SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission File
March 31, 1996 Number 0-15520
ORBIS, INC.
(Exact name of registrant as specified in charter)
RHODE ISLAND 05-0396504
(State or other jurisdiction (IRS - Employer Identification No.)
of incorporation or organization)
2 Charles Street
Providence, RI 02904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (401) 861-4228
Securities registered pursuant to
Section 12(b) of the Act: None
Securities registered pursuant to
Section 12(g) of the Act: Common Stock, $.01 par value
Preferred Stock, $1.00 par value
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 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
------ -----
Aggregate market value, as of March 31,1996 of Common Stock held by non
affiliates of the registrant: $101,028.31
Number of shares of Common Stock outstanding at March 31, 1996:
9,450,000 (does not include 80,468 shares of treasury stock)
Number of shares of Preferred Stock outstanding at March 31, 1996:
0
- --------------------------------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Certain Exhibits, as indicated in the Exhibit Index located on page 10, are
incorporated by reference and were previously filed as Exhibits to the Company's
prior annual reports on Form 10-K and are hereby incorporated herein by
reference.
1
INDEX TO ITEMS
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<TABLE>
<CAPTION>
PART I PAGE
<S> <C>
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . 5
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters . . . . . . . 6
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 7. Management's Discussion and Analysis of Financial condition and Results of Operations . . 7
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . 8
Item 9. Disagreements on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . 8
PART III
Item 10. Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . 9
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . 10
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-k . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
2
PART I
ITEM 1: BUSINESS
A. GENERAL
The Company is a continuation of two Rhode Island corporations, Information
Systems, Inc. incorporated in 1971, and Dataman, Inc., incorporated in 1973,
which consolidated management and operations in 1982. Information Systems
provide primarily payroll processing, data entry, batch processing and
microfiche processing services to a broad base of businesses. Dataman, Inc.
focused on professional services and facilities management, becoming involved
with the health care field in 1979 when it began performing software consulting
and design work for the Rhode Island Group Health Association ("RIGHA"). In
March, 1986 the Company completed the process which it began in 1983 of
terminating its involvement with the non-healthcare related businesses in which
it and its predecessors had previously engaged, recognizing that the industry's
need for many of the Company's prior services was declining due to the increased
use of in-house computer systems which resulted in a reduction of companies
using outside services such as data entry and computer processing.
The business of the Company consists of manufacturing and marketing application
software products designed for use on Hewlett Packard computers by health
maintenance organizations ("HMOs") as well as furnishing HMOs related
professional services involving customer funded enhancements of the Company's
software products. Although the Company's software products have in the past
typically required some enhancement prior to customer use, the Company is
attempting and has begun to design software needing few or not enhancements
prior to use by customers.
There are several categories of HMOs, including one in which the HMO directly
employs physicians (the "staff model") and one in which the HMO contracts with
independent physicians or independent practice associations (the "IPA model").
Based on its analysis of a number of independently conducted studies, the
Company believes that these two models represent a majority of the HMO's
currently in operation.
The Company provides software to both staff and IPA model HMO's which assists
the HMO in tracking members, billing clients, processing claims and maintaining
doctors' appointment schedules.
B. PRODUCTS AND SERVICES
The Company did not have any revenue in 1996.
The Company's HMO software is modular in design. The package which the Company
offers typically includes a license of its software products and professional
services relating to installation and enhancement of the modules and, in a
majority of cases, includes the sale of Hewlett Packard equipment on an VAR
commission basis or as a software supplier in a Hewlett Packard-originated sale.
One or more of the modules can be licensed with or without the purchase of
Hewlett Packard equipment.
The Company's HMO software operates on hardware manufactured by Hewlett Packard.
The Company believes that because there are many suppliers that sell Hewlett
Packard equipment and the equipment does not modifications to run the Company's
software, customers of the Company should continue to be able to procure Hewlett
Packard equipment to run the Company's software. Under its VAR Agreement with
Hewlett Packard, the Company has a value added re-seller relationship with
Hewlett Packard which provides for discounts to the Company on Hewlett Packard
hardware, depending on dollar volume of sales, if the Company sells Hewlett
Packard hardware with its software to any of its customers. Additionally, if
Hewlett Packard makes a hardware sale through its own sales force based in part
on a customer's desire to use the Company's software, the Company will receive a
commission, which will be smaller than the discount it would have received had
it initiated the sale.
The HMO software modules currently marketed by the Company are described below.
Although the Company's customers have in the past typically required some
enhancement of the modules to meet their individual needs more exactly, the
modules are fully operational without further enhancements.
3
1. Membership/Marketing
This module contains on-line features to enter and maintain
member, subscriber, group and physician data. Substantial
inquiry capability is available for marketing purposes, such
as locating dependents reaching the age of eligibility for
individual membership. This is a "core" module highly
integrated with other applications.
2. Billing and Accounts Receivable
The Company's system performs premium billing for both group
and individual subscribers.
3. Claims Processing
In addition to processing claims, this module contains
extensive features which re available for utilization review
to enable the HMO to analyze hospital usage, emergency room
use and various external services in determining which
specialists should be brought in-house.
4. Patient Appointment Scheduling
This module provides on-line updates and inquiries, and
automatically generates physicians' schedules. Usage reports,
also generated by this module, summarize patient usage,
fee-for-service versus prepaid usage, workload and
productivity by physician and reception staff.
5. Pharmacy
This module interacts with the membership data base to provide
on-line verification of patient eligibility and to maintain a
medication profile for each patient. It automatically
generates prescription labels and receipts containing alert
messages associated with the drug being dispensed.
6. Referral Management
This module tracks referrals by physicians. Type of referrals
tracked include emergency room, home health, inpatient
admission, ambulatory surgery, scheduled and continuing care.
7. Utilization Reporting
This module draws data from claims and encounter files for
monitoring health care services provided to members and forms
one of the actuarial foundations for the rate setting process.
8. Capitation Reimbursement
This module allows IPA model HMO's to reimburse physicians on
a predetermined rate-per-month rather than on a
fee-for-service basis. Additionally, the Company has recently
enhanced its existing modules to enable a new variety of HMO,
the preferred provider organization or PPO, to use the
Company's system.
C. MARKETING AND CUSTOMERS
There is no active marketing at this time.
The Company had no written agreements for provision of products to any customers
during its fiscal year ended March 31, 1996 relative to the sale of any product
to any customer.
D. PRODUCT DEVELOPMENT
The Company did not have any product development.
E. PRODUCT PROTECTION
The Company relies on a combination of trade secret laws and license agreements
to protect its rights in its software. Although the Company's license agreements
prohibit disclosure of the proprietary aspects of its products, it is
technically possible to copy aspects of its products in violation of the
Company's rights.
4
The Company believes that, because of rapid technological change in the software
industry, patent, trade secret and copyright protection is less significant than
factors such as the knowledge, ability and experience of employees. Further, the
Company believes that the great difficulty and dime involved in any attempt to
recode mainframe computer software such as the Company's, which contains
hundreds of thousands of lines of code, would deter a potential plagiarizer.
F. BACKLOG
The Company does not currently have any orders for installation of HMO software
and does not anticipate having any backlog in the future.
G. COMPETITION
The market for the Company's software products is characterized by rapid
advancements in technology and by intense competition among a number of
manufacturers and distributors. New competitors can be expected to enter the
market as the market expands. No assurance can be given that the Company will
have the financial resources, marketing, distribution, service or support
capabilities, depth of key personnel or technological expertise to compete
successfully in the future.
The Company's HMO software operates only on hardware manufactured by Hewlett
Packard. Although the Company does not have any current information regarding
the percentage of the HMO market serviced by the various hardware manufacturers,
the Company believes that many HMO's are currently using Hewlett Packard
equipment. If conditions in the market change it may be necessary for the
Company to undertake to adapt its software to other computer manufacturer(s).
The Company's software continues to suffer from a lack of acceptability in that
it is not easibly convertible into compatible software needed on non-Hewlett
Packard equipment.
The principal considerations for users of HMO software and include product
reliability, compatibility with current owned hardware, price/performance
characteristics, integration of functions, availability and quality of support
and training services and ease of understanding and operating the software.
H. EMPLOYEES
As of March 31, 1996, the Company did not have any full-time employees. The
officers and directors of the Company continue to work on a part-time basis
without compensation.
ITEM 2: PROPERTIES
The Company's principal executive and administrative offices are located in a
portion of a building at 2 Charles Street, Providence, Rhode Island and
occupancy is without cost to the Company.
ITEM 3: LEGAL PROCEEDINGS
Not applicable.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
5
PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET PRICE OF COMMON STOCK
In March 1987, the Company made a public offering of 1,000,000 shares of common
stock at $2.50 per share. The Company's stock is traded in the over-the-counter
market with NASDAQ symbol ORBS. The table below sets forth the range of the high
and low bid quotations for the common stock for each quarterly period since the
offering.
HIGH BID LOW BID
-------- -------
03/12/87 - 03/31/87 2 5/8 2 1/4
04/01/87 - 06/30/87 2 7/8 2
07/01/87 - 09/30/87 3 2
10/01/87 - 12/31/87 2 1/8 3/4
01/01/88 - 03/31/88 1 3/4
04/01/88 - 06/30/88 1/4 1/4
07/01/88 - 09/30/88 11/16 3/8
10/01/88 - 12/31/88 3/8 3/16
01/01/89 - 03/31/89 1/4 1/4
04/01/89 - 06/30/89 1/4 1/4
07/01/89 - 09/30/89 7/16 1/4
10/01/89 - 12/31/89 7/16 3/8
01/01/90 - 03/31/90 3/8 5/16
04/01/90 - 06/30/90 5/16 5/32
07/01/90 - 09/30/90 5/32 1/8
10/01/90 - 12/31/90 1/8 1/32
01/01/91 - 03/31/91 1/16 1/16
04/01/91 - 06/30/91 1/16 1/16
07/01/91 - 09/30/91 1/16 1/32
10/01/91 - 12/31/91 1/16 1/32
01/01/92 - 03/31/92 5/32 1/16
04/01/92 - 06/30/92 5/32 1/16
07/01/92 - 09/30/92 5/32 1/16
10/01/92 - 12/31/92 5/32 1/16
01/01/93 - 03/31/93 5/32 1/16
04/01/93 - 06/30/93 5/32 1/16
07/01/93 - 09/30/93 5/32 1/16
10/01/93 - 12/31/93 5/32 1/16
01/01/94 - 03/31/94 5/32 1/16
04/01/94 - 06/30/94 5/32 1/16
07/01/94 - 09/30/94 5/32 1/16
10/01/94 - 12/31/94 5/32 1/16
01/01/95 - 03/31/95 5/32 1/16
04/01/95 - 06/30/95 9/32 3/32
07/01/95 - 09/30/95 9/32 3/32
10/01/95 - 12/31/95 9/32 3/32
01/01/96 - 03/31/96 9/32 3/32
The above quotations represent prices between dealers and do not include retail
markup, markdown or commission. They may not necessarily represent actual
transactions.
The closing bid price on March 31, 1996 was $.20. The Company has not paid any
dividends on its common stock. On March 31, 1996, there were approximately 175
record holders of common stock.
6
ITEM 6: SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Sales 0 0 $25,000 $0
Income(loss) ($38,934) ($33,333) ($101,320) (72,094) (573,881)
Income(loss) per common shares (.01) (.01) (.02) (.02) (.14)
Weighted average number of shares 9,450,000 6,318,782 6,318,782 5,913,782 5,913,782
Balance Sheet Data:
Current assets 403 196 1,259 26,259 1,206
Total assets 403 1,961 3,024 96,150 128,855
Current liabilities 0 235,629 197,359 205,844 166,455
Long-term obligations 0 95,000 101,000 87,500 87,500
Common shareholders' equity 403 (328,668) (295,335) (197,194) (125,100)
</TABLE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The Company did not have any revenue for the year ended March 31, 1996.
<TABLE>
<CAPTION>
Year Ended - March 31
1996 1995 1994
<S> <C> <C> <C>
Professional Services $0 $0 $0
Licenses, facilities management, packages and VAR Sales $0 $0 $0
Total Gross Sales $0 $0 $0
Less: Cost of Goods Sold $0 $0 $0
Net Sales $0 $0 $0
</TABLE>
The net loss from operations before taxes for the twelve months ended March 31,
1996, was $38,934 which compares with a corresponding loss for the twelve month
period ended March 1995 of $33,333. The net loss is attributed mainly to the
lack of revenues in the Company's primary market (HMO's) for its software
products.
The Company did not have any new sales during the year.
LIQUIDITY AND CAPITAL RESOURCES
The Company signed a letter of intent on October 2, 1995 with Triple I
Corporation whereby Orbis, Inc. will exchange up to 90% of the Company's common
stock for 100% of Triple I Corporation's common stock; conduct a reverse stock
split, and change its name to Industrial Imaging Corporation all subject to
stockholder approval. A Form 8-K was filed with the Securities and Exchange
Commission on October 12, 1995.
On October 25, 1995, the Company converted a Promissory note to Celestial
management in the amount of $175,000 as well as interest due on this note in the
amount of $94,050 into common stock of Orbis, Inc.
Celestial received in exchange for this note and interest, 1,350,000 shares of
Orbis common stock as well as 100,000 three year warrants to purchase additional
shares of Orbis common stock at $.0777.
The Company had acquired the assets and rights to a yogurt chain named Perkits
Yogurt in August 1991 from Celestial Management. No revenues were derived from
this investment and all stores have been closed and the Company has ceased to
exist.
7
On November 15, 1995 various creditors of the Company converted debt in the
amount of $98,956 in exchange for 1,781,218 shares of Orbis common stock.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See item 14(a) of this annual report of Form 10-K.
ITEM 9: DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES
The current directors, executive officers and persons nominated to become
directors of the company are as follows:
NAME AGE POSITION
- ---- --- --------
Pasquale Ruggieri 63 President, Chief Executive
Officer and Director
Arthur G. Jenkins 70 Secretary, Director
Henry E. Tow 48 Treasurer, Director
Pasquale Ruggieri, age 63, has served as President, Chief Executive Officer and
Director of the Company since August of 1990. He is currently with the
Investment Banking Division of Schneider Securities, Inc. He was Executive Vice
President and Director of Investment Banking for Jonathan Alan & Co., Inc. until
January of 1991. Mr. Ruggieri was in Corporate Finance and coordinator of
special situations of Providence Securities until January 1987. Mr. Ruggieri was
self-employed as a management consultant for the two years prior. He was an
investment broker at Tucker, Anthony, and R.L. Day from 1983 through 1985. Mr.
Ruggieri received his Bachelor of Science Degree in Business Administration from
Bryant College and has banking certificates from the American Institute of
Banking.
Arthur G. Jenkins, age 70, has been the Secretary and Director of the Company
since August of 1990. He is currently with the Investment Banking Division of
Schneider Securities, Inc. He was with Josephthal Lyon & Ross, Inc. until August
of 1994. He was with the Investment Banking Division of Schneider Securities,
Inc. until October, 1992. He was a Vice President, Investment Banking Division
of Jonathan Alan & Company, Inc. until January of 1991, and held a comparable
position with Providence Securities, Inc. during January 1988- November 1988;
during the period June 1986 - January 1988 he was a principal at A.G. Jenkins &
Associates, S. Orange, New Jersey, a consulting engineer firm and held the
position of Senior Vice President at Cornell Dublier Electronics Inc., Wayne,
New Jersey, where he associated from December 1960 - June 1986.
8
Henry E. Tow, age 48, has served as Treasurer and Director of the Company since
August 1990. He is currently with the investment firm of Coburn & Merideth. He
was with the Investment Banking Division of Schneider Securities, Inc. until
August of 1995. He was a vice president of Jonathan Alan & Company, Inc. with
whom he has been associated until January of 1991 and a registered
representative since September 1986 with other securities brokerage firms;
during the period September 1984 - September 1986 he attended RI College at
Providence, RI; he held the position of President at his restaurant business,
Jasmine Associates, Warwick, RI from June 1984 - July 1985, and the General
Manager of Tow Industries Inc., Pawtucket, RI during the period June 1976 -
December 1983.
Officers and directors are elected on an annual basis. The present term of
office for each director will expire at the next annual meeting of the Company's
stockholders or at such time as his successor is duly elected. Directors of the
Company are not presently receiving compensation for their services to the
Company but have been granted options under the 1987 stock option plan. Officers
serve at the discretion of the Board of Directors.
ITEM 11: EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid by the Company during
the fiscal year ended March 31, 1996 to each of its five most highly compensated
officers whose total cash compensation exceeds $60,000 and to all executive
officers as a group:
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR NUMBER IN GROUP CAPACITIES IN WHICH SERVED CASH COMPENSATION
<S> <C> <C>
Pasquale Ruggieri President $0
Chief Executive Officer
All Executive Officers as a Group (3 people) $0
</TABLE>
1987 STOCK OPTION PLAN
An aggregate of 400,000 shares of Common Stock is reserved for issuance under
the Company's 1987 Stock Option Plan (the "1987 Plan"), which was approved by
the Board of Directors as of December 17, 1987, amended on July 26, 1988 and
ratified by the stockholders of the Company on September 7, 1988. The terms of
the 1987 Plan are identical to those of the 1986 Plan, except that (i) the
employees need not agree in writing to remain in the employ of the Company for
one year after being granted an option to be eligible to exercise it but will
not be granted options until they have served for one year; (ii) directors of
the Company who have served as directors for period of at least one full year
(except for directors who are full-time employees of the Company) are eligible
to be granted options; and (iii) the Company does not have a repurchase option
in the event that the employee competes directly or indirectly with the Company
during the period of employment or for two years thereafter, as the 1986 Plan
does.
On December 1, 1988, the Company authorized the issuance of stock options under
the 1987 Plan to all qualified Directors of the Company who have served for at
least one year in the amount of 10,000 shares to each Director at 80 percent of
the market value of the Company's Common Stock as of December 1.
EMPLOYMENT AGREEMENT
None.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 31, 1996, regarding the
beneficial owners of 5% or more of the Company's outstanding Common Stock, the
only class of the Company's voting securities and the share ownership of all
directors and executive officers as a group. Unless otherwise indicated, each of
the following stockholders has sole voting and investment power with respect to
the shares beneficially owned:
9
<TABLE>
<CAPTION>
NAMES AND ADDRESS OF BENEFICIAL OWNER SHARES OF THE COMPANY'S COMMON STOCK
BENEFICIALLY OWNED
NUMBER PERCENT
------ -------
<S> <C> <C>
Thomas L. DePetrillo 2,329,286 24.6%
65 Peaked Rock Road
Narragansett, RI 02882
Celestial Management 1,350,000 14.3%
336 Atlantic Avenue
East Rockaway, NY 11518
Pasquale Ruggieri 1,087,886 11.5%
51 Country Lane
Cranston, RI 02920
All Current Directors and Officers 1,407,886 14.9%
as a Group (3 people)
</TABLE>
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14:
(A) 1. LIST OF FINANCIAL STATEMENTS
The following financial statements of Orbis, Inc. as required by Item 8
of Part II of this Annual Report of Form 10-K appear at pages F-1
through F-12 of this Annual Report on Form 10-K:
Independent Auditor's Report
Balance Sheets -- March 31, 1996 and March 31, 1995
Statements of Operations -- Years Ended March 31, 1996, 1995,
and 1994
Statements of Changes in Common Shareholders' Equity -- Years
Ended March 31, 1996, 1995, and 1994
Statements of Cash flows -- Years Ended March 31, 1996, 1995,
and 1994
Notes to Financial Statements-- March 31, 1996, 1995, and 1994
2. FINANCIAL STATEMENT SCHEDULE
The following auditors' opinion and financial statement schedules of
Orbis, Inc. appear at Pages S-1 through S-6 of this Annual Report on
Form 10-K:
Schedule II Accounts Receivable from Related
Parties and Underwriters, Promoters
and Employees Other Than Related
Parties
Schedule V Property, Plant and Equipment
10
Schedule VI Accumulated Depreciation, Depletion
and Amortization of Property, Plant
and Equipment
Schedule VIII Valuation and Qualifying Accounts
Schedule IX Short-Term Borrowings
Schedule X Supplementary Income Statement
Information
3. EXHIBITS
The exhibit numbers in the following list correspond to the numbers assigned to
such exhibits in the Exhibit Table of Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
*3.1 Restated Articles of Incorporation of the Company.
*3.2 By-Laws of the Company, as amended.
*3.3 Underwriter's Warrant.
*3.4 Articles of Amendment to the Articles of Incorporation of the Company.
*4.1 Specimen certificate for shares of Common Stock of the Company.
**10.1 1987 Stock Option Plan.
**10.2 Investment Agreement between the company and Rhode Island Group Health Association, Inc.
("RIGHA") dated December 31, 1985.
*10.3 Agreement between Tufts Associated Health Plan and the Company dated July 1, 1986.
*10.4 Form of Software License Agreement.
*10.5 Asset Purchase Agreement between the Company and Automated Business Centers, Inc. dated as
of March 29, 1985.
*10.6 Amended HMO Software Agreement between RIGHA and the Company dated December 31, 1985.
**10.7 Amendment dated May 19, 1987 to Facilities Maintenance Agreement between the Company and
RIGHA dated October 10, 1986.
**10.8 Cancellation dated May 19, 1987 of Agreement for computer Processing Services dated September 4, 1985.
*10.9 Subscription Agreement between Tufts Associated Health Plan and the Company dated as of July 1, 1986.
*10.10 OEM Agreement between the Company and Hewlett Packard dated August 19, 1986.
*10.11 Lease Agreement for 20 Catamore Boulevard offices between the Company and Novius IV
Limited Partnership dated December 30, 1985.
*10.12 Promissory Note, Revolving Credit and Standby Letter of Credit Agreement between the
Company and Old Stone Bank dated August 29, 1985.
</TABLE>
11
<TABLE>
<S> <C>
*10.13 Nine percent debenture of the Company payable to DeBlois Oil Company dated January 27, 1986.
*10.14 Employment Agreement between the Company and Clinton L. Wright dated July 1, 1982.
*10.15 Orbis, Inc. Thrift 401(k) Plan and Trust.
***10.16 Agreement between All Care, Inc. and the Company dated August 19, 1986.
*****10.17 Joint Venture Agreement between Network Solutions, Inc. and the Company dated May 7, 1988.
****10.18 Agreement between Record Management Systems, Inc. and Orbis Medical, Inc. dated April 30, 1988.
****10.19 Agreement and Plan of Merger among Systems & Solutions, Inc., Orbis Medical, Inc. and the
Company dated April 30, 1988.
******10.20 Agreement between Rhode Island Group Health Association and the Company dated June 16, 1988.
******10.21 Settlement between Orbis Medical Inc. and Mark Towner, Douglas Barry and Alan Rowberry
(division known as Record Management Systems (RMS)) dated October 13, 1988.
******10.22 Stock Purchase and Call Option Agreement between the Company and Network Solutions Inc. dated March 13, 1989.
******10.23 1986 Stock Option Plan.
******11.2 Statement regarding Computation of Earnings Per Share.
*****13.1 1988 Annual Report to Shareholders.
****22.1 Subsidiaries of the Registrant.
</TABLE>
*Incorporated herein by reference from the exhibits to the Company's Form S-18
Registration Statement No. 33-8184B filed with the Securities and Exchange
Commission.
**Incorporated herein by reference from the exhibits to the Company's Form 10-K
Annual Report for fiscal year ending 3/31/87 No. 0-15520 filed with the
Securities and Exchange Commission.
***Incorporated herein by reference from the Company's Form 8 to the Form 10-K
Annual Report for fiscal year ending 3/31/87 No. 0-15520 filed with the
Securities Exchange Commission.
****Incorporated herein by reference from the exhibits to the Company's Form
10-K Annual Report for fiscal year ending 3/31/88 No. 0-15520 filed with the
Securities and Exchange Commission.
*****Incorporated herein by reference from the company's Form 8 to the Form 10-K
Annual Report for fiscal year ending 3/31/88 No. 0-15520 filed with the
Securities Exchange Commission.
******Incorporated ;herein by reference from the Company's form 8 to the Form
10-K Annual Report for fiscal year ending 3/31/89 No. 0-15520 filed with the
Securities and Exchange Commission.
(B) REPORTS 8-K
A Form 8-K was filed on October 4, 1991
12
A Form 8-K was filed on May 7, 1992
A Form 8-K was filed on October 21, 1993
An amended Form 8-K was filed on January 21, 1994
A Form 8-K was filed on October 12, 1995
13
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
ORBIS, INC.
Date: June 17, 1996 By: /s/ Pasquale Ruggieri
--------------------------
Pasquale Ruggieri, Chief Executive
Officer, President, Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: June 17, 1996 /s/ Pasquale Ruggieri
----------------------
Pasquale Ruggieri, Chief Executive
Officer, President, Director
Date: June 17, 1996 /s/ Arthur G. Jenkins
---------------------
Arthur G. Jenkins, Secretary,
Director
Date: June 17, 1996 /s/ Henry E. Tow
----------------
Henry E. Tow, Treasurer, Director
14
List of Financial Statements
F1--F12
ORBIS, INC. AND SUBSIDIARY
==========================
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED
MARCH 31, 1996 AND 1995
WITH
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS' REPORT
F1
CAYER PRESCOTT
CLUNE CHATELLIER
CERTIFIED PUBLIC ACCOUNTANTS
PROVIDENCE, RHODE ISLAND
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT
To the Shareholders of
Orbis, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of Orbis,
Inc. and Subsidiary as of March 31, 1996 and 1995, and the related consolidated
statements of operations and changes in shareholders' equity and cash flows for
the years ended March 31, 1996, 1995, and 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Orbis, Inc.
and Subsidiary at March 31, 1996 and 1995, and the results of its operations and
its cash flows for the years ended March 31, 1996, 1995 and 1994 in conformity
with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
10 to the consolidated financial statements, the Company has experienced
substantial operating losses in recent years. The Company's financial position
and operating results raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 10. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ CAYER PRESCOTT CLUNE & CHATELLIER
May 31, 1996
F2
ORBIS, INC. AND SUBSIDIARY
==========================
BALANCE SHEETS
MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
======
1996 1995
---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.............................................................$ 303 $ 96
Accounts receivable:
Trade (net of allowance for doubtful accounts: $126,466 in 1996 and 1995)..........
Prepaid expenses...................................................................... 100 100
-------------------------------------
TOTAL CURRENT ASSETS.............................................................. 403 196
-------------------------------------
EQUIPMENT, FIXTURES AND SOFTWARE, AT COST............................................... 585,031 585,031
Less: accumulated depreciation and amortization...................................... (585,031) (585,031)
-------------------------------------
NET EQUIPMENT, FIXTURES AND SOFTWARE.............................................. 0 0
-------------------------------------
OTHER ASSETS:
Deposits.............................................................................. 1,765
-------------------------------------
TOTAL OTHER ASSETS................................................................ 0 1,765
-------------------------------------
TOTAL ASSETS....................................................................$ 403 $ 1,961
=====================================
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
========================================
CURRENT LIABILITIES:
Current portion of long-term debt..................................................... $ 96,500
Accounts payable...................................................................... 8,535
Accrued expenses:
Professional fees................................................................... 500
Due to related parties.............................................................. 36,044
Interest to related party........................................................... 94,050
-------------------------------------
TOTAL CURRENT LIABILITIES.........................................................$ 0 235,629
-------------------------------------
LONG-TERM DEBT, NET OF CURRENT PORTION.................................................. 0 95,000
-------------------------------------
STOCKHOLDERS' DEFICIENCY:
Common stock - $.01 par value; 10,000,000 shares authorized; 9,450,000 shares
issued (6,318,782 in 1995).......................................................... 94,500 63,188
Paid-in capital....................................................................... 3,245,134 2,908,441
Accumulated deficit................................................................... (3,284,939) (3,246,005)
--------------------------------------
Total............................................................................. 54,695 (274,376)
Less: 80,468 shares of treasury stock, at cost....................................... (54,292) (54,292)
--------------------------------------
TOTAL SHAREHOLDERS' DEFICIENCY.................................................... 403 (328,668)
--------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY..................................$ 403 $ 1,961
=====================================
SEE NOTES TO FINANCIAL STATEMENTS.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F3
ORBIS, INC. AND SUBSIDIARY
==========================
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
OPERATING EXPENSES................................................... $37,076 $ 6,633 $ 93,839
---------------------------------------------------
LOSS FROM OPERATIONS................................................. (37,076) (6,633) (93,839)
----------------------------------------------------
OTHER INCOME (EXPENSE):
Professional fees..................................................
Interest expense................................................... (26,700) (26,250)
Accounts payable settlements....................................... 18,319
Miscellaneous income (loss)........................................ (1,858) 450
-----------------------------------------------------
OTHER INCOME (EXPENSE), NET...................................... (1,858) (26,700) (7,481)
-----------------------------------------------------
NET LOSS............................................................. $(38,934) $(33,333) $(101,320)
====================================================
LOSS PER SHARE....................................................... $ (.01) $ (.01) $ (.01)
SEE NOTES TO FINANCIAL STATEMENTS.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F4
ORBIS, INC. AND SUBSIDIARY
==========================
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Preferred Stock Common Stock Paid-in Retained
Shares Amount Shares Amount Capital Earnings
------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1993............. 400,000 $ 400,000 5,913,782 $59,138 $2,509,312 $(3,111,352)
Conversion of preferred stock....... (400,000) (400,000) 400,000 4,000 396,000
Issuance of common stock............ 5,000 50 3,129
Net loss for the year............... (101,320)
------------------------------------------------------------------------------------------------
BALANCE, MARCH 31, 1994............. 0 0 6,318,782 63,188 2,908,441 (3,212,672)
Net loss for the year............... (33,333)
------------------------------------------------------------------------------------------------
BALANCE, MARCH 31, 1995............. 0 0 6,318,782 63,188 2,908,441 (3,246,005)
Conversion of debt to equity........ 3,131,218 31,312 336,693
Net loss for the year............... (38,934)
------------------------------------------------------------------------------------------------
BALANCE, MARCH 31, 1996............. 0 $ 0 9,450,000 $94,500 $3,245,134 $(3,284,939)
================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Treasury Stock
Shares Amount Total
------ ------ -----
<S> <C> <C> <C>
BALANCE, MARCH 31, 1993............. 80,468 $54,292 $(197,194)
Conversion of preferred stock.......
Issuance of common stock............ 3,179
Net loss for the year............... (101,320)
------------------------------------------------
BALANCE, MARCH 31, 1994............. 80,468 54,292 (295,335)
Net loss for the year............... (33,333)
------------------------------------------------
BALANCE, MARCH 31, 1995............. 80,468 54,292 (328,668)
Conversion of debt to equity........ 368,005
Net loss for the year............... (38,934)
------------------------------------------------
BALANCE, MARCH 31, 1996.............
80,468 $54,292 $ 403
================================================
SEE NOTES TO FINANCIAL STATEMENTS.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F5
ORBIS, INC. AND SUBSIDIARY
==========================
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
CASH PROVIDED BY:
Operating activities:
Net loss......................................................... $(38,934) $(33,333) $(101,320)
Items in net loss not affecting cash:
Depreciation and amortization.................................. 68,126
Write off of deposits.......................................... 1,765
Increase (decrease) in cash from changes in assets and liabilities:
Accounts receivable.......................................... 25,000
Prepaid expenses and deposits................................ 990
Accounts payable............................................. 6,774
Accrued expenses............................................. 37,376 33,770 6,270
-------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES.................. 207 1,427 4,850
-------------------------------------------------------
CASH USED FOR FINANCING ACTIVITIES:
Repayment of long-term debt...................................... (1,500) (4,850)
--------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES..................... (1,500) (4,850)
--------------------------------------------------------
NET INCREASE (DECREASE) IN CASH...................................... 207 (73) 0
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ........................ 96 169 169
------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR............................... $ 303 $ 96 $ 169
=====================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest......................................................... $ 0 $ 0 $ 0
=======================================================
SEE NOTES TO FINANCIAL STATEMENTS.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F6
ORBIS INC. AND SUBSIDIARY
=========================
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
On April 1, 1989 Orbis Acquisition, Inc. (a wholly-owned
subsidiary) acquired all of the outstanding common stock of Systems and
Solutions, Inc. and changed its name to Orbis Medical, Inc. All
material intercompany transactions and balances have been eliminated in
consolidation and are recorded using the purchase method of accounting.
NATURE OF BUSINESS
The Company manufactures and markets application software
products designed for use on Hewlett Packard computers by health
maintenance organizations (HMOs) and furnishes related professional
services to HMOs on customer-funded enhancements of the Company's
software products.
The Company has suspended active business at the present time
until anticipated corporate restructuring occurs.
REVENUE RECOGNITION POLICY
Revenue is recognized as services are performed and
installations are completed.
COMPUTER SOFTWARE DEVELOPMENT COSTS
Pursuant to the Financial Accounting Standards Board Statement
No. 86, the Company capitalizes the cost of computer software to be
sold, leased or otherwise marketed.
Expenses incurred to establish the technological feasibility
of a product are expensed. Subsequent development costs are
capitalized. The amounts amortized for the years ended March 31, 1996,
1995, and 1994 were $0, $0 and $68,079, respectively.
PUBLIC STOCK OFFERING COSTS
Public stock offering costs have been netted against the
proceeds from the offering.
CASH EQUIVALENTS
The Company considers all highly liquid debt instruments, with
maturities of three months or less, to be cash equivalents.
EQUIPMENT, FIXTURES AND SOFTWARE
Equipment, fixtures and software are recorded at cost.
Depreciation and amortization are computed on the straight-line method
over the assets' useful lives for financial reporting purposes.
(CONTINUED)
- --------------------------------------------------------------------------------
F7
ORBIS INC. AND SUBSIDIARY
=========================
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ORGANIZATION COSTS
Organization costs are amortized on a straight-line basis over
a sixty month period. These costs are fully amortized as of March 31,
1994.
OTHER MATTERS
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
2. EQUIPMENT, FIXTURES AND SOFTWARE
At March 31, 1996 and 1995, equipment, fixtures and software
consist of the following:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Computer equipment.................................................... $ 61,579 $ 61,579
Purchased software programs........................................... 60,511 60,511
Developed software programs........................................... 446,874 446,874
Office furniture and equipment........................................ 16,067 16,067
---------------------------------
Total............................................................... 585,031 585,031
Less: accumulated depreciation and amortization...................... (585,031) (585,031)
---------------------------------
NET EQUIPMENT, FIXTURES AND SOFTWARE................................ $ 0 $ 0
=================================
</TABLE>
3. LONG-TERM DEBT
Long-term debt at March 31, 1996 and 1995, is as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Settlement agreement with a financial institution totaling $18,000 in
accordance with the following payment schedule: (1) $500 on or before
June 30, 1994; and (2) thirty five monthly payments of $500, due and
payable on the first day of each month, beginning August 1, 1994, with
the final monthly payment due on or before June 1, 1997. In the event
that the Company defaults on a payment, the financial institution shall
be entitled to the full amount of the settlement including all costs
incurred and all post-judgement interest accrued. During fiscal year
ended March 31, 1996, this debt was assumed by certain shareholders in
exchange for stock................................................................... $0 $16,500
.
</TABLE>
(CONTINUED)
- --------------------------------------------------------------------------------
F8
ORBIS INC. AND SUBSIDIARY
=========================
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
3. LONG-TERM DEBT (CONTINUED)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Note payable to Celestial Management, Ltd. The principal sum is due in
installments as follows: (1) $87,500 on September 30, 1991 or upon the
closing date of a private offering of any securities of the Company,
whichever is earlier; and (2) $87,500 or the entire principal balance
then due on July 31, 1998 or the closing date for the public offering
of any securities of the Company whichever is earlier. The Company
agrees to pay interest on the unpaid principal balance from the issue
date until payment in full, monthly, at a rate of 15 percent per annum:
currently in default. During fiscal year ended March 31, 1996, this
note was converted to common stock of the Company..................................... 0 175,000
----------------------------
Total long-term debt....................................................... 191,500
Less: current portion....................................................... 0 96,500
----------------------------
NET LONG-TERM DEBT......................................................... $0 $ 95,000
============================
</TABLE>
Cash paid for interest during the years ended March 31, 1996,
1995 and 1994 was $0, $0, and $0, respectively.
4. INCOME TAXES
The Company has adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. Under this method,
deferred income tax assets and liabilities are calculated based on
their estimated effect on future cash flows. The new method generally
differs from the former method because sources of taxable income other
than reversals of existing taxable temporary differences are considered
in the deferred tax calculations.
The net current and noncurrent deferred tax asset as presented
in the accompanying balance sheet consists of the following:
Deferred tax asset................................ $934,600
Valuation allowance............................... (934,600)
---------
$ 0
=========
The valuation allowance at March 31, 1995 was $921,400
representing a net increase of approximately $13,200.
The deferred tax asset balance is the result of net operating
loss carryforwards.
A valuation allowance has been recorded for the deferred tax
assets as it is more likely than not that the deferred tax asset will
not be realized.
The Company has available research activities credits,
investment tax credits and jobs tax credit carryforwards totaling
approximately $167,000 expiring at various dates through 2005, and a
net operating loss carryforward of approximately $2,700,000 expiring at
various dates through 2005.
(CONTINUED)
- --------------------------------------------------------------------------------
F9
ORBIS INC. AND SUBSIDIARY
=========================
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
5. RELATED PARTY TRANSACTIONS
In June of 1990, Jonathan Alan Group, Inc., a related party,
assumed $229,009 in debt owed to a former shareholder. Jonathan Alan
Group, Inc. agreed to convert $129,009 of this assumed obligation into
1,822,714 shares of common stock. The remaining $100,000 was recorded
as a note payable, however as of March 31, 1991, no formal note has
been executed. In September 1991, the note was converted into 100,000
shares of one dollar par value preferred stock convertible into common
stock of the Company as explained in Note 10. On June 16, 1993, the
Board of Directors authorized the Company to convert the preferred
stock into 100,000 shares of the Company's common stock.
On August 22, 1991, the Company acquired all assets and rights
to a yogurt chain from Celestial Management, Ltd. The yogurt chain was
acquired by the Company through the issuance of two secured promissory
notes for $300,000 and $175,000 to Celestial Management, Ltd. In
September of 1991, the $300,000 promissory note was paid by the
issuance of 300,000 shares of one dollar par value preferred stock
convertible into common stock of the Company as explained in Note 10.
On September 30, 1991, a principal payment of $87,500 was due on the
$175,000 promissory note. As of March 31, 1992, no payment has been
made and the note is considered to be in default. On June 16, 1993, the
Board of Directors authorized the Company to convert the preferred
stock into 300,000 shares of the Company's common stock. On November
15, 1995, this $175,000 note plus $94,050 of accrued interest was
converted into 1,350,000 shares of common stock and 100,000 warrants.
The Company has received advances from a partnership, in which
the partners are also Directors or shareholders of the Company. The
amounts due to the partnership are payable upon demand. Interest is
payable at the applicable federal rate. The amounts due to the
partnership for the years ended March 31, 1996 and 1995, is $0 and
$36,044, respectively. During fiscal year ended March 31, 1996, these
advances were converted to common stock of the Company.
6. COMMON STOCK TRANSACTIONS
On June 16, 1993, the Company converted 400,000 shares of
preferred stock into 400,000 shares of common stock. Also on this date,
the Company issued 5,000 shares of common stock as part of payment in
full of their outstanding balance with a creditor.
On November 16, 1995, the Company converted all of its debt
into equity and issued 3,131,218 shares of common stock. Of this debt,
$82,456 was due to related parties, $191,500 plus accrued interest of
$94,050 was due to third parties for a grand total of $368,006.
The Company also issued 100,000 three year warrants to
purchase additional shares of common stock at $.0777 to a third party
in the conversion. (Upon execution of the reverse stock split discussed
in Note 12, the purchase price will increase to $1.40.)
7. PREFERRED STOCK TRANSACTIONS
The Company converted the $300,000 note payable to Celestial
Management, Inc. as well as a prior $100,000 debenture payable to
Jonathan Alan into preferred stock of the Company. See Note 5.
On June 16, 1993, the Board of Directors authorized the
Company to convert the 400,000 shares of preferred stock into 400,000
shares of common stock.
(CONTINUED)
- --------------------------------------------------------------------------------
F10
ORBIS INC. AND SUBSIDIARY
=========================
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
8. STOCK OPTIONS
An aggregate of 400,000 shares of common stock is reserved for
issuance under the Company's 1987 Stock Option Plan (the "1987 Plan"),
which was approved by the Board of Directors as of December 17, 1987,
amended on July 26, 1988 and ratified by the stockholders of the
Company on September 7, 1988. The terms of the 1987 Plan are identical
to those of the 1986 Plan, except that (i) the employees need not agree
in writing to remain in the employ of the Company for one year after
being granted an option to be eligible to exercise it but will not be
granted options until they have served for one year; (ii) directors of
the Company who have served as directors for a period of at least one
full year (except for directors who are full-time employees of the
Company) are eligible to be granted options; and (iii) the Company does
not have a repurchase option in the event that the employee competes
directly or indirectly with the Company during the period of employment
or for two years thereafter, as the 1986 Plan does.
On December 1, 1988, the Company authorized the issuance of
stock options under the 1987 Plan to all qualified Directors of the
Company who have served for at least one year in the amount of 10,000
shares to each Director at 80 percent of the market value of the
Company's common stock as of December 1.
9. EARNINGS PER SHARE
Earnings per share amounts are computed based on the weighted
average number of shares outstanding plus the shares that would be
outstanding assuming the exercise of dilutive stock options, which are
considered to be common stock equivalents. The number of shares used in
the computations was 9,450,000 in 1996 and 6,318,782 in 1995.
10. CONTINUING OPERATIONS
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplates continuation of the Company as a going concern. However,
the Company has sustained substantial operating losses in recent years
due to the depressed conditions of health maintenance organizations.
The Company has used substantially all of its working capital to
maintain the corporate existence.
In view of these matters, realization of a major portion of
the assets in the accompanying balance sheet is dependent upon
continued operations of the Company, which in turn is dependent upon
the Company's ability to meet its financing requirements, and
resumption of operations.
In an effort to maintain the value of its HMO software
products, the Company is attempting to negotiate license agreements
which, if successful, could provide the Company with future royalties.
As discussed in Note 5, a related party, is currently
providing necessary operating cash flow through cash infusions.
The related party's current intent is to seek a sale or merger
of the Company, as discussed in Note 12.
(CONTINUED)
- --------------------------------------------------------------------------------
F11
ORBIS INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- --------------------------------------------------------------------------------
11. ACCOUNTS PAYABLE SETTLEMENTS
In exchange for partial payments, certain vendors have
forgiven remaining amounts owed to them for services and products
acquired by the Company in previous years.
12. SUBSEQUENT EVENTS
The Company has entered into a letter of intent with Triple I
Corporation (a manufacturer of optical imaging machinery) whereby
Orbis, Inc. will exchange up to 90% of common stock for 100% of Triple
I Corporation's common stock; conduct a reverse stock split, and change
its name to Industrial Imaging Corporation.
(CONCLUDED)
- --------------------------------------------------------------------------------
F12
Financial Statement Schedule
S1 - S6
<TABLE>
<CAPTION>
SCHEDULE II
ORBIS, INC. AND SUBSIDIARY
==========================
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES.
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Balance at Deductions Balance at end of Period
---------- ------------------------
Beginning (1) (2) (1) (2)
Name of Debtor of Period Additions Amounts Collected Amounts Written Off Current Net Current
-------------- --------- --------- ----------------- ------------------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Year ended March 31, 1996 $- 0 - $- 0 -
Year ended March 31, 1995 $- 0 - $- 0 -
Year ended March 31, 1994 $- 0 - $- 0 -
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S1
<TABLE>
<CAPTION>
SCHEDULE V
ORBIS, INC. AND SUBSIDIARY
==========================
PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Balance at
Beginning Additions Other Changes Add Balance at
Classification of Period at cost Retirements (Deduct) Describe End of Period
-------------- --------- ------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Computer equipment............. $ 61,579 $ 61,579
Purchased software programs.... 60,511 60,511
Developed software programs.... 446,874 446,874
Leasehold improvements......... 16,067 16,067
YEAR ENDED MARCH 31, 1995:
Computer equipment............. $ 61,579 $ 61,579
Purchased software programs.... 60,511 60,511
Developed software programs.... 446,874 446,874
Office furniture and equipment. 16,067 16,067
YEAR ENDED MARCH 31, 1994:
Computer equipment............. $ 61,579 $ 61,579
Purchased software programs.... 60,511 60,511
Developed software programs.... 446,874 446,874
Office furniture and equipment. 16,067 16,067
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S2
<TABLE>
<CAPTION>
SCHEDULE VI
ORBIS, INC. AND SUBSIDIARY
==========================
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
-------- -------- -------- -------- -------- --------
Balance at
Beginning Additions Other Changes Add Balance at
Classification of Period at cost Retirements (Deduct) Describe End of Period
-------------- --------- ------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED MARCH 31, 1996:
Computer equipment................... $ 61,579 $ 61,579
Purchased software programs.......... 60,511 60,511
Developed software programs.......... 446,874 446,874
Leasehold improvements............... 16,067 16,067
YEAR ENDED MARCH 31, 1995:
Computer equipment................... $ 61,579 $ 61,579
Purchased software programs.......... 60,511 60,511
Developed software programs.......... 446,874 446,874
Office furniture and equipment....... 16,067 16,067
YEAR ENDED MARCH 31, 1994:
Computer equipment................... $ 61,579 $ 61,579
Purchased software programs.......... 60,511 60,511
Developed software programs.......... 378,795 $68,079 446,874
Office furniture and equipment....... 16,067 16,067
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S3
<TABLE>
<CAPTION>
SCHEDULE VIII
ORBIS, INC. AND SUBSIDIARY
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at
Beginning Charged to Costs Charged to Other Deductions - Balance at end
Decription of Period and Expenses Accounts - Describe Describe of the period
---------- --------- ------------ ------------------- -------- -------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED MARCH 31, 1996
Deducted from asset accounts:
Allowance for doubtful accounts......... $126,466 $126,466
YEAR ENDED MARCH 31, 1995:
Deducted from asset accounts:
Allowance for doubtful accounts......... $126,466 $126,466
YEAR ENDED MARCH 31, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts......... $126,466 $126,466
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
S4
<TABLE>
<CAPTION>
SCHEDULE IX
ORBIS, INC. AND SUBSIDIARY
==========================
SHORT TERM BORROWINGS
- ------------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
- ---------- -------- -------- -------- -------- --------
Weighted
Maximum Average average
Category of Weighted amount amount interest
aggregate Balance average outstanding outstanding rate
short-term at end interest during during during
borrowings of period rate the period the period the period
<S> <C> <C> <C> <C> <C>
Notes payable to banks
(bank borrowings):
FYE 3/31/96 $ 0 N/A N/A N/A N/A
FYE 3/31/95 $ 0 N/A N/A N/A N/A
FYE 3/31/94 $ 0 N/A N/A N/A N/A
The average amount outstanding during the period represents the average
daily principal balances outstanding during the period.
The weighted average interest rate during the period was computed by
dividing the actual interest incurred on short-term borrowings by the average
short-term borrowings.
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S5
EXHIBIT 11.2
ORBIS, INC. AND SUBSIDIARY
==========================
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
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Year Ended March 31
-------------------
1996 1995 1994
---- ---- ----
Primary:
Weighted average shares outstanding............................ 7,494,061 6,238,314 6,237,287
Net loss......................................................... $ (38,934) $ (33,333) $ (101,320)
-------------------------------------------------------
Loss per share................................................... $ (.01) $ (.01) $ (.02)
========================================================
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</TABLE>
S6
