<PAGE> 1
Filed Pursuant to 424(b)(3)
Registration No. 333-34215
HALIS, INC.
SUPPLEMENT NO. 1 TO PROSPECTUS DATED OCTOBER 15, 1997
RECENT DEVELOPMENTS
DISPOSITION OF THE ORTHODONTIC BUSINESS
On December 31, 1997 HALIS Services, Inc. ("HALIS Services"), a
subsidiary of HALIS, Inc. (the "Company"), sold to InfoCure Corporation
("InfoCure") substantially all of the assets of the orthodontic practice
management software business (the "Orthodontic Business") that the Company had
acquired from Software Manufacturing Group, Inc. in January 1997. The
Orthodontic Business includes the development, marketing, selling and servicing
of computer hardware and software to orthodontic healthcare providers. The sale
to InfoCure was consummated pursuant to an Asset Purchase Agreement dated
December 31, 1997 (but effective as of December 1, 1997) by and among the
Company, HALIS Services and InfoCure (the "InfoCure Asset Purchase Agreement").
InfoCure paid HALIS Services $2 million in cash (the "Base Consideration
Amount"), subject to the Net Worth Adjustment and the EBITDA Adjustment
described below, and an affiliate of InfoCure assumed certain liabilities
related to the Orthodontic Business.
The Net Worth Adjustment shall be made as follows: If the Actual
Adjusted Net Worth is greater than the Target Adjusted Net Worth (the amount of
said excess hereinafter referred to as the "Net Worth Excess"), then the Base
Consideration Amount shall be increased $1.00 for every dollar of Net Worth
Excess. If the Actual Adjusted Net Worth is less than the Target Adjusted Net
Worth (the "Net Worth Shortfall"), then the Base Consideration Amount shall be
reduced $1.00 for every dollar of the Net Worth Shortfall. For purposes of the
foregoing, the term "Actual Adjusted Net Worth" means the book value of the
purchased assets less the assumed liabilities as reflected on the audited
balance sheet of HALIS Services dated November 30, 1997.
The term "Target Adjusted Net Worth" means $152,515.
After making the Net Worth Adjustment, the Base Consideration Amount is
also subject to the EBITDA Adjustment, as follows: If the Actual Annualized
EBITDA is greater than the Target Annualized EBITDA (the "EBITDA Excess"), then
the Base Consideration Amount shall be increased $3.20 for every dollar of
EBITDA Excess. If the Actual Annualized EBITDA is less than the Target
Annualized EBITDA (the "EBITDA Shortfall"), then the Base Consideration Amount
shall be reduced $3.20 for every dollar of the EBITDA Shortfall. For purposes of
the foregoing, the term "Actual Annualized EBITDA" means the earnings of HALIS
Services before interest, taxes, depreciation and amortization arising from the
Orthodontic Business as reflected on an audited income statement for the
11-month period ended November 30, 1997, but which amount shall be annualized to
reflect a full 12-month accounting period. The term "Target Annualized EBITDA"
means $541,850.
<PAGE> 2
In connection with the InfoCure Asset Purchase Agreement, the Company
and HALIS Services agreed to pay approximately $5,900 per month through January
1999 to a former employee of HALIS Services and not to compete in the
orthodontic practice management industry for a period of five years.
The amount of consideration under the InfoCure Asset Purchase Agreement
was determined by arms-length negotiations between informed business persons and
represents, in the Company's view, fair value for the Orthodontic Business.
The foregoing description of the sale of the Orthodontic Business to
InfoCure and the InfoCure Asset Purchase Agreement is qualified in its entirety
by reference to the terms of the InfoCure Asset Purchase Agreement attached as
Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 31,
1997.
SALE OF CERTAIN NON-HEALTH CARE ASSETS
On December 31, 1997, pursuant to an Asset Purchase Agreement of that
date by and between HALIS Services, as seller, and Communications Wiring and
Accessories, Inc. ("Communications Wiring"), as buyer (the "Communications
Wiring Asset Purchase Agreement"), HALIS Services sold to Communications Wiring
certain non-healthcare related assets and property of TG Marketing Systems and
Aubis Systems Integration, two business units of HALIS Services, for a purchase
price of $1 million and the assumption of certain liabilities (the "Purchase
Price"), subject to downward adjustment as hereinafter described. The non-
healthcare related assets and property include accounts receivable, computer
software, computer equipment, furniture, fixtures and leasehold improvements.
The Purchase Price is payable in monthly installments, commencing February 15,
1998, and continuing on the 15th day of each month thereafter (each, an
"Installment Payment") until the earlier of the date upon which the aggregate
amount of Installment Payments paid to HALIS Services shall equal the Purchase
Price or December 31, 2007. Each Installment Payment shall be equal to 20% of
the license fees, lease payments and royalties actually received by
Communications Wiring with respect to the purchased assets for the calendar
month immediately preceding the respective date upon which such Installment
Payment shall be due and payable; provided, however, that in the event that the
aggregate amount of all Installment Payments actually paid by Communications
Wiring to HALIS Services prior to December 31, 2007 (the "Paid Installments")
shall be less than $500,000, Communications Wiring shall pay to Seller an amount
equal to the difference between $500,000 and the Paid Installments on December
31, 2007. In the event that the aggregate amount of all Installment Payments
actually paid by Communications Wiring to HALIS Services prior to December 31,
2007 shall be equal to or greater than $500,000, Communications Wiring shall
have no further obligation to make installment payments to HALIS Services and
the entire Purchase Price shall be deemed to be equal to the Paid Installments.
To secure the payment of the Purchase Price by Communications Wiring,
HALIS Services retained a security interest in certain of the purchased assets
constituting or relating to proprietary software developed by HALIS Services.
Such security interest, however, does not guarantee that
2
<PAGE> 3
Communications Wiring will make the required Installment Payments as and when
they become due.
The amount of consideration under the Communications Wiring Asset
Purchase Agreement was determined by arms-length negotiations between informed
business persons and represents, in the Company's view, fair value for the
assets sold.
The foregoing description of the sale of certain non-healthcare related
assets to Communications Wiring is qualified in its entirety by reference to the
terms of the Communications Wiring Asset Purchase Agreement attached as Exhibit
10.2 to the Company's Current Report on Form 8-K dated December 31, 1997.
The following pro forma financial information relating to the sale of
the above-described assets is attached to this Supplement:
- Unaudited Pro Forma Condensed Consolidated Balance Sheet - September
30, 1997
- Unaudited Pro Forma Condensed Consolidated Statement of Operations -
Nine Months Ended September 30, 1997
- Notes to Unaudited Condensed Consolidated Pro Forma Financial
Statements
CHANGE IN ACCOUNTANTS
On January 5, 1998, the Company dismissed its independent auditors,
Habif, Arogeti & Wynne, P.C., and on the same date authorized the engagement of
Arthur Andersen LLP as its independent auditors for the fiscal year ended
December 31, 1997. Arthur Andersen LLP was formally engaged by the Company on
January 8, 1998. Each of these actions was approved by the Board of Directors of
the Company.
Habif, Arogeti & Wynne, P.C. audited the financial statements for the
Company for the fiscal year ended December 31, 1996. The report of Habif,
Arogeti & Wynne, P.C. on the financial statements of the Company for the fiscal
year ended December 31, 1996 contained an additional paragraph which emphasized
that there was substantial doubt about the ability of the Company to continue as
a going concern. Except as set forth in the preceding sentence, the report of
Habif, Arogeti & Wynne, P.C. did not contain any adverse opinion or a disclaimer
of opinion, nor was it qualified or modified as to uncertainty, audit scope, or
accounting principles.
Except as described herein, in connection with the audit of the fiscal
year ended December 31, 1996 and for the unaudited interim period through
January 5, 1998, there were no disagreements with Habif, Arogeti & Wynne, P.C.
on any matter of accounting principle or practice, financial statement
disclosure, or audit procedure or scope which disagreement, if not resolved to
the satisfaction of Habif, Arogeti & Wynne, P.C. would have caused it to make
reference to the subject matter of the disagreement in its report. Habif,
Arogeti & Wynne, P.C. has advised the Company, and the Company concurs, that the
Company's consolidated statement of cash flows for the nine months ended
September 30, 1997 is incorrect. The error is that the changes in assets and
liabilities included as adjustments to reconcile net loss to net cash used by
3
<PAGE> 4
operating activities include the effects of businesses acquired during the
period. The effect of this error was to increase the net cash used by operating
activities and decrease the cash used by financing activities. The Company
intends to correct this error in future filings.
Further, during the fiscal year ended December 31, 1996 and the
unaudited interim period through January 5, 1998, neither the Company or any of
its representatives sought the advice of Arthur Andersen LLP regarding the
application of accounting principles to a specific completed or contemplated
transaction or the type of audit opinion that might be rendered on the Company's
financial statements, which advice was an important factor considered by the
Company in reaching a decision as to the accounting, auditing or financial
reporting issue.
In connection with the audit of the fiscal year ended December 31, 1996
and for the unaudited interim period through January 5, 1998, Habif, Arogeti &
Wynne, P.C. did not advise the Company that (i) the internal controls necessary
for the Company to develop reliable financial statements did not exist; (ii)
that information had come to its attention that led it to no longer be able to
rely on management's representations, or that made it unwilling to be associated
with the financial statements prepared by management; (iii) that there existed a
need to expand significantly the scope of its audit, or that information had
come to the attention of Habif, Arogeti & Wynne, P.C. during the fiscal periods,
that if further investigated may (a) materially impact the fairness or
reliability of either: a previously issued audit report or the underlying
financial statements, or the financial statements issued or to be issued
covering the fiscal period subsequent to the date of the most recent financial
statements covered by an audit report (including information that may prevent it
from rendering an unqualified audit report on those financial statements), or
(b) cause Habif, Arogeti & Wynne, P.C. to be unwilling to rely on management's
representations or be associated with the Company's financial statements, and
due to the dismissal of Habif, Arogeti & Wynne, P.C. did not so expand the scope
of its audit or conduct such further investigation; or (iv) that information had
come to the attention of Habif, Arogeti & Wynne, P.C. that it concluded
materially impacts the fairness or reliability of either (a) a previously issued
audit report or the underlying financial statements, or (b) the financial
statements issued or to be issued covering the fiscal period subsequent to the
date of the most recent financial statements covered by an audit report
(including information that, unless resolved to the satisfaction of Habif,
Arogeti & Wynne, P.C., would prevent it from rendering an unqualified audit
report on those financial statements), and due to the dismissal of Habif,
Arogeti & Wynne, P.C., the issue has not been resolved to the satisfaction of
Habif, Arogeti & Wynne, P.C. to prior to its dismissal.
SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
On December 30, 1997, the Company received funds from the sale of a 4%
Convertible Debenture dated December 23, 1997 in the principal amount of
$200,000 to Tradewinds Investments, Ltd., a Bahamas corporation, pursuant to a
Convertible Debenture Subscription Agreement dated December 23, 1997. In
addition, on January 7, 1998, the Company received funds from the sale of a 4%
Convertible Debenture dated December 24, 1997 in the principal amount of
$100,000 to GEM SINGAPORE PTE LIMITED, a Nevis, West Indies corporation ("GEM
Singapore"), pursuant to a Convertible Debenture Subscription Agreement dated
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<PAGE> 5
December 19, 1997. The Debentures shall hereinafter be collectively referred to
as the "Debentures." In addition, the Company issued a total of 450,000 warrants
(the "Warrants") to purchase shares of the Company's common stock, $.01 par
value per share (the "Common Stock") to non-U.S. Persons. The Warrants were
distributed as follows: 250,000 to Tradewinds Investments, Ltd., 100,000 to Ms.
Kalpana Anant Joshi in India, and 100,000 to GEM Singapore. The Debentures and
the Warrants were issued to non-U.S. Persons with the assistance of GEM
Advisors, Inc. acting as a placement agent. The consideration received by the
Company for the Debentures and the Warrants was $300,000 in cash less certain
expenses, including payments of $2,500 in fees to the escrow agent and 9% of the
aggregate proceeds to GEM Advisors, Inc. as compensation for its services.
The Debentures are convertible into shares of Common Stock, the number
of which is calculated in accordance with the following formula:
Number of Shares issued upon Conversion = Principal (+ Interest, if
applicable)/Conversion Price, where
Principal = The Principal amount of the Debenture,
Interest = Principal x (N/365) x .04, where
N = the number of days between the date hereof and the Conversion Date
for the Debenture, and
Conversion Price = the lesser of (x) 100% of the average Closing Bid
Price, as that term is defined below, of the Shares for the ten (10) trading
days immediately preceding the date of the sale (the "Fixed Conversion Price"),
or (y) 65% of the average Closing Bid Price, as that term is defined below, of
the Shares for the ten (10) trading days immediately preceding the day prior to
the Conversion Date (the "Variable Conversion Price"). The Fixed Conversion
Price of the Debentures is approximately $.61.
For purposes hereof, the term "Closing Bid Price" shall mean the
closing bid price on the market as reported by the OTC Bulletin Board or
NASDAQ's National Market System or Small Capitalization System (NASDAQ) or
American Exchange Emerging Company Marketplace or if then traded on a different
national securities exchange, the closing sales price on the principal national
securities exchange on which it is so traded and if not available, the mean of
the daily high and low sales prices on such securities exchange on which it is
traded.
In the event that the Market Price of the Common Stock increases by
more than thirty percent (30%) above the original Fixed Conversion Price, the
holders shall have the right to receive in the form of an adjustment to the
original Fixed Conversion Price fifty percent (50%) of the amount in excess of
thirty percent (30%), and no more of such excess. In such event, the original
Fixed Conversion Price shall be adjusted to be:
C
-----------------
[(C/F) + (1.3)]/2
where: C = the bid price of the Common Stock at the time of
conversion;
and F = the original Fixed Conversion Price
5
<PAGE> 6
Each Warrant issued to Tradewinds Investments, Ltd. entitles the holder
thereof to purchase one share of Common Stock at exercise price of $.60 per
share. Each Warrant issued to Ms. Joshi and GEM Singapore also entitles the
holder thereof to purchase one share of Common Stock at an exercise price of
$.60 per share.
The offers and sales of the Debentures and the Warrants were made
pursuant to a claim of exemption under Rules 901 and 903 of Regulation S
promulgated by the Securities and Exchange Commission or, alternatively, under
Section 4(2) of the Securities Act of 1933, as amended. The sales of the
Debentures and the Warrants were made in "offshore transactions" (as defined in
Regulation S) and no "directed selling efforts" (as defined in Regulation S)
were made by the Company or any of its affiliates. The purchasers of the
Debentures and the Warrants (the "Purchasers") are entities organized under the
laws of jurisdictions other than the United States and therefore are not "U.S.
Persons" (as defined in Regulation S). Moreover, the Purchasers represented and
warranted, among other things, that at the time of the offers and sales they
were located outside the United States, and that neither the Purchasers nor any
of their affiliates had engaged in any "directed selling efforts" (as defined in
Regulation S). Appropriate legends were affixed to the Debentures and the
certificates for the Warrants. In addition, the Company did not use any general
advertisement or solicitation in connection with the offer or sale of the
Debentures or Warrants to the Purchasers and the Purchasers represented and
warranted that they were purchasing the Debentures and Warrants for investment
only and not with a view to distribution.
SELLING SHAREHOLDERS
Subsequent to the date of the Prospectus, Charles Cone, Jr., a Selling
Shareholder, transferred by gift 314,931 shares of Common Stock owned by Mr.
Cone and reflected in the table under the caption "Selling Shareholders."
Accordingly, the Prospectus is amended to reduce the number of shares
beneficially owned by Mr. Cone by 314,931 shares and adding to the selling
shareholder table the following recipients of the gifted shares:
<TABLE>
<CAPTION>
BEFORE THE OFFERING AFTER THE OFFERING
----------------------- ---------------------------
NUMBER SECURITIES TO NUMBER
NAME OF BENEFICIAL BENEFICIALLY PERCENT BE SOLD BENEFICIALLY PERCENT
OWNER OWNED OF CLASS IN OFFERING OWNED OF CLASS
- ----------------------------------- ------------ -------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Juan G. Alancon ................... 920 * 920 0 0
Paul Anderson ..................... 307 * 307 0 0
Rebecca Baisch .................... 920 * 920 0 0
Sandra M. Barber .................. 614 * 614 0 0
Timothy J. Baxter ................. 1,841 * 1,841 0 0
Campbell Brett Bentson ............ 14,000 * 14,000 0 0
Christopher Bryan Bentson ......... 20,000 * 20,000 0 0
</TABLE>
6
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C> <C>
Dana Pennstroin Bentson ........... 20,000 * 20,000 0 0
Hunter Colum Bentson .............. 14,000 * 14,000 0 0
O'Malley Anne Bentson ............. 12,000 * 12,000 0 0
Todd B. Blankenbecker ............. 1,687 * 1,687 0 0
Richard A. Clark .................. 3,882 * 3,882 0 0
Dawn R. Coleman ................... 614 * 614 0 0
Laura S. Cooney ................... 1,841 * 1,841 0 0
Jo Ann Corso ...................... 1,841 * 1,841 0 0
Karen Crisp ....................... 1,841 * 1,841 0 0
Anne DesRosier .................... 614 * 614 0 0
Elisabeth Ann M. Foley ............ 1,841 * 1,841 0 0
Sara Foreman ...................... 614 * 614 0 0
Eric Graziano ..................... 307 * 307 0 0
Glen D. Gullet .................... 1,841 * 1,841 0 0
Catherine D. Hampton .............. 1,841 * 1,841 0 0
Yvette Handy ...................... 1,489 * 1,489 0 0
David A. Hunt ..................... 1,074 * 1,074 0 0
Janice K. Jennings ................ 614 * 614 0 0
Laura Kurt ........................ 920 * 920 0 0
Barbara Linn ...................... 614 * 614 0 0
Simon Marchant .................... 1,841 * 1,841 0 0
George McCoy ...................... 1,841 * 1,841 0 0
Diane Oelschlager ................. 920 * 920 0 0
F. Cole Pate ...................... 20,000 * 20,000 0 0
Grace T. Pate ..................... 15,000 * 15,000 0 0
Lisa Robinson ..................... 1,841 * 1,841 0 0
Samuel L. Shober .................. 92 * 92 0 0
Brett Elliott Smith ............... 1,841 * 1,841 0 0
Samuel O. Sokoh ................... 1,841 * 1,841 0 0
Ward Cicero Swain III ............. 1,841 * 1,841 0 0
Kenneth A. Swinney, custodian for
Andrew T. Swinney ............... 20,000 * 20,000 0 0
Ann B. Swinney .................... 20,000 * 20,000 0 0
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C> <C> <C> <C>
Kenneth A. Swinney, custodian for
Jacob R. Swinney ................ 20,000 * 20,000 0 0
Kenneth A. Swinney ................ 20,000 * 20,000 0 0
Clarissa A. Windham ............... 20,000 * 20,000 0 0
Martha Taylor Windham ............. 18,155 * 18,155 0 0
Mary Elizabeth Windham ............ 20,000 * 20,000 0 0
Stephen D. Windham ................ 20,000 * 20,000 0 0
Susan Yanez ....................... 1,841 * 1,841 0 0
-------
Total....................... 314,931
=======
</TABLE>
- -----------------------
* Less than 1% of shares outstanding.
PLAN OF DISTRIBUTION
Certain Selling Shareholders may elect to sell shares of the Common
Stock in privately negotiated transactions in exchange for restricted shares of
Common Stock and/or Warrants of the Company.
The date of this Supplement is January 16, 1998
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<PAGE> 9
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet of
HALIS, Inc. gives effect to the sales of three business units, Software
Manufacturing Group ("SMG"), TG Marketing System ("TGM"), and Aubis Systems
Integration ("ASI") by HALIS, Inc. as if those sales had occurred on September
30, 1997. The Unaudited Pro Forma Condensed Consolidated Statements of
Operations for HALIS for the period ended September 30, 1997 gives retroactive
effect to the sales of the business units as if they had occurred on January 1,
1997. The Unaudited Pro Forma Balance Sheet and Statement of Operations do not
purport to be indicative of the actual financial position or the results of
operations of HALIS had the sales been completed as of the dates above. The
assets of SMG were sold to Infocure Corporation, an unrelated entity, for
approximately $1.8 million in cash on December 31, 1997. HALIS retained the
accounts payable and the sale was effective as of December 31, 1997 to
Communications Wiring and Accessories, Inc. in exchange for the assumption of
liabilities and certain future revenue.
<PAGE> 10
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
ASSETS
------
HALLS, INC
AND BUSINESS
SUBSIDIARIES UNITS SOLD ADJUSTMENTS PROFORMA
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Current Assets $ 2,802,830 $ (749,004) $ 1,734,682 (b) $ 3,788,508
Property and Equipment 1,068,456 (295,746) 2,000 744,710
Goodwill 13,204,362 (3,063,479) - 10,140,883
Capitalized Software Development
costs 3,430,909 (3,180,562) - 250,347
Other Assets 1,004,834 (64,877) - 939,957
------------ ----------- ------------ ------------
Total Assets $ 21,511,391 $(7,353,668) $ 1,736,682 $ 15,894,405
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
HALLS, INC
AND BUSINESS
SUBSIDIARIES UNITS SOLD ADJUSTMENTS PROFORMA
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Current Liabilities $ 4,475,867 $(1,144,464) $ 1,080,869 (c) $ 4,412,272
Long Term Debt 263,512 (114,652) - 148,860
------------ ----------- ------------ ------------
Total liabilities 4,739,379 (1,259,116) 1,080,869 4,561,132
------------ ----------- ------------ ------------
Stockholders' Equity (Deficit)
- ------------------------------
Common stock, par value $.01 417,622 417,622
Additional paid-in capital 33,766,737 - 33,766,737
Parent Investment in Sub. - Opms - -
Common stock subscribed 15,447 15,447
Accumulated deficit (17,421,044) (6,094,552) 655,813 (b) (22,859,783)
Less: Treasury stock at cost (6,750) - - (6,750)
------------ ----------- ------------ ------------
Total stockholders' equity 16,772,012 (6,094,552) 655,813 11,333,273
------------ ----------- ------------ ------------
Total Liabilities & Equity $ 21,511,391 $ (7,353,668) $ 1,736,682 $ 15,894,405
============ ============ ============ ============
Common stock issued and
outstanding 41,762,200 41,762,200
============ ============
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements.
<PAGE> 11
HALIS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD ENDING SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
HALIS, INC
AND BUSINESS
SUBSIDIARIES UNITS SOLD ADJUSTMENTS PROFORMA
------------ ----------- ----------- ------------
<S> <C> <C>> <C> <C>
System Sales and other revenue $ 6,919,135 $(3,032,369) $ - $ 3,886,766
- ------------------------------ ----------- ----------- ----------- ------------
Costs and expenses
- -----------------
Cost of sales and revenue 2,395,384 (717,734) - 1,677,650
Selling, general and administrative 7,867,795 (2,453,630) - 5,414,165
Research and development 999,493 - - 999,493
----------- ----------- ----------- ------------
11,262,672 (3,171,364) - 8,091,308
----------- ----------- ----------- ------------
Operating Income (loss) (4,343,537) 138,995 - (4,204,542)
- --------------------- ----------- ----------- ----------- ------------
Other income (expense)
Gain (loss) on sale of Business Units - - (5,438,739)[d] (5,438,739)
Gain (loss) on asset disposal 8,678 - - 8,678
Interest expense (122,621) 2,892 - (119,729)
Interest income 31,273 (834) - 30,439
Other income (expense) 3,253 (3,121) - 132
Merger costs (32,137) - - (32,137)
----------- ----------- ----------- ------------
(111,554) (1,063) (5,438,739) (5,551,356)
----------- ----------- ----------- ------------
Net income (loss) $(4,455,091) $ 137,932 (5,438,739) $ (9,755,898)
=========== =========== =========== ============
Net loss per common share (0.14) - - (0.29)
Weighted average shares outstanding 32,964,701 - - 32,964.701
=========== =========== =========== ============
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements.
HALIS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA FINANCIAL STATEMENTS
BALANCE SHEET; September 30, 1997
[a] This represents September 30, 1997 balance sheet for SMG, TGM and ASI
business units.
[b] To reflect the cash proceeds of the sale of SMG and added assets
retained or reduced in the sale of TGM and ASI.
[c] To reflect the current liabilities of the Business Units retained by
Halis.
STATEMENT OF OPERATIONS:
[d] To reflect estimated loss on disposition of the Business Units.
[e] This represents the statement of operations for the Business Units
for the nine months ended September 30, 1997.
