<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(For the Quarter ended June 30, 1996)
Commission File Number 033-19522-NY
Genisys Reservation Systems, Inc. And Subsidiary
(formerly Robotic Lasers, Inc.)
(Exact Name of registrant as specified in its charter)
New Jersey 22-2719541
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification no.)
2401 Morris Avenue, New Jersey 07083
(Address of principal executive offices) (Zip Code)
(908) 810-8767
Issuer's Telephone Number including Area Code
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the past 12 months (or for such shorter
periods 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d)
of the Exchange Act after the distribution of securities under a
plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest
practicable date: As of June 30, 1996: 2,834,866 shares of Common Stock
(as adjusted for stock split)
Transitional Small Business Disclosure Format (check one)
Yes X No
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
( A development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
DURING THE DEVELOPMENT STAGE
(unaudited)
Six Months Six Months
Ended Ended
June 30, 1996 June 30, 1995
------------- -------------
REVENUES AND EXPENSES DURING
THE DEVELOPMENT STAGE
Revenue $ -- $ --
--------------- ---------------
Expenses -
General and Administrative 422,428 128,311
Depreciation and Amortization 41,669 381
Interest Expense 48,493 6,110
----------- -------------
512,590 134,802
---------- -----------
NET (LOSS) INCURRED DURING
THE DEVELOPMENT STAGE ($512,590) ($ 134,802)
========== ===========
NET (LOSS) INCURRED
PER COMMON SHARE ($ .18 ) ($ .05 )
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 2,825,455 2,534,772
=========== =============
From Inception
Three Months Three Months March 7, 1994
Ended Ended Through
June 30, 1996 June 30, 1995 June 30, 1996
REVENUES AND
EXPENSES DURING
THE DEVELOPMENT
STAGE
Revenue $ -- $ -- $ --
Expenses -
General and
Administrative 243,569 64,155 960,919
Depreciation and
Amortization 23,007 191 59,476
Interest Expense 26,345 3,055 85,015
------------ ----------------- ------------
292,921 67,401 1,105,410
----------- ---------------- ----------
NET (LOSS)
INCURRED DURING
THE DEVELOPMENT
STAGE ($292,921) ($ 67,401) (1,105,410)
========== ================ ===========
NET (LOSS)
INCURRED
PER COMMON SHARE ($ .10 ) ($ .03 ) ($ .42 )
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 2,834,850 2,534,772 2,636,254
========== ================= ===========
See Accompanying Notes to Financial Statements
3
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
A Development Stage Enterprise
CONSOLIDATED BALANCE SHEETS
June December
30, 1996 31, 1995
-------- --------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 396,928 $ 22,613
Prepaid Expenses 523 703
------------ --------------
Total Current Assets 397,451 23,316
EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION OF $58,942
and $17,393 419,663 302,381
OTHER ASSETS
Deposits and Other 28,847 26,988
----------- ------------
$ 845,961 $ 352,685
--------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
LIABILITIES:
Notes Payable - private investors $ 750,000 $ 650,000
Accounts Payable and accrued
expenses 231,739 98,012
Current portion of obligation under
computer equipment lease 65,367 45,012
Accrued interest payable - private
investors 63,973 28,096
Accrued consulting fees - officer 40,500 ---
Loans and advances from related
parties 51,023 19,126
Payroll taxes payable --- 10,000
--------------- -----------
Total current liabilities 1,202,602 850,246
Long-term portion of obligation under
computer equipment lease 78,256 89,746
Loans payable 563,500 ---
Convertible notes payable 30,000 ---
----------- ----------
1,874,358 939,992
--------- ----------
STOCKHOLDERS' EQUITY (DEFICIENCY):
Preferred Stock, $.0001 Par Value:
25,000,000 shares Authorized;
None Outstanding Common Stock,
$.0001 Par Value; 75,000,000
Shares Authorized; 2,834,866 and
2,804,866 Shares Issued and
Outstanding 283 280
Paid in Capital 76,730 5,233
Deficit Accumulated During
the Developmental Stage (1,105,410) ( 592,820)
----------- ---------
(1,028,397) ( 587,307)
---------- ---------
$ 845,961 $ 362,685
========== =========
See Accompanying Notes to Financial Statements
2
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Deficit
Accumulated
Additional During The
Common Stock Paid-In Development
Total Shares Value Capital Stage
BALANCE - DECEMBER
31, 1995 ($587,307) 2,804,866 $280 $ 5,233 ($592,820)
PROCEEDS FROM ISSUANCE
OF COMMON STOCK 60,000 30,000 3 59,997
PROCEEDS FROM ISSUANCE
OF WARRANTS 11,500 11,500
NET (LOSS) FOR THE
SIX MONTHS ENDED
JUNE 30, 1996 ( 512,590) -- -- -- ( 512,590)
-------- ---------------- -------- --------------
BALANCE - JUNE
30, 1996 ($1,028,397) 2,834,866 $283 $ 76,730 ($1,105,410)
=========== ========= ---- --------
See Accompanying Notes to Financial Statements
4
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
From Inception
March 7, 1994
Six Months Ended Six Months Ended Through
June 30, June June 30,
1996 1995 1996
CASH FLOWS FROM
OPERATING ACTIVITIES
Net (Loss) ( $512,590) ( $134,802) ($1,105,410)
Adjustment to Reconcile
Net (Loss) to Cash
Flows from Operating
Activities:
Depreciation and
Amortization 41,669 381 59,476
Common Stock issued
for services rendered -- 9,600 19,600
Changes in operating
assets and liabilities:
Other Assets (1,979) ( 243,255) (29,381)
Accounts Payable and
Accrued Expenses 164,227 21,085 258,152
Prepaid Expenses 180 ( 1,867) ( 523)
Accrued Interest Payable 35,877 -- 63,973
---------- --------------------------------
NET CASH FLOWS FROM
OPERATING ACTIVITIES ( 272,616) ( 348,858) ( 734,113)
------------- -------------- --------------
CASH FLOWS FROM
INVESTING ACTIVITIES
Acquisition of
Equipment ( 158,831) -- ( 478,605)
-------------- -------------------- -------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from Issuance
of Notes Payable 100,000 360,000 750,000
Payments under Computer
Equipment Lease (16,252) -- ( 25,976)
Proceeds from sale and
lease-back 25,117 -- 169,599
Proceeds from Issuance
of Common Stock 60,000 -- 60,000
Advances from related
parties 31,897 -- 51,023
Proceeds from issuance
of Notes Payable
and Related Warrants 575,000 -- 575,000
Proceeds from issuance
of Convertible Notes
Payable 30,000 -- 30,000
-------------- -----------------------------
NET CASH FLOWS FROM
FINANCING ACTIVITIES 805,762 360,000 1,609,646
------------- --------------- -----------
NET INCREASE IN CASH 374,315 11,142 396,928
CASH - BEGINNING OF
PERIOD 22,613 5 --
------------- ------------------------------
CASH - END OF PERIOD $ 396,928 $11,147 $ 396,928
============= ============== ===========
SUPPLEMENTAL CASH FLOW
INFORMATION
Interest paid $ 13,084 $ -- $ 21,510
============ =============================
Net liabilities assumed
in reverse acquisition $ -- $ -- $ 14,087
================= =============================
See Accompanying Notes to Financial Statements
5
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 Basis of Presentation
The consolidated balance sheet at the end of the preceding
fiscal year has been derived from the audited consolidated balance sheet
contained in the Company's Form 10-KSB and is presented for comparative
purposes. All other financial statements are unaudited. In the opinion of
management, all adjustments which include only normal recurring adjustments
necessary to present fairly the financial position, results of operations and
cash flows of all periods presented have been made. The results of operations
for interim periods are not necessarily indicative of the operating results for
the full year.
Footnote disclosures normally included in financial statements
prepared in accordance with the generally accepted accounting principles have
been omitted in accordance with the published rules and regulations of the
Securities and Exchange Commission. These consolidated financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's Form 10-KSB for the most recent fiscal year.
Note 2 Activities of the Company
The Company is in the development stage and has not yet
generated any revenues from operations. The Company's funds have been provided
from Loeb Holding Corporation, LTI Ventures Leasing Corporation, and from
certain private offerings.
As reflected in the accompanying consolidated financial
statements, the Company has incurred net losses of $1,105,410 since inception,
and at June 30, 1996, had a working capital deficiency of $805,151. These
factors, among others, indicate that if the Company is unable to secure
additional financing, it may be unable to continue in existence. The
accompanying financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue in existence.
Note 3 Long-Term Debt
On September 5, 1995, the Company and Loeb Holding Corp., as
agent, (Loeb) signed an agreement whereby Loeb purchased 841,455 shares of
Common Stock of the Company. In consideration for the sale of the stock, Loeb
agreed to loan the Company up to a maximum of $500,000 as evidenced by two
Promissory Notes dated September 5, 1995, one in the principal amount of
$475,000 and the other in the principal amount of $25,000.
The principal amount of the $475,000 note is to be repaid in
12 equal quarterly payments commencing two (2) years from the date of said note.
Prepayments may be made at any time without penalty. Interest is accrued at the
rate of nine percent (9%) per annum and interest payments are to be made
quarterly at the end of each calendar quarter, or at such earlier date that this
Note becomes due and payable as a result of acceleration, prepayment or as
otherwise provided herein. Interest shall begin to run from the date that the
monies are or were advanced to the Maker. On March 31, 1996, all interest
accrued through that date was calculated and was to be paid in four equal
installments on March 31, 1996, June 30, 1996, September 30, 1996 and December
31, 1996. In addition, the first quarterly interest payment shall be made on
March 31, 1996, for interest due for the first quarter of 1996, and quarterly
interest payments shall be made thereafter on March 31st, June 30th, September
30th and December 31st of each year.
6
<PAGE>
The Promissory Note for $25,000 accrues interest at the rate
of nine percent (9%) per annum payable quarterly and is convertible at the sole
option of the holder into a maximum of an additional 30% of the common shares of
the Company determined by a sliding scale based on the audited pretax profits of
the Company during the second and third years of operations of the Company on a
sliding scale based upon the Company achieving between 50% and 80% of the
projections provided to Loeb. (Example: If the Company achieves 80% or better of
projection, no conversion; if the Company achieves 50% or less of projection,
conversion into 30% of the Company; if the Company achieves between 50% and 80%
of projection, the note is convertible into the pro-rata portion of 30% of the
Company, i.e., 70% achievement equals one-third of the 30% of the Company.)
Unless previously converted, the principal amount of this note
shall be repaid by the Company in twelve (12) equal quarterly installments, the
first principal payment to be made on April 1, 1998.
On December 1, 1995, the Company and Loeb signed a convertible
interim loan agreement whereby Loeb loaned the Company the sum of $50,000 due in
60 days together with interest of 9% to be used as working capital. Additionally
on December 4, 1995, January 16, 1996, February 23, 1996, and March 12, 1996,
the Company and Loeb signed additional convertible interim loan agreements
whereby Loeb loaned the Company the sums of $100,000, $50,000, $25,000 and
$25,000 respectively. Each of these additional convertible interim loans were
due in 60 days from the date of each agreement and accrued interest at 9% per
annum.
Loeb has the option to convert the five convertible interim
loan agreements into two term Promissory Notes, one in the principal amount of
$237,500 and the other in the principal amount of $12,500. The two promissory
notes would supersede the above convertible interim loan agreements and
repayment of the advances would be governed by these promissory notes and not by
the provisions of any of the interim loan agreements. In consideration for the
conversion of the interim loan agreements into the two term Promissory Notes,
Loeb will receive 420,728 shares of Common Stock of the Company.
The principal amount of the $237,500 note is to be repaid in
12 equal quarterly payments commencing two (2) years from the date of said note.
Prepayments may be made at any time without penalty. Interest is accrued at a
rate of nine percent (9%) per annum and interest payments are to be made
quarterly at the end of each calendar quarter, or at such earlier date that the
Note becomes due and payable as a result of acceleration, prepayment or as
otherwise provided therein. Interest shall begin to run from the date that the
monies are or were advanced to the Maker.
The Promissory Note for $12,500 will accrue interest at the
rate of nine percent (9%) per annum payable quarterly and is convertible at the
sole option of the holder into a maximum of an additional 15% of the common
shares of the Company determined by a sliding scale based on the audited pretax
profits of the Company during the second and third years of operations of the
Company on a sliding scale based upon the Company achieving between 50% and 80%
of the projections provided to Loeb. (Example: If the Company achieves 80% or
better of projection, no conversion; if the Company achieves 50% or less of
projection, conversion into 15% of the Company; if the Company achieves between
50% and 80% of projection, the note is convertible into the pro-rata portion of
15% of the Company, i.e., 70% achievement equals one-third of the 15% of the
Company). Unless previously converted, this $12,500 principal amount, together
with any accrued but unpaid interest, shall become a demand note after the third
year of operation of the Company.
There was no cash paid for interest for the six months ended
June 30, 1996. As of the date of this report, no cash has been paid to Loeb for
interest and the Company is technically in default on the Loeb Notes.
Accordingly, such notes payable are classified as current liabilities in the
accompanying financial statements.
7
<PAGE>
Note 4 Computer Equipment Lease
On September 30, 1995, the Company entered into a sale and
lease-back arrangement with LTI Ventures Leasing Corp. (LTI) whereby the Company
sold the bulk of its computer hardware and commercially purchased software to
LTI. In consideration of the sale, the Company received a total of $169,599 and
agreed to lease back the hardware and software for initial terms ranging from 24
to 30 months at a monthly rental totaling $7,039.
As a consideration for entering into the aforementioned
agreement with the Company, LTI was granted a 5-year warrant to purchase a
maximum of 12,721 shares of Common Stock of the Company for cash at a price of
$2.00 per share.
Note 5 Loans Payable
Pursuant to a private offering, the Company issued 11.5 units
to various unrelated third parties in May and June 1996. Each $50,000 unit
consists of a $49,000 three year promissory note bearing interest at 10% per
annum and a Class A redeemable common stock purchase warrant valued at $1,000
per unit.
The principal and interest on the promissory notes are to be
repaid the earlier of three years from issuance or thirty days after the closing
date of the first underwritten public offering of the Company's securities.
Each Class A common stock purchase warrant entitles the holder
to purchase up to 25,000 shares of the Company's common stock at an exercise
price of $5.75 per share. The rights represented by this warrant are exercisable
commencing 90 days after the effective date of the public offering registration
statement until four years thereafter. The terms and conditions of these
warrants are subject to adjustment to conform with the warrants to be registered
upon effectiveness of the registration statement filed with the Securities and
Exchange Commission. At June 30, 1996, warrants to purchase 287,500 shares of
the Company's common stock are outstanding, pursuant to this offering.
Note 6 Convertible Notes Payable
In April and June 1996, the Company borrowed a total of
$30,000 from two unrelated third parties. The maturity date is the earlier of
January 1, 1998, or the consummation of a public offering of the Company's
common stock.
These notes bear interest at a rate of 7% per annum, payable
on the last day of each calendar quarter of each year, commencing March 31,
1997, to the maturity date.
If the maturity date of these notes shall occur prior to
January 1, 1998, in lieu of the $30,000 payment of the principal amount due, the
principal amount due shall be converted into 15,000 fully paid and
non-assessable shares of common stock of the Company.
Note 7 Subsequent Events
Stock Split - At the annual meeting, stockholders approved an
amendment to the Company's Certificate of Incorporation effecting a 2 for 1
reverse stock split of the outstanding shares of Common Stock of the Company as
of the record date (June 25, 1996) from 5,669,731 shares to 2,834,866 shares.
The accompanying financial statements give retroactive effect to the stock
split.
8
<PAGE>
Common Stock - In August 1996, the Company canceled 333,216
shares of its Common Stock which had been issued to Steven E. Pollan in
connection with the acquisition of Corporate Travel Link. The reason for such
cancellation related to various claims made by the Company against Mr. Pollan as
a result of material misrepresentation made to the Company and failure to
provide services to the Company. Pending return of the shares, they will be
considered outstanding for all periods presented.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company is in the development stage, has not yet generated
any revenues and has no commercial operations to date. The Company has been
unprofitable since inception and expects to incur additional operating losses
over the next several fiscal quarters. The Company does not expect to generate
any revenues from operations until 1997. As reflected in the accompanying
financial statements, the Company has incurred losses totaling $1,105,410 since
inception and at June 30, 1996, had a working capital deficit of $805,151.
Selling, general and administrative expenses were $422,428 for
the six months ended June 30, 1996 as compared to $128,311 during the six months
ended June 30, 1995. The primary reason for the difference between the two
periods is the commencement of operations during the earlier period when the
Company had no employees, while during the latter period the Company was fully
operational with 5 full-time employees. Payroll and payroll-related costs
increased approximately $115,000 during 1996. Other cost increases during the
1996 period consist of consulting fees ($40,000), professional fees ($99,000),
travel costs ($11,000), marketing costs ($7,000) and other administrative costs
($22,000).
Comparison of the results of operations during the 4 months
ended December 31, 1995, to the same period in 1994 is not deemed meaningful as
the Company only incurred nominal operating costs during the 1994 period.
Liquidity and Capital Resources
The Company's funds have principally been provided from Loeb
Holding Corp., LTI Ventures Leasing Corporation and a private offering, as
described below.
In September 1995, Loeb Holding Corp. as agent, (Loeb) agreed
to loan the Company up to a maximum of $500,000 as evidenced by two Promissory
Notes dated September 5, 1995, one in the principal amount of $475,000 and the
other in the principal amount of $25,000. In addition, Loeb loaned the Company
an additional $150,000 in December 1995, $80,000 during the three months ended
March 31, 1996, and $20,000 in April 1996. Total loan proceeds to date are
$750,000.
On September 30, 1995, the Company entered into a sale and
lease-back arrangement with LTI Ventures Leasing Corp. (LTI) whereby the Company
sold the bulk of its computer hardware and commercially purchased software to
LTI. In consideration for the sale, the Company received a total of $169,599 and
agreed to lease back the hardware and software for initial terms of 24 to 30
months at a monthly rental totaling $7,039.
During the quarter ended March 31, 1996, the Company sold
5,000 shares of the Company's restricted Common Stock to a former officer and
the director of the Company for $70,000. During the same period, the Company
also sold 25,000 shares of the Company's restricted Common Stock to an unrelated
party for $50,000.
Pursuant to a private offering, the Company issued 11.5 units to various
unrelated third
10
<PAGE>
parties in May and June 1996. Each $50,000 unit consists of a $49,000 promissory
note and a Class A redeemable Common Stock purchase Warrant valued at $1,000 per
unit. Each warrant entitles the holder to purchase 25,000 shares of the
Company's common stock at $5.75 per share. Total proceeds received from this
offering was $575,000 and warrants to purchase 287,500 shares of the Company's
common stock were issued.
In April and June 1996, the Company received loan proceeds of
$30,000 pursuant to agreements entered into with two unrelated parties. These
notes are convertible into 15,000 shares of the Company's common stock if the
maturity date occurs prior to January 1, 1998.
At June 30, 1996, the Company had cash of $396,928 and a
working capital deficit of $805,151. Management of the Company estimates that it
will require additional funding of approximately $750,000 to provide for its
planned operating for the next six months. The Company is exploring a number of
operations for next six months. The Company is exploring a number of options to
raise the required funds, including the initial public offering contemplated
herein, but there are no assurances that additional financing will be
consummated.
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K.
A report on Form 8-K, complete with all applicable exhibits,
was filed on February 2, 1996.
10
<PAGE>
SIGNATURES
Pursuant to 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.
GENISYS RESERVATION SYSTEMS, INC.
(formerly Robotic Lasers, Inc.)
Date: November 7, 1996
Joseph Cutrona
President and Chairman
Date November 7, 1996
John H. Wasko
Secretary, Treasurer and
Principal Financial Officer
11
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Company's financial statements for the six months ended June 30, 1996
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 397
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 397
<PP&E> 479
<DEPRECIATION> 59
<TOTAL-ASSETS> 846
<CURRENT-LIABILITIES> 1203
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1028)
<TOTAL-LIABILITY-AND-EQUITY> 846
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 465
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48
<INCOME-PRETAX> (513)
<INCOME-TAX> 0
<INCOME-CONTINUING> (513)
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<NET-INCOME> (513)
<EPS-PRIMARY> (18)
<EPS-DILUTED> (18)
<PAGE>
</TABLE>