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
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.)
PO Box 2039, Newark, New Jersey 07114
(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 March 31, 1996:
5,669,700 shares of Common Stock
Transitional Small Business Disclosure Format (check one)
Yes X No
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(a Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
March December
31,1996 31, 1995
(unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 248 $ 22,613
Prepaid Expenses -- 703
Total Current Assets 248 23,316
EQUIPMENT, NET OF
ACCUMULATED
DEPRECIATION OF
$35,995 and $17,393 339,754 302,381
OTHER ASSETS
Deposits and Other 28,907 26,988
$368,909 $ 352,685
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable and
accrued expenses $ 154,333 $ 117,138
Current portion of obligation
under computer
equipment lease 57,756 45,012
Accrued interest payable 43,378 28,096
Accrued consulting fees - officer 31,500 --
Payroll taxes payable 10,000 10,000
Total current liabilities 296,967 200,246
LONG-TERM DEBT 725,000 650,000
LONG-TERM PORTION OF
OBLIGATION UNDER
COMPUTER EQUIPMENT
LEASE 93,918 89,746
1,115,885 939,992
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; 5,669,700
and 5,609,700
Shares Issued and Outstanding 567 561
Paid In Capital 64,946 4,952
Deficit Accumulated During the
Development Stage (812,489) ( 592,820)
(746,976) ( 587,307)
$368,909 $ 352,685
See Accompanying Notes to Financial Statements
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
DURING THE DEVELOPMENT STAGE
(unaudited)
From Inception
(March 7, 1994) Three Months Three Months
Through Ended Ended
March 31, March 31, March 31,
1996 1996 1995
REVENUES AND EXPENSES DURING
THE DEVELOPMENT STAGE:
Revenue $ -- $ -- $ --
Expenses:
General and Administrative 717,350 178,859 15,998
Depreciation and Amortization 36,469 18,662 60
753,819 197,521 16,058
(LOSS) FROM OPERATIONS (753,819) ( 197,521) ( 16,058)
INTEREST EXPENSE 58,670 22,148 155
NET (LOSS) INCURRED
DURING THE
DEVELOPMENT STAGE ($812,489) ($219,669) ($16,213)
NET (LOSS) PER
COMMON SHARE ($ .16) ($ .04) ($ .00)
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING5,224,634 5,632,117 5,069,543
See Accompanying Notes to Financial Statements
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Common Stock
Total Shares Value
BALANCE - DECEMBER 31,
1995 ($587,307) 5,609,700 $561
ISSUANCE OF COMMON
STOCK 60,000 60,000 6
NET (LOSS) FOR THE
THREE MONTHS ENDED
MARCH 31, 1996 ( 219,669) -- --
BALANCE - MARCH 31, 1996 ($746,976) 5,669,700 $567
Deficit Accumulated
Capital During the
In Excess Development
Of Par Stage
BALANCE - DECEMBER 31,
1995 $ 4,952 ($592,820)
ISSUANCE OF COMMON
STOCK 59,994
NET (LOSS) FOR THE
THREE MONTHS ENDED
MARCH 31, 1996 -- ( 219,669)
BALANCE - MARCH 31, 1996 $64,946 ($812,289)
See Accompanying Notes to Financial Statements
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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)
Through Three Months Ended Three MonthsEnded
March 31, March 31, March 31,
1996 1996 1995
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net (Loss) ($812,489) ($219,669) ($16,213)
Adjustment to Reconcile
Net (Loss) to Cash
Flows from Operating Activities:
Depreciation and Amortization 36,469 18,662 60
Common Stock issued for
services rendered 19,600 -- 9,600
Changes in operating assets
and liabilities:
Other Assets ( 29,381) ( 1,979) ( 27,500)
Accounts Payable and
Accrued Expenses 185,833 68,695 ( 12,371)
Prepaid Expenses -- 703 --
Payroll Taxes Payable 10,000 - --
Accrued Interest Payable 43,378 15,282 --
NET CASH PROVIDED
(USED) BY OPERATING
ACTIVITIES: ( 546,590) ( 118,306 ) ( 46,424 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Equipment ( 375,749) ( 55,975) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Note Payable
- Loeb Holding Corp. 725,000 75,000 60,000
Other ( 14,087) -- --
Payments under Computer
Equipment Lease ( 17,925) ( 8,201) --
Proceeds from sale and
lease-back 169,599 25,117 --
Issuance of Common Stock 60,000 60,000 --
NET CASH PROVIDED BY
FINANCING ACTIVITIES: 922,587 151,916 60,000
NET INCREASE
(DECREASE) IN CASH 248 ( 22,365) 13,576
CASH - BEGINNING OF
PERIOD -- 22,613 40
CASH - END OF PERIOD $ 248 $ 248 $ 13,616
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 15,292 $ 6,866 $ --
See Accompanying Notes to Financial Statements
5
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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, Country Club Transportation Services, Inc., an affiliated
entity and LTI Ventures Leasing Corporation.
As reflected in the accompanying consolidated financial
statements, the Company has incurred net losses of $812,489 since inception,
and at March 31, 1996, had a working capital deficiency of $296,719. These
factors, among others, indicate that the Company 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.
(Loeb) signed an agreement whereby Loeb purchased 1,682,910 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.
(a) The promissory note for $475,00 supersedes the previous
Interim
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Loan Agreements and repayments of the advances is governed by these promissory
notes and not by the provisions of any of the interim loan agreements.
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
shall 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.
(b) 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 an 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 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 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 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 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 841,455 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.
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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 three months ended
March 31, 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.
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.
At the end of the initial lease term, the Company may:
(a) Extend the Initial Term for not less than all
Equipment for an
additional 12 months at a Monthly Rental equal to a
prescribed percentage of the Monthly Rental paid by
Lessee
during the Initial Term, provided all payments have
been
made in accordance with the Lease and there shall be
no
default under the Lease by the Lessee, title to the
Equipment
shall pass to Lessee at the expiration of the
12-month extension and upon payment of $1.00;
(b) Extend the Initial Term for not less than all the
Equipment for
an additional 12 months at Fair Market Value rental;
(c) Purchase not less than all the Equipment at
Fair Market
Value for a purchase price equal to the Fair Market
Value
thereof as of the end of the Initial Term, plus
any taxes
applicable at the time of purchase. The purchase
price shall
be paid by Lessee to Lessor at least thirty (30)
days before
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the expiration of the Initial Term; or
(d) Return not less than all the Equipment, subject to
remarketing charge equal to 5% of the Purchase Price.
As a consideration for entering into the aforementioned
agreement
with the Company, LTI was granted a 5-year warrant to purchase a maximum of
21,673 shares of Common Stock of the Company for cash at a price of $1.00 per
share.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operations, Liquidity and Capital Resources
The Company is in the development stage and has not yet
generated
any revenues from operations. As reflected in the accompanying financial
statements, the Company has incurred losses of $812,489 since inception and at
March 31, 1996 had a working capital deficit of $296,719.
At March 31, 1996, current assets were lower than current
liabilities
by $296,719, while at December 31, 1995, current assets were lower than current
liabilities by $176,930. The current ratio was 0.001 to 1 at March 31, 1996,
and 0.12
to 1 at December 31, 1995.
Selling, general and administrative expenses were $178,859
for the
three months ended March 31, 1996 as compared to $15,998 during the three
months ended March 31, 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.
The Company's funds have principally been provided from Loeb
Holding Corp. (See Note 3), and LTI Ventures Leasing Corporation (See Note 4).
On September 5, 1995, the Company and Loeb Holding Corp.
signed an agreement whereby Loeb purchased 1,682,910 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. In addition, Loeb loaned the Company an additional
$150,000 in December 1995 and $75,000 during the three months ended March 31,
1996.
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 (See Note 4).
During the quarter ended March 31, 1996, the Company sold
10,000
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shares of the Company's restricted Common Stock to a former officer and
director of
the Company at a price of $1.00 per share. During the same period, the Company
also sold 50,000 shares of the Company's restricted Common Stock to an unrelated
party at a price of $1.00 per share.
At March 31, 1996, the Company had cash and cash equivalents
of
$248 and a working capital deficit of $296,719. Management of the Company
estimates that it will require additional funding of approximately $500,000 to
provide
for its planned operations for the next six months. The Company is exploring a
number of options to raise the required funds, but there is 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.
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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: September 4, 1996
Joseph Cutrona
President and Chairman
Date: September 4, 1996
John H. Wasko
Secretary, Treasurer and
Principal Financial Officer
EXHIBIT 27
FINANCIAL DATA SCHEDULE
Genisys Reservation Systems, Inc.
Fiscal Year End December 31, 1996
Period Start January 1, 1996
Peirod End March 31, 1996
Cash .248
Securities -
Receivables -
Allowances -
Inventory -
Current Assets .248
PP&E 375.7
Depreciation (36.0)
Total Assets 368.9
Current Liabilities 299.0
Preferred Mandatory -
Preferred -
Common .567
Other SE (746.4)
Total Liability and Equity 368.9
Sales -
Total Revenues -
CGS -
Total Costs -
Other Expenses 753.8
Loss Provision -
Interest Expense 58.7
Income Pretax (812.5)
Income Tax -
Income Continuing (812.5)
Discontinued -
Extraordinary -
Changes -
Net Income (812.5)
EPS-Primary (.16)
EPS Diluted (.16)
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September 4, 1996
Securities and Exchange Commission
Washington, D.C.
Re: Genisys Reservation Systems, Inc.
and Subsidiary (formerly Robotic Lasers, Inc.)
Gentlemen:
On behalf of our cllient, we transmit to you Form 10-QSB.
Very truly yours,
David W. Sass
