<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 0-26532
PHOENIX INFORMATION SYSTEMS CORP.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3337797
- --------------------------------------------- ----------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
100 Second Avenue South, Suite 1100
St. Petersburg, Florida 33701
- --------------------------------------------- ----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (813) 894-8021
---------------------------
Not Applicable
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 .
------- ------
As of September 30, 1997, the Registrant had 49,867,200 shares of common stock
issued and outstanding.
<PAGE> 2
PHOENIX INFORMATION SYSTEMS CORP.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 1997 and
September 30, 1997 (Unaudited) 3
Unaudited Consolidated Statements of Operations
Three Months and Six Months ended
September 30, 1997 and
September 30, 1996 and Inception to
September 30, 1997 4
Unaudited Consolidated Statements of Cash Flows
Six Months ended
September 30, 1997 and
September 30, 1996 and Inception to
September 30, 1997 5
Notes to Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 9
PART II. OTHER INFORMATION 10 - 11
SIGNATURE PAGE 12
EXHIBIT INDEX 13
</TABLE>
2
<PAGE> 3
PHOENIX INFORMATION SYSTEMS CORP. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 MARCH 31, 1997
------------------ --------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,472,927 $ 7,012,277
Securities 22,000 22,000
Trade receivables 235,625 437,707
Receivable from related parties 8702 --
Interest receivable 6,368 26,112
Prepaids 370,130 699,390
------------ ------------
Total current assets 3,115,752 8,197,486
Property and equipment, net 1,638,518 1,672,522
Investment in American Aviation Ltd. 7,500,000 7,500,000
Deposits and other assets 172,873 154,113
Goodwill, net 209,992 256,660
------------ ------------
Total assets $ 12,637,135 $ 17,780,781
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable 108,762 113,766
Accounts payable 1,083,203 1,640,406
Accrued payroll and payroll taxes 283,922 305,048
------------ ------------
Total current liabilities 1,475,887 2,059,220
Dividends payable 67,456 75,704
Minority interest 1,301,900 896,892
Notes payable, less current portion -- 50,268
------------ ------------
1,369,356 1,022,864
Total liabilities 2,845,243 3,082,084
------------ ------------
Commitments and contingencies
Stockholder's equity:
Series A convertible preferred stock, $.01 par value, 1,250,000 shares
authorized, 201,820 and 209,750 issued
and outstanding at September 30, 1997 and March 31, 1997, respectively 2,018 2,098
Series B convertible preferred stock, $.01 par value
1,250,000 shares authorized, 1,058,325 and 1,194,500 issued
and outstanding at September 30, 1997 and March 31, 1997, respectively 10,583 11,945
Series C convertible preferred stock, $.01 par value,
1,500,00 shares authorized, 896,866 and 853,994 issued
and outstanding at September 30, 1997 and March 31, 1997 respectively 8,969 8,540
Common stock, $.01 par value, 125,000,000 shares authorized,
49,867,200 and 49,105,212 shares issued and outstanding
at September 30, 1997 and March 31, 1997, respectively 498,671 491,052
Additional paid-in capital 47,716,261 46,649,030
Losses that have accumulated during the development stage (38,354,610) (32,373,968)
------------ ------------
9,881,892 14,788,697
Treasury Stock, at cost, 31,579 common shares (90,000) (90,000)
------------ ------------
Total stockholders' equity 9,791,892 14,698,697
------------ ------------
Total liabilities and stockholders' equity $ 12,637,135 $ 17,780,781
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
PHOENIX INFORMATION SYSTEMS CORP. AND SUBSIDIARIES
(a development stage company)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months and six months ended September 30, 1997 and 1996 and
cumulative for the period from inception of development stage activities, April
1, 1989, through September 30, 1997
<TABLE>
<CAPTION>
Three Months Six Months Cumulative
Ended September 30, Ended September 30, Since
1997 1996 1997 1996 April 1, 1989
---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C>
Travel Commissions, net $ -- $ 84,722 $ -- $ 198,504 $ 813,879
Management fee income -- -- -- -- 138,021
Airline/Cargo booking revenues 28,106 -- 58,668 -- 152,489
Reservation center revenues 275,671 165,356 792,458 266,348 1,873,935
License fee income 2,000 6,000 8,000 12,000 103,350
------------ ------------ ----------- ------------ ------------
Revenues 305,777 256,078 859,126 476,852 3,081,674
Start-up and organizational expenses (3,501,627) (2,993,551) (6,387,414) (5,575,899) (41,979,498)
Interest and dividend income 34,341 24,522 100,885 66,562 445,396
------------ ------------ ----------- ------------ ------------
Net loss before minority interest
in net loss of subsidiary (3,161,509) (2,712,951) (5,427,403) (5,032,485) (38,452,428)
------------ ------------ ----------- ------------ ------------
Minority interest in net loss of subsidiary 308,940 -- 595,001 -- 2,608,109
------------ ------------ ----------- ------------ ------------
Net loss (2,852,569) (2,712,951) (4,832,402) (5,032,485) (35,844,319)
------------ ------------ ----------- ------------ ------------
Preferred stock dividends (527,959) -- (1,148,240) -- (2,510,291)
------------
Net loss applicable to common (3,380,528) (2,712,951) (5,980,642) (5,032,485) (38,354,610)
stock ============ ============ =========== ============ ============
Net loss per common share
outstanding $ (.07) $ (.06) $ (.12) $ (.11)
============ ============ =========== ============
Weighted average number of common
shares outstanding 49,533,939 46,275,834 49,527,689 46,048,741
============ ============ =========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
PHOENIX INFORMATION SYSTEMS CORP. AND SUBSIDIARIES
(a development stage company)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended September 30, 1997 and 1996
and cumulative for the period from inception of development
stage activities, April 1, 1989, through September 30, 1997
<TABLE>
<CAPTION>
Six Months
Ended September 30, Cumulative
---------------------------- Since
1997 1996 April 1, 1989
------ ------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(4,832,402) $(5,032,485) $(35,844,319)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense 643,495 551,409 3,197,884
Compensation paid through issuance of stock 432,000 210,000 1,237,964
Transaction fee -- -- 1,140,000
Services paid through issuance of stock 62,143 193,010 1,760,450
Common stock options and warrants issued -- -- 401,010
as compensation
Common stock issued as an adjustment of the -- -- 193,408
Tranch E note conversion price
Warrants issued as preferred stock non- -- -- 591,031
conversion incentive
Write-off of amount due from joint venture partner -- -- 737,662
Rent paid through in-kind contribution 157,855 170,460 669,235
Minority interest in net loss of subsidiary 405,005 -- 52,855
Other -- -- 157,985
----------- ------------ ------------
(3,131,904) (3,907,606) (25,704,835)
Changes in assets and liabilities:
Prepaids, deposits and trade receivables 162,728 (186,194) (801,909)
Accounts payable (557,203) (1,098,184) 459,795
Accrued payroll and payroll taxes (21,126) 28,935 227,345
Accrued interest 19,744 (8,091) 220,629
----------- ------------ ------------
Net cash used in operating activities (3,527,761) (5,171,140) (25,598,975)
----------- ------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (562,823) (285,156) (3,679,983)
Purchase of securities -- -- (22,000)
Investment in American Aviation Ltd. -- -- (7,500,000)
----------- ------------ ------------
Net cash used in investing activities (562,823) (285,156) (11,201,983)
----------- ------------ ------------
Cash flows from financing activities:
Issuance of common stock -- -- 1,858,095
Proceeds from exercise of stock options -- -- 147,557
Issuance of preferred stock -- 8,675,000 23,320,521
Stock subscriptions -- -- 1,297,000
Proceeds from notes payable -- -- 538,000
Preferred stock dividends (384,792) (130,775) (641,226)
Proceeds from related parties -- -- 15,595,287
Payments on notes payable (55,272) (39,579) (691,262)
Payments to related parties (8,702) (1,032,560) (2,162,281)
Payments on capital lease obligation -- (3,989) 12,194
----------- ------------ ------------
Net cash provided by financing activities (448,766) 7,468,097 39,273,885
----------- ------------ ------------
Increase (decrease) in cash and cash equivalents (4,539,350) 2,011,801 2,472,927
Cash and cash equivalents, beginning of period 7,012,277 2,078,510 --
----------- ------------ ------------
Cash and cash equivalents, end of period $ 2,472,927 $ 4,090,311 $ 2,472,927
=========== ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
PHOENIX INFORMATION SYSTEMS CORP. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
(unaudited)
NOTE A
The accompanying consolidated financial statements include the accounts of
Phoenix Information Systems Corp. ("Phoenix Information") and its subsidiaries,
Phoenix Systems Group, Inc. (wholly owned since March 27, 1995), Phoenix
Systems Ltd. ("PSL" wholly owned since November 11, 1993), Hainan Phoenix
Information Systems, Ltd. (70% owned since November 22, 1993), Phoenix
Transaction Services, Inc. (wholly owned since June 3, 1997), and American
International Travel Agency, Inc. ("AIT", wholly owned since September 15, 1994
and sold in November, 1996). The consolidated group of companies is
collectively referred to herein as "Phoenix" or the "Company". All significant
intercompany accounts and transactions have been eliminated.
On November 15, 1996, in a trilateral agreement between Phoenix, China
Southern Airlines Company Ltd. ("China Southern"), and the Company's former
Joint Venture partner, Hainan Airlines, China Southern acquired the entire
equity interest held by Hainan Airlines for $2,580,000. Furthermore, China
Southern agreed to invest an additional $4,780,000 in cash and real estate
capital contributions in exchange for an additional 15% interest in the Joint
Venture, which will raise China Southern's total stake to 45% upon the
completion of the additional contribution. Hainan Airlines continues as a
customer of the Joint Venture on a limited basis.
On November 20, 1996, the disinterested members of the Board of Directors
of Phoenix approved the sale of American International Travel Agency, Inc. to
Visitors Services, Inc. (a Company controlled by Robert P. Gordon, Chairman of
the Board of Phoenix) for 31,579 shares of Phoenix's common stock valued at
$90,000.
NOTE B
The financial information reflects all normal recurring adjustments that,
in the opinion of management, are deemed necessary for a fair presentation of
the results for the interim periods. The results for the interim periods are
not necessarily indicative of the results to be expected for the year.
NOTE C
The enclosed summarized financial information does not include all
disclosures required to be included in a complete set of financial statements
prepared in conformity with generally accepted accounting principles. The Form
10-K, for the fiscal year ended March 31, 1997 should be read in conjunction
with the data herein.
6
<PAGE> 7
PHOENIX INFORMATION SYSTEMS CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
INTRODUCTORY STATEMENT
Phoenix Information Systems Corp. ("Phoenix" or the
"Company") is a development-stage information systems and services company that
has developed airline and hotel travel reservation systems.
In fiscal 1996, Phoenix commenced operations in the United
States and China. Efforts are under way to enlist additional airlines, hotels
and other travel service providers. While Phoenix has now commenced operations,
the Company has only a brief operating history and has yet to generate
significant revenues or earnings.Consequently, Phoenix's continued existence
has depended, primarily, upon its ability to raise capital.
In China, Phoenix has installed and begun to operate its
advanced computerized travel information network for domestic airlines. Phoenix
provides state-of-the-art, travel-related information services to China through
its 70% owned joint venture with China Southern Airlines Company, Ltd.
RESULTS OF OPERATIONS
During the six months ended September 30, 1997, and the
fiscal years ended March 31, 1997, 1996 and 1995, the Company sustained net
losses of $5,980,642, $12,393,872, $9,704,318, and $4,841,824, respectively.
Losses are anticipated to continue until the data network in China is fully
implemented and utilized by China Southern for its reservation and data
processing services.
While Phoenix has concentrated its sales efforts in China,
the Company has also focused on small to medium domestic carriers that could
utilize the Company's reservation system. In fiscal 1995, Phoenix entered into
an Agreement with Eastwind Airlines, Inc. ("Eastwind") to provide Eastwind with
a complete reservation system to manage all sales, airport and operations
functions. In addition, Phoenix implemented a reservation center that processed
all Eastwind reservations as of the second quarter of fiscal 1996. Furthermore,
in May 1996, the Company commenced commercial operations with Laker Airlines.
Eastwind terminated its relationship with the Company on May 17, 1997. The
Company is actively pursuing other small to medium carriers to expand the
customer base for its reservation center.
For the quarter ended September 30, 1997, the Company had
revenues of $305,777 versus $256,078 for the quarter ended September 30, 1996,
an increase of 19% as the revenue from Laker Airlines more than offset the
prior-year revenue associated with AIT. For the quarter ended September 30,
1997, the Company had start-up and organizational expenses of $3,501,627
compared to $2,993,551 for the quarter ended September 30, 1996, an increase of
$508,076 or 17%. The growth in expenses was concentrated in stock option
compensation (+$81,000), increased business travel to China (+$149,261),
communications expenses (+$117,557), and consulting expenses primarily in
support of the Joint Venture (+$169,042).
7
<PAGE> 8
For the six months ended September 30, 1997, the Company had start-up and
organizational expenses of $6,387,414 as compared to $5,575,899 for the
comparable prior year period, an increase of $811,515 or 15%. The growth in
spending for the fiscal year-to-date period was concentrated in the same
categories: stock option compensation (+$222,000), communications expense
(+$244,008), consulting fees (+$161,238) and travel, primarily to China
(+$245,398).
LIQUIDITY AND CAPITAL RESOURCES
Working Capital; Financial Instability
As of September 30, 1997, Phoenix had stockholders' equity of
$9,791,892 and working capital of $1,639,865. Phoenix has not generated
significant revenues, earnings or history of operations from inception through
September 30, 1997.
Phoenix continues its efforts to raise funds in order to
assure that the Company will have sufficient capital to meet its obligations
and to implement its proposed operations and plans through late 1998, at which
time operating cash flow is projected to turn positive. However, no assurances
can be given that such efforts will be successful.
For the six months ended September 30, 1997 net cash used in
operations declined by $1,643,379 or 32% from the six months ended September
30, 1996, principally due to lower losses, a significant paydown of accounts
payable during the six months ended September 30, 1996, and the recording in
the period ending September 30, 1997 of the minority interest in the net loss
of Hainan Phoenix Information Systems, Ltd. Net cash provided by financing
activities declined by $7,916,863 during the six months ended September 30,
1997 from the comparable prior year period. A net outflow of $448,766 occurred
during the six months ended September 30, 1997, primarily associated with the
payment of preferred stock dividends. The six months ended September 30, 1996
had a net inflow from financing activities of $7,468,097 that resulted from the
issuance of the Series A and B 6% convertible preferred stock, offset partly by
payments to related parties.
In April 1996, Phoenix issued $5,000,000 of Series A 6%
convertible preferred stock. The preferred stock was convertible into common
stock at a 15% discount to market, originally subject to a maximum conversion
price of $4.00 per share and a minimum of $2.00 per share. The market value of
the Company's common stock at the date of issuance of the Series A 6%
convertible preferred stock was below the $2.00 per share minimum conversion
price. If not converted by the purchaser prior to the second anniversary of the
issuance date, the preferred stock will automatically be converted into common
stock. During the six months ended September 30, 1997, 7,930 shares of Series A
convertible preferred stock were converted into 25,000 shares of the Company's
common stock.
In September 1996, Phoenix issued $4,000,000 of Series B 6%
convertible preferred stock. The preferred stock is convertible into common
stock at the market value of the Company's common stock at the date of
conversion. If not converted by the purchaser prior to the second anniversary
of the issuance date, the preferred stock will automatically be converted into
common stock. In conjunction with the issuance of the Series B shares, the
discount on the Series A convertible preferred stock was amended from 15% to
20% and the maximum conversion price of $4.00 per share and minimum of $2.00
per share were removed. The Company recorded a Series A 6% convertible
8
<PAGE> 9
preferred stock dividend of $658,015 for the difference between the conversion
prices of the Series A 6% convertible preferred stock and the fair market value
of the Company's common stock at the date of the amendment. During the six
months ended September 30, 1997, 136,175 shares of Series B convertible
preferred stock were converted into 663,038 shares of the Company's common
stock.
On December 23, 1996, Phoenix acquired for $7,500,000 a 25%
interest in American Aviation Limited, through the exercise of an option. The
acquisition was financed by the issuance of 833,333 shares of Series C
Convertible Preferred Stock for $15,000,000 to S-C Phoenix Partners. American
Aviation is a company owned by affiliates of Quantum Industrial Holdings Ltd.,
George Soros and Purnendu Chatterjee. American Aviation's sole asset is a 21%
interest in Hainan Airlines, which it purchased for $25,000,000 in December
1995. Phoenix accounted for the investment by the cost method, because it has
no influence on the operations of American Aviation Ltd. despite holding a 25%
interest. Phoenix can neither sell or collateralize the investment without the
unanimous consent of the owners, who have stated that material financial
concessions would be required of Phoenix for such consent.
S-C Phoenix Partners ("SC"), an investment partnership also
comprised of affiliates of Quantum Industrial Holdings Ltd., George Soros, and
Purnendu Chatterjee, is a major shareholder of Phoenix, holding both common
stock and Series C convertible preferred stock.
Reference is made to the Company's Form 10-K for the fiscal
year ended March 31, 1997, for a complete description of certain financing
transactions entered into by the Company to meet its operating and investment
objectives.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings:
Ungerleider v. Robert P. Gordon, Phoenix Information Systems Corp., et al.
On August 7, 1996, the District Court granted Phoenix's
motion to dismiss substantial portions of Plaintiff's claims. The court
rejected Plaintiff's claims of fraudulent inducement to enter into the
Settlement Agreement, which effectively precludes Plaintiff from trying to
enforce a finders fee agreement or any of the options, payments, or other
rights which he released as part of the Settlement Agreement. Plaintiff was
given leave to amend his Complaint, but the court's order required him to do so
in a manner consistent with the court's order, which precludes Plaintiff's
claims related to alleged oral promises made prior to the signing of the
Settlement Agreement. On August 22, 1996, Plaintiff filed a Second Amended
Complaint, which in its first eight counts essentially reiterated the claims
which the District Court dismissed on August 7, 1996. Plaintiff also has sued
Phoenix for allegedly participating in repossessing 1.2 million shares of
Phoenix stock from Plaintiff and failing to perform oral promises which
Plaintiff contends were part of the Settlement Agreement. The Defendants have
moved to dismiss or strike the Second Amended Complaint, in part because the
allegations contradict the rulings contained in the District Court's August 7,
1996 order. The case was referred to mediation for settlement discussions.
However, mediation has been postponed because Plaintiff's counsel moved for and
was granted leave to withdraw from the case as reflected by the court's
September 2, 1996 order. On January 16, 1997, new counsel entered an appearance
on behalf of Plaintiff.
Reference is made to Item 3 of the Company's Form 10-K, for
the fiscal year ended March 31, 1997, for additional information regarding this
proceeding.
Charles Chang and Juliette Chang v. Robert P. Gordon and Phoenix Information
Systems Corp.
The motion of defendants Robert P. Gordon and Phoenix to
dismiss the Amended Complaint in this action has been fully submitted and is
awaiting decision. The Court has stayed discovery in the action pending a
decision on the motion to dismiss.
Reference is made to Item 3 of the Company's Form 10-K for
the fiscal year ended March 31, 1997, for additional information regarding this
proceeding.
ITEM 2. Changes in Securities: None
ITEM 3. Defaults Upon Senior Securities: None
ITEM 4. Submissions of Matters to a Vote of Security Holders: None
ITEM 5. Other Information:
Phoenix Transaction Services, Inc. ("PTS"), a wholly-owned
subsidiary of the Company, was established on June 3, 1997. PTS now manages the
existing U.S. reservations and call center operation, which was previously
controlled by PSL. The goal of PTS is to establish ventures in volume-
10
<PAGE> 11
intensive transaction environments such as passenger reservation services,
airline cargo services, and hotel reservation services. These ventures will be
created through alliances, partnerships, and acquisitions. PTS would bring
industry knowledge and proprietary solutions, built or acquired, to the
ventures, while the partners would have the facility, manpower, and management
responsibilities. PTS is responsible for securing strategic partners and
achieving revenue growth.
On June 23, 1997, the Company and China Southern Airlines,
China's largest airline, with a 21 percent domestic market share, executed the
PHOENIX-AIR Management System (PAMS) Service Contract with Hainan Phoenix
Information Systems Ltd., Phoenix's 70 percent-owned joint venture company in
China. Under the terms of this 46 year agreement, China Southern will book all
of its airline reservations and procure data processing and other services from
the Joint Venture. The Joint Venture has already installed a Stratus fault
tolerant server as a test system in Guangzhou and is proceeding with
installation of the data network across China.
On June 26, 1997, Hainan Airlines Co., Ltd. completed a
Public Offering ("Offering") and was listed on the Shanghai Stock Exchange. The
Offering was for 71 million Chinese B-shares at $0.47 per share, representing
15 percent of Hainan's outstanding shares. The B-shares are a class of Chinese
stock that can be purchased by foreigners. Affiliates of Quantum Industrial
Holdings Ltd., George Soros, and Purnendu Chatterjee established American
Aviation in December 1995, and Phoenix arranged for American Aviation to
purchase a 25 percent interest in Hainan Airlines. For arranging this purchase,
Phoenix obtained an option to purchase a portion of American Aviation. In
December 1996, Phoenix paid $0.30 per Hainan share to exercise its option to
purchase a 25 percent interest in American Aviation Limited, which owns 100.04
million shares of Hainan Airlines. The American Aviation investment in Hainan
Airlines represented the first equity investment in a Chinese airline by a
foreign investor. Hainan Airlines is one of China's fastest growing regional
carriers and a customer of the Joint Venture with China Southern on a limited
basis. As a result of the Offering, American Aviation Limited now holds a 21%
interest in Hainan Airlines.
On July 30, 1997 China Southern, the Company's Joint Venture
partner, completed its public offering in the United States of 20.6 million
American Depository Shares (ADS). The shares are trading on the New York Stock
Exchange under the ZNH symbol. The offering, managed by Goldman Sachs (Asia)
L.L.C. as the global coordinator, was priced at $30.66 per ADS share.
<TABLE>
<CAPTION>
ITEM 6. Exhibits and Reports on Form 8-K:
<S> <C>
(a) Exhibits
11) Earnings Per Share - See Consolidated Statement of Operations
27) Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K - None
</TABLE>
11
<PAGE> 12
PHOENIX INFORMATION SYSTEMS CORP.
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.
PHOENIX INFORMATION SYSTEMS CORP.
---------------------------------
(Registrant)
Dated: October 29, 1997 /s/ DELBERT F. BLOSS
---------------------------------
Delbert F. Bloss, Chief Executive Officer
/s/ PETER J. FORD
---------------------------------
Peter J. Ford, Vice President and
Chief Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT DESCRIPTION
<S> <C>
11) Earnings Per Share - See Consolidated Statement of Operations
27) Financial Data Schedule (for SEC use only)
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,472,927
<SECURITIES> 22,000
<RECEIVABLES> 235,625
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,115,752
<PP&E> 4,360,481
<DEPRECIATION> 2,721,963
<TOTAL-ASSETS> 12,637,135
<CURRENT-LIABILITIES> 1,475,887
<BONDS> 0
0
21,570
<COMMON> 498,671
<OTHER-SE> 9,271,651
<TOTAL-LIABILITY-AND-EQUITY> 12,637,135
<SALES> 859,126
<TOTAL-REVENUES> 859,126
<CGS> 0
<TOTAL-COSTS> 6,387,414
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,980,642)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,980,642)
<EPS-PRIMARY> $(.12)
<EPS-DILUTED> 0
</TABLE>
