLUTIONS, INC. at December 31, 1995, and the results of their
operations and their cash flows for the year ended December 31, 1995 in
conformity with generally accepted accounting principles.
/s/ Habif, Arogeti & Wynne, P.C
Atlanta, Georgia
February 15, 1996
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
COMBINED BALANCE SHEET
ASSETS
------
<TABLE>
<CAPTION>
[Unaudited]
December September
31, 1995 30, 1996
-------- ---------
<S> <C> <C>
Current assets
- --------------
Cash $ 16,399 $ 11,968
Prepaid expenses 366 -
Deferred income taxes 4,600 4,600
Due from shareholder 500 500
------- -------
Total current assets 21,865 17,068
------- -------
Property and equipment, at cost
- ----------------------
Office equipment 4,106 4,106
Computer equipment 18,170 22,996
Office furniture and fixtures 8,207 8,207
------- -------
30,483 35,309
Less accumulated depreciation [ 5,628] [ 8,769]
------- -------
24,855 26,540
------- -------
Other assets
- ------------
Deferred merger costs 7,500 7,500
Deposits 8,609 13,076
Intangible assets, net accumulated amortization 4,117 3,603
------- -------
20,226 24,179
------- -------
$ 66,946 $ 67,787
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY [DEFICIT]
---------------------------------------------
Current liabilities
- -------------------
Accounts payable and accrued expenses $ 8,100 $ 6,376
Notes payable - affiliates 506,358
Income tax payable 6,908 -
Accrued salary - officer 36,923 36,923
------- -------
Total current liabilities 51,931 549,657
------- -------
Stockholders' equity [deficit]
- ------------------------------
Common stock - ProHealth Solutions, Inc.,
$1.00 par value, 100,000 shares
authorized; 5,000 issued and outstanding 5,000 -
Common stock - Halis Software, Inc., no par value,
10,000 shares authorized; 1,000 issued and outstanding 500 500
Additional paid-in-capital 5,000
Retained earnings [deficit] 9,515 [487,370]
------- -------
15,015 [481,870]
------- -------
$ 66,946 $ 67,787
======= =======
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
COMBINED STATEMENT OF INCOME [LOSS]
<TABLE>
<CAPTION>
[Unaudited]
For the Nine Months Ended
Year Ended September 30,
December -------------------------
31, 1995 1996 1995
---------- -------- --------
<S> <C> <C> <C>
Revenues $331,231 $ 66,607 $279,406
- -------- ------- ------- -------
Costs and expenses
- ------------------
Cost of sales 71,830 - 27,831
Research and development 234,178 24,482
Selling, general, and administrative 248,972 329,314 186,588
------- ------- -------
320,802 563,492 238,901
------- ------- -------
Operating income [loss] 10,429 [496,885] 40,505
Other income 1,394 - 1,006
- ------------ ------- ------- -------
Income [Loss] before income taxes 11,823 [496,885] 41,511
Income taxes 2,308 - -
- ------------ ------- ------- -------
Net income [loss] $ 9,515 $[496,885] $ 41,511
======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY [DEFICIT]
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
ProHealth Halis
Solutions, Inc. Software, Inc Additional Total
--------------- ------------- Paid-In Retained Stockholders'
Shares Amount Shares Amount Capital Earnings [Deficit] Equity [Deficit]
-------- -------- ------ ------ --------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1995 -0- $ -0- -0- $ -0- $ -0- $ -0- $ -0-
Issuance of common stock 5,000 5,000 1,000 500 -0- -0- 5,500
Net income 9,515 9,515
----- ----- ----- ----- ----- ------- -------
Balance, December 31, 1995 5,000 5,000 1,000 500 -0- 9,515 15,015
Net loss - nine months
ended September 30, 1996
(unaudited) [496,885] [496,885]
Merger of Pro Health
Solutions, Inc. into
Halis Software, Inc.
(Unaudited) [5,000] [5,000] 5,000 -0-
----- ----- ----- ----- ----- ------- -------
Balances, September 30, 1996
(Unaudited) -0- $ -0- 1,000 $ 500 $5,000 $[487,370] $[481,870]
===== ===== ===== ===== ===== ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
COMBINED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
[Unaudited]
For the Nine Months Ended
Year Ended September 30,
December -------------------------
31, 1995 1996 1995
---------- -------- --------
<S> <C> <C> <C>
Cash flow from operating activities
- -----------------------------------
Net income [loss] $ 9,515 $[496,885] $ 41,511
------ ------- ------
Adjustments to reconcile net income [loss] to
net cash provided [used] by operating activities
Depreciation 5,628 3,141 6,325
Amortization 1,030 514 257
Deferred income taxes [ 4,600] - -
Changes in assets and liabilities
Increase in accounts receivable - [ 2,750]
Increase [Decrease] in prepaid expenses [ 366] 366 -
Increase in deposits [ 8,609] [ 4,467] [ 7,539]
Increase in intangible assets [ 5,147] - [ 5,147]
Increase in accounts payable and accrued
expenses 8,100 [ 1,724] 38,484
Increase [Decrease] in income tax payable 6,908 [ 6,908] -
Increase in accrued salary - officer 36,923 - 25,846
------ ------- ------
Total adjustments 39,867 [ 9,078] 55,476
------ ------- ------
Net cash provided [used] by
operating activities 49,382 [505,963] 96,987
------ ------- ------
Cash flows from investing activities
- ------------------------------------
Purchase of equipment and furniture [30,483] [ 4,826] [29,425]
Deferred merger costs [ 7,500] - -
------ ------- ------
Net cash used by investing activities [37,983] [ 4,826] [29,425]
------ ------- ------
Cash flows from financing activities
- ------------------------------------
Advances from affiliate - 506,358 -
Issuance of common stock 5,000 - 5,000
------ ------- ------
Net cash provided by financing activities 5,000 506,358 5,000
------ ------- ------
Net increase [decrease] in cash 16,399 [ 4,431] 72,562
Cash, beginning of period - 16,399 -
------ ------- ------
Cash, end of period $ 16,399 $ 11,968 $ 72,562
====== ======= ======
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and the nine months
ended September 30, 1996 and 1995]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting:
-------------------
These financial statements are the combined statements of Halis Software,
Inc. [HSI] and ProHealth Solutions, Inc. [PHSI] [the Companies]. PHSI was
incorporated on December 5, 1994 and began operations in January 1995. The
ownership of PHSI was restructured on December 29, 1995 when the shareholders
contributed 100% of their shares to Halis, L.L.C. [Parent]. HSI was
incorporated on October 24, 1995 and is owned 100% by the Parent. Material
intercompany transactions have been eliminated.
Effective March 8, 1996, PHSI and HSI merged with HSI as the surviving
entity. PHSI had operations during the period ended September 30, 1996;
however, the Company is effectively dormant as of September 30, 1996.
Effective November 19, 1996, the Parent and HSI consummated a merger
agreement with Fisher Business Systems, Inc. [Fisher], whereby HSI merged
into Fisher in a transaction which was accounted for as a reverse acquisition
of Fisher by HSI [Note B] and AUBIS Hospitality Systems, Inc. and AUBIS
Systems Integration, Inc. (collectively AUBIS). AUBIS and HSI are under
common control. [See Note B.]
ProHealth Solutions, Inc.:
-------------------------
ProHealth Solutions, Inc. [PHSI] provides a turnkey preventive care data
collection system for managed care organizations.
Halis Software, Inc.:
--------------------
Halis Software, Inc. was organized to provide a comprehensive information
solution, which includes an advanced healthcare systems technology and
solutions for healthcare companies.
Halis Software, Inc. plans to integrate all of the primary applications in a
common, multimedia database which uses the emerging object-relational data
management approach.
Use of Estimates:
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and the nine months
ended September 30, 1996 and 1995]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
------------------------------------------
Fair Value of Financial Instruments:
-----------------------------------
The Company has a number of financial instruments, none of which are held for
trading purposes. The Company estimates that the fair value of all financial
instruments at December 31, 1995 does not differ materially from the
aggregate carrying values of its financial instruments recorded in the
accompanying balance sheet. The estimated fair value amounts have been
determined by the Company using available market information and appropriate
valuation methodologies. Considerable judgment is necessarily required in
interpreting market data to develop the estimates of fair value, and,
accordingly, the estimates are not necessarily indicative of the amounts that
the Company could realize in a current market exchange.
Property and Equipment:
----------------------
Property and equipment is carried at cost. Expenditures for maintenance and
repairs are expensed currently, while renewals and betterments that
materially extend the life of an asset are capitalized. The cost of assets
sold, retired, or otherwise disposed of, and the related allowance for
depreciation, are eliminated from the accounts, and any resulting gain or
loss is included in operations.
Depreciation is provided using the straight-line method based on the
estimated useful lives of the assets, generally five to seven years. For
income tax purposes, depreciation is calculated on accelerated methods.
Amortization:
------------
Intangible assets are being amortized over 60 months.
Income Taxes:
------------
Income taxes are based on income for financial reporting purposes and reflect
a current liability for the estimated taxes payable in the current year tax
return and changes in deferred taxes. Deferred tax liabilities and assets are
recognized for the estimated tax effects of temporary differences between
financial reporting and taxable income for the loss carryforwards based on
enacted tax laws and rates.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and the nine months
ended September 30, 1996 and 1995]
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
------------------------------------------
Product Development and Engineering:
-----------------------------------
Product development and engineering costs, other than capitalized software
costs, are charged to operations when incurred.
Software Development Costs:
--------------------------
The Company accounts for software development costs in accordance with
Statement of Financial Accounting Standard No. 86. The cost of establishing
the technological feasibility of new products or product enhancements is
expensed as incurred as research and development cost. The costs incurred
subsequent to the establishment of the technological feasibility of the
product and prior to its general release are capitalized. Capitalized costs
are amortized on a product-by-product basis using the greater of (a) the
ratio that current revenues for a product bear to the total current and
anticipated future revenues or (b) the straight-line method over the
remaining estimated useful life of the product (five years).
Interim Financial Statements:
----------------------------
The accompanying financial statements as of September 30, 1996 and for the
nine months ended September 30, 1996 and September 30, 1995 are unaudited
but, in the opinion of management of Halis Software, Inc. and ProHealth
Solutions, Inc., reflect all adjustments (consisting only of normal and
recurring adjustments) necessary for a fair presentation. Halis Software,
Inc. was incorporated October 24, 1995. Therefore, operations for the nine
month period ended September 30, 1995 relate solely to the operations of
ProHealth Solutions, Inc. The results of operations for the nine-month period
are not necessarily indicative of the results that may be expected for the
full year ending December 31, 1996.
B. MERGER AND REORGANIZATION:
-------------------------
The Parent and HSI signed a letter of intent January 25, 1996 and entered
into an agreement and plan of merger and reorganization dated May 23, 1996 to
merge with Fisher. This merger was consummated November 19, 1996. Under the
terms of the merger, the Parent exchanged 100% of the issued and outstanding
shares of HSI for 5,000,000 shares in Fisher, in a tax free exchange.
Fisher's auditors' report for its year ended January 31, 1995 contained an
explanatory paragraph relating to its ability to continue as a going concern.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and the nine months
ended September 30, 1996 and 1995]
C. COMMITMENTS AND CONTINGENCIES:
-----------------------------
Operating Leases:
----------------
The Companies lease office space and equipment under several operating lease
agreements. Rent expense for the office space and equipment was $24,855 for
the year ended December 31, 1995.
At December 31, 1995, minimum future lease payments under non-cancelable
leases having remaining terms in excess of one year are as follows:
December 31, Amount
------------ ------
1996 $30,724
1997 31,241
1998 5,157
------
$67,122
======
D. INCOME TAXES:
------------
The components of income taxes are as follows:
Amount
------
Federal income tax liability $ 4,934
State income tax liability 1,974
Deferred income tax benefit [4,600]
------
$ 2,308
======
The sources of temporary differences and their effect on the net deferred tax
benefit are as follows:
Amount
------
Accrued officer salary $ 7,414
Depreciation [2,814]
------
$ 4,600
======
E. MAJOR CUSTOMERS:
---------------
Revenue from Marion Merrell Dow and The Prudential Health Care System in the
amounts of $50,000 and $272,506, respectively, comprised 97.4% of the
Companies' revenues for the year ended December 31, 1995.
<PAGE>
HALIS SOFTWARE, INC.
AND
PROHEALTH SOLUTIONS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1995
[Unaudited with respect to September 30, 1996 and the nine months
ended September 30, 1996 and 1995]
F. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
------------------------------------------------
Supplemental information required by Statement of Financial Accounting
Standards No. 95, relative to the statement of cash flows, is as follows.
The following non-cash transactions occurred for the year ended December 31,
1995:
HSI issued 500 shares of no par common stock in exchange for a receivable
from the Parent in the amount of $500.
G. NOTES PAYABLE - AFFILIATES:
--------------------------
In connection with its agreement and plan of merger and reorganization with
Fisher [Note B], the Company was advanced $506,358 as of September 30, 1996.
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.
H. RELATED PARTY:
-------------
HSI has software development and license agreements with One Tree Corporation
and Merad Corporation, both of which are under similar control as HSI.
Included in research and development expenses for the nine months ended
September 30, 1996 is $81,280 which was paid to One Tree Corporation and
$45,000 which was paid to Merad Corporation. Included in selling, general and
administrative expenses is $6,661 in royalties which were paid to Merad
Corporation, which represent a 10% royalty on sales of software.
<PAGE>
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet of HALIS,
Inc. gives effect to the following transactions as if they occurred on September
30, 1996: the reverse acquisition of Fisher Business Systems, Inc. (Fisher) by
AUBIS Hospitality Systems, Inc., AUBIS Systems Integration, Inc., Halis
Software, Inc. and ProHealth Solutions, Inc. (collectively the Predecessor).
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for
HALIS, Inc. for the year ended December 31, 1995 and the nine months ended
September 30, 1996 gives retroactive effect to the prior transactions as if they
had occurred January 1, 1995. The Unaudited Pro Forma Condensed Consolidated
Financial Statements do not purport to be indicative of the actual financial
position or the results of operations of HALIS, Inc. had the acquisition been
completed and should be read in conjunction with the audited financial
statements of Fisher and the Predecessor and the related notes thereto appearing
elsewhere herein.
<PAGE>
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Fisher
Business
Predecessor Systems, Inc.
September 30, 1996 October 31, 1996 Adjustments Pro Forma
------------------ ------------------ ----------- -------------
ASSETS
------
<S> <C> <C> <C> <C>
Current assets $ 219,253 $ 152,193 $ 371,446
Due from Predecessor 1,127,375 (a) $[1,127,375] -
Property and equipment 37,305 47,953 85,258
Other assets 24,179 24,179
Deferred merger costs 289,000 199,751 (b) [ 488,751] -
---------- --------- --------- ---------
Total assets $ 569,737 $1,527,272 $[1,616,126] $ 480,883
========= ========= ========= =========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities $ 2,035,650 $ 586,095 (a) [1,127,375] $1,344,370
(d) [ 150,000]
Convertible promissory notes 1,470,000 1,470,000
Long-term debt - -
---------- ---------- ---------- ---------
Total liabilities 2,035,650 2,056,095 [1,277,375] 2,814,370
--------- --------- --------- ---------
Stockholders' deficit
- ---------------------
Net stockholders' deficit [1,465,913] (c) 1,465,913 -
Common stock, par value $.01 50,195 (c) 184,870 235,065
Additional paid-in capital 8,657,486 (c) 401,417 9,208,903
(d) 150,000
Accumulated deficit [9,229,754] (c) [ 2,052,200] [11,770,705]
(b) [ 488,751]
Less: Treasury stock at cost [ 6,750] [ 6,750]
--------- --------- ---------- ----------
Total stockholders' deficit [1,465,913] [ 528,823] [ 338,751] [ 2,333,487]
--------- --------- ---------- ----------
Total liabilities and stockholders' deficit $ 569,737 $ 1,527,272 $[1,616,126] $ 480,883
========= =========== =========== ==========
Common stock issued and outstanding (c) 8,506,538 15,000,000 23,506,538
========= ========== ==========
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements
<PAGE>
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Fisher
Business
Predecessor Systems, Inc.
December 31, 1995 January 31, 1996 Adjustments Pro Forma
------------------ ---------------- ----------- -----------
<S> <C> <C> <C> <C>
Systems sales and services $ 3,582,896 $ 732,549 $ - $ 4,315,445
- -------------------------- --------- --------- --------- ----------
Costs and expenses
- ------------------
Cost of goods sold 2,613,259 246,992 2,860,251
Research and development
Selling, general, and administrative 1,249,790 684,981 (e) 123,021 2,057,792
--------- --------- --------- ----------
3,863,049 931,973 123,021 4,918,043
--------- --------- --------- ----------
Operating income [loss] [ 280,153] [ 199,424] [ 123,021] [ 602,598]
- ---------------------- --------- --------- --------- ----------
Other income [expense]
- ---------------------
Gain on asset disposal 6,385 6,385
Rental income 21,350 21,350
Interest expense [ 22,798] (f) [ 102,900] [ 110,698]
(g) 15,000
Interest income 1,394 1,394
Other income 315 315
Loss from misappropriation [ 97,123] [ 97,123]
--------- --------- --------- ----------
[ 90,477] [ 87,900] [ 178,377]
--------- --------- --------- ----------
Income [Loss] before income taxes [ 370,630] [ 199,424] [ 210,921] [ 780,975]
Provision for income taxes 2,308 - (i) [ 2,308] -
- -------------------------- --------- --------- --------- ----------
Net income [loss] $[ 372,938] $[ 199,424] $[ 208,613] $[ 780,975]
========= ========= ========= ==========
Net loss per share $[ .02] $[ .03]
========= ==========
Shares outstanding (h) 8,506,538 23,506,538
========= ==========
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements
<PAGE>
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Fisher
Business
Predecessor Systems, Inc.
Nine Months Ended Nine Months Ended
September 30, 1996 October 31, 1996 Adjustments Pro Forma
------------------ ---------------- ----------- -----------
<S> <C> <C> <C> <C>
Systems sales and services $ 1,656,089 $ 324,621 $ - $ 1,980,710
- -------------------------- --------- --------- --------- ----------
Costs and expenses
- ------------------
Cost of goods sold 1,084,977 117,009 1,201,986
Research and development 234,178 234,178
Selling, general, and administrative 892,060 462,478 (e) 59,194 1,413,732
--------- --------- --------- ----------
2,211,215 579,487 59,194 2,849,896
--------- --------- --------- ----------
--------- --------- --------- ----------
Operating loss [ 555,126] [ 254,866] [ 59,194] [ 869,186]
- -------------- --------- --------- --------- ----------
Other income [expense]
- ---------------------
Gain [Loss] on asset disposal [ 27,528] [ 27,528]
Rental income 14,400 14,400
Interest expense [ 19,666] [ 51,298] (f) [ 25,877] [ 85,591]
(g) 11,250
Other income [ 35,000] [ 35,000]
--------- --------- --------- ----------
[ 67,794] [ 51,298] [ 14,627] [ 133,719]
--------- --------- --------- ----------
Loss before income taxes [ 622,920] [ 306,164] [ 73,821] [ 1,002,905]
Provision for income taxes - - - -
- -------------------------- --------- --------- --------- ----------
Net loss $[ 622,920] [ 306,164] [ 73,821] $[ 1,002,905]
========= ========= ========= ==========
Net loss per share $[ .04] $[ .04]
========= ==========
Shares outstanding (h) 8,506,538 23,506,538
========= ==========
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements
<PAGE>
HALIS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA FINANCIAL STATEMENTS
Balance Sheet - September 30, 1996:
- ----------------------------------
(a) To record the elimination of intercompany advances from Fisher to the
Predecessor.
(b) To write off the deferred merger costs.
(c) To record the issuance by Fisher of 15,000,000 shares of common stock to
the shareholders of the Predecessor in exchange for 100% of the outstanding
stock of the Predecessor in a transaction accounted for as the reverse
acquisition of Fisher by the Predecessor.
To adjust pro forma common stock issued and outstanding to 23,506,538
shares, consisting of 8,506,538 (per Fisher October 31, 1996 10Q) plus the
additional shares issued in the acquisitions.
(d) To record the satisfaction of $150,000 of a note payable due to a related
party through the transfer of certain shares among the shareholders of the
Predecessor.
Statement of Operations:
- -----------------------
For the year ended December 31, 1995 and for the nine months ended September 30,
- --------------------------------------------------------------------------------
1996:
- ----
(e) To adjust selling, general, and administrative expenses to reflect a new
employment contract to be entered into with an officer in conjunction with
the merger. The adjustment is the difference between the amount of the
employment contract and management fee expense to an affiliate of the
officer, which terminated June 1, 1996.
(f) To adjust interest expense to reflect interest on convertible promissory
notes, issued during the nine month period ended October 31, 1996, in the
amount of $1,470,000 at 7%.
(g) To adjust interest expense to reflect the satisfaction of related party debt
upon consummation of the merger. See note (d) above.
(h) Pro Forma shares outstanding include 23,506,358 shares which are the
8,506,538 shares of Fisher outstanding at October 31, 1996, plus 15,000,000
shares to be issued to the Parent of the Predecessor.
(i) Because of significant operating losses, no tax benefit is attributed to
entries (e) through (g) and the provision for income taxes is adjusted to
zero.
<PAGE>
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 hereunto duly authorized.
HALIS, INC.
By: /s/ Larry Fisher
-----------------------------------
Larry Fisher, President
Dated: January 30, 1997
-----------------------
31
