SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-KSB
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
X Annual Report Pursuant to Section 13 or
15(d) of The Securities Exchange Act of
1934
For the fiscal year ended December 31, 1996
or
Transitional Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the transition period from to
Commission File Number 033-19522-NY
GENISYS RESERVATION SYSTEMS, INC.
(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, Union, New Jersey 07083
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 810-8767 Securities
registered pursuant to Section 12(b) of the Act: NONE Securities registered
pursuant to Section 12(g) of the Act:
Common Stock, par value $.0001 per share
Class A Redeemable Warrants
Class B Redeemable Warrants
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes - X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. The aggregate market value shall be computed by
reference to the price at which the stock was sold, or the average bid
and asked prices of such stock, as of a specified date within 60 days
prior to the date of filing.
$12,275,802 as of the close of business on March 24, 1997
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. The number of shares
outstanding of the registrant's Common Stock as of March 25, 1997 was 4,330,594
shares.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document
is incorporated: (1) any annual report to security-holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(C) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes.
1. Rule 424(b) Prospectus dated March 20, 1997 is incorporated herein by
reference into Parts I, II and III
3.1 Registrant's Articles of Incorporation
3.2 Registrant's By-Laws
4.1 Form of Common Stock Certificate
4.2 Redeemable Warrant Agreement with Form of Class A and
Class B Warrant
10.1 Employment Agreement dated October 17, 1996 between
Registrant and Joseph Cutrona.
10.2 Consulting Agreement dated October 18, 1996 between the
Registrant and Mark A. Kenny.
10.3 Employment Agreeement dated October 17, 1996 between
Registrant and John Wasko.
10.4 Copy of lease dated November 1, 1995 between Unicom and
Corporate Travel Link, Inc.
10.5 Copy of Agreement dated June 22, 1995 between American
Airlines, Inc., and Corporate
Travel Link, Inc., relating to Sabre Extension Program-
Associate Distribution and Services Agreement.
10.6 Copy of Agreement dated June 30, 1995 between American
Airlines, Inc. and Corporate
Travel Link, Inc., relating to Associate Sabre Equipment
Lease Agreement.
10.7 Copy of Agreement dated June 30, 1995 between American
Airlines, Inc., and Corporate
Travel Link, Inc. - non-standard system amendment to
Corporate Sabre Equipment Lease Agreement.
10.8 Copy of Script Consulting Agreement dated June 21, 1995
between Worldspan, LP and Corporate Travel Link, Inc.
10.9 Copy of Script Services agreement dated June 21, 1995
between Worldspan, LP and Corporate Travel Link, Inc.
10.10 Copy of Galileo Services Display and Reservation Agreement
dated August 28, 1995 between Galileo International
Partnership and Corporate Travel Link, Inc.
10.11 Copy of Ancillary Services Agreement dated August 28, 1995
between Galileo International Partnership and Corporate Travel
Link, Inc.
10.12 Copy of Worldspan Car Rental Associate Reservation Agreement
between Worldspan, LP and Corporate Travel Link, Inc.
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10.13 Copy of Interim Loan Agreement between the Registrant and Loeb
Holding Corporation and certain executives of the Registrant.
10.14 Prosoft Consulting Agreement
21 List of Subsidiaries
All of the above-referenced documents, with the exception of the Rule 424(b)
Prospectus, are incorporated herein by reference to the Exhibit bearing the same
number in the Registrant's Registration Statement on Form SB-2, File No.
333-15011.
1
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Part I
Item 1. Business
History
The Company was incorporated in New Jersey in April 1986 as a
wholly-owned subsidiary of JEC Lasers, Inc. ("JEC") to continue the research and
development of an ultra-compact, multi-kilowatt CO2 laser begun under an
agreement with Loughborough Consultants Ltd. ("LCL"), which is affiliated with
Loughborough University of Technology, Loughborough, Leicestershire, England.
Due to the uncertain financial condition of JEC and, in order to
preserve the CO2 laser technology which management felt may have had some value,
on May 30, 1986, the Board of Directors of JEC voted to spin-off Robotic Lasers
into an independent, publicly-owned corporation by issuing a stock dividend of
one share of the Company's Common Stock for every four shares of JEC common
stock outstanding to all shareholders of record as of July 8, 1986. On September
23, 1988, the shares were registered under the Securities Act of 1933, as
amended. On June 25, 1986, the Company and JEC signed a Purchase Agreement
whereby the Company acquired all the assets, rights and properties relating to
JEC's CO2 laser research and development agreement with LCL, subject to certain
liabilities.
On March 3, 1995, the Company sold all of the assets, rights and
properties relating to the CO2 laser research and development agreement with
LCL, subject to certain liabilities, to JEC for $345,593 which generated a
profit of approximately $246,000.
On August 9, 1995, the shareholders of the Company approved an
amendment to the Company's Certificate of Incorporation to effect a
one-for-fifty-five reverse stock split pursuant to which each fifty-five shares
of the Company's Common Stock outstanding as of its close of business on July
12, 1995 was replaced by one share of Common Stock. The reverse stock split
reduced the number of outstanding shares of Common Stock of the Company as of
July 12, 1995 from 30,853,352 to 560,970 (before July 16, 1996 one-for-two
reverse split) shares of Common Stock.
On August 11, 1995, the Company acquired Corporate Travel Link, Inc. (a
development-stage enterprise) which was incorporated on March 7, 1994, by
issuing 1,682,924 shares of restricted New Common Stock of the Company (after
the July 16, 1996 one-for-two reverse split. See Notes 1 and 3 to December 31,
1996 financial statements) in exchange for 200 shares of the Common Stock of
Corporate Travel Link ("Travel Link") which represented all of the authorized,
issued and outstanding shares of common stock of Travel Link.
Since August 11, 1995, the Company's business and operations have
consisted solely of the business and operations of Travel Link which continues
to operate as a wholly-owned subsidiary of the Company.
On July 16, 1996, the Company's stockholders approved and effectuated a
one-for-two reverse stock split. Such split has been retroactively reflected in
the text of this document and in the accompanying consolidated financial
statements and notes.
General
The principal business activity of Genisys Reservation Systems, Inc.
("Company") is developing a computerized limousine reservation and payment
system for the business traveler. The management of the Company anticipates that
the proprietary software that is being developed will enable limousine
reservations to be completely computerized i.e., be entirely automatic and
operate without human intervention except for the initial inputing of travel
information. Genisys Reservation Systems, Inc. is a development stage company
and has no commercially available products at the present time.
At the present time, there are four major airline computer reservation
systems in operation in the United States -- "Sabre," "Worldspan," "Apollo" and
"System One" (each reservation system referred to hereinafter as
2
<PAGE>
a "CRS"). Each CRS allows a travel agency or corporate travel department to make
an airline reservation and receive instantaneously a confirmation and a printed
airline ticket on any airline. It is also possible to make a hotel reservation
with any of the major hotel chains through any CRS and receive an instantaneous
confirmation of room availability. Additionally, a travel agent or corporate
travel manager may make an automobile reservation with any of the major car
rental companies (Hertz, Avis and the like) through any CRS and receive an
immediate confirmation of the car rental reservation.
When it comes to limousine reservations, however, there is at present
no method for making a reservation through a CRS and receiving an immediate
guaranteed confirmation. The usual method of making a limousine reservation in a
destination city is to call a limousine company, if the corporate travel
department or travel agent knows of one. This use of the telephone, with its
attendant inconveniences such as "telephone tag" and missed communications, can
make securing a confirmed limousine reservation inconvenient.
The Company seeks to solve the problem by:
1. Developing a limousine reservation system that utilizes the
CRS' already in use;
2. Developing a way to identify and qualify the best limousine
service providers in the cities that
are the business travelers' most frequent destinations;
3. Developing a way to disseminate reservation information to
corporate clients and to limousine service providers with no errors, with
immediate confirmation and without the need to utilize the telephone;
4. Developing an automated electronic payment system to
process all fees charged by the Company to its clients;
5. Performing the above described tasks with a high degree of
quality control; and
6. Providing corporate clients with precise management and financial
information, to enable them to ascertain where their money is being spent.
The Company is developing its own computer system which will link with
one or more of the CRS's. The Company's computer system will be made up of two
systems, the Genisys Reservation System and the Genisys Payment System. The
Genisys Reservation System will be a fully automated computer system that allows
travel agents to make limousine bookings directly through any CRS, much like
hotel and car bookings. The Genisys Payment System is an automated electronic
payment and reporting system which will process and reconcile all purchases made
through the Genisys Reservation System. The Genisys Payment System is not yet
operational. All hardware required for development and commercial operation of
the Company's Reservation and Payment Systems has been purchased, and are
off-the-shelf components not manufactured by the Company.
Employees
The Company presently employs 5 full-time employees; 2 executive
officers, 2 marketing executives, and 1 office administrator. None of these
employees is covered by a collective bargaining agreement. The Company utilizes
several software and marketing consultants on a part-time basis and one
full-time ground transportation industry consultant. The company believes its
personnel relations to be satisfactory.
3
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Item 2. Properties
The Company presently leases approximately 1,500 square feet of office
space at 2401 Morris Avenue, Union, New Jersey, 07083. The five-year lese
expires in November 2000 and provides for a monthly rental of $2,125.00. This
property has been leased from unaffiliated third parties and adequately
satisfies the present needs of the Company. The Company anticipates that it will
need approximately 3,500 square feet in additional space in mid 1997.
A portion of the additional space (approximately 1,500 square feet)
will be used to house the computer hardware system which runs the Company's
Reservation and Payment Systems software programs. The balance of the space will
be used for additional corporate and sales offices. The Company requires no
manufacturing facilities since it has no present plans to manufacture any
hardware items. All hardware related to the Company's software product is
purchased commercially.
Item 3. Legal Proceedings
On February 20, 1997, two individuals filed an action against the
Company and Travel Link in the Superior Court of New Jersey seeking, among other
things, damages in the amount of 8% of any financing secured by Travel Link
resulting from plaintiffs efforts and as well as 5% of the Company's Common
Stock allegedly due for services rendered in connection with the Company's
acquisition of Travel Link in 1995. The claim for money damages is based upon an
alleged written agreement between Travel Link and plaintiffs, while the claim
for the shares of Common Stock is based upon alleged oral representations and
promises made by an officer of Travel Link. The Company believes that the
plaintiffs claims are without merit and intends to vigorously defend the action.
In August 1996, the Company gave notice to one of its former officers,
Mr. Steven E. Pollan, that it was canceling 333,216 shares of Common Stock
issued to him for services he was to have provided at the inception of Corporate
Travel Link, Inc. The Company believes that Mr. Pollan never provided such
services; Mr. Pollan has informed the Company, however, that he will contest any
attempt to cancel his shares.
Item 4. Submission of Matters to a Vote of Security Holders
A special meeting of the shareholders of the Company was held at the
offices of Paul A. Wurtzel, Esq., 300 Grand Avenue, Englewood, New Jersey,
07631, on Wednesday, August 9, 1995 at 9:30 a.m. At the meeting, the
shareholders of the Company approved an amendment to the Company's Certificate
of Incorporation to effect a one-for-fifty-five reverse stock split pursuant to
which each fifty-five shares of the Company's Common Stock outstanding as of the
end of business on July 1, 1995 was replaced by one share of New Common Stock.
The Reverse Stock Split reduced the number of outstanding shares of Common Stock
of the Company as of July 12, 1995 from 30,853,352 to 560,970.
The annual meeting of shareholders of the Company was held at the
offices of Corporate Travel Link, Inc., 2401 Morris Avenue, 3rd Floor, Union,
New Jersey, 07083, on Tuesday, July 16, 1996, at 9:30 a.m. At the meeting the
shareholders of the Company approved an amendment to the Company's Certificate
of Incorporation to effect a one-for-two reverse stock split pursuant to which
each two shares of the Company's new common stock outstanding as of the end of
business of June 25, 1996, was replaced by one share of Common Stock of Genisys
Reservation Systems, Inc. The reverse stock split reduced the number of
outstanding shares of common stock of the Company as of June 25, 1996, from
5,669,731 to 2,834,866.
4
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Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
Market Information
Prior to 1997, the Company's Common Stock was eligible to trade in the
over-the counter market, however, the Company was unable to locate any market
markers in its stock. The Following table indicates the quarterly high and low
bid prices for the last two years for the Company's Common Stock, which became
publicly traded on September 23, 1988:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Bid Price Bid Price
1996 1995
Quarter Ended High Low High Low
March 31 Not Available Not Available
June 30 Not Available Not Available
September 30 Not Available Not Available
December 31 Not Available Not Available
</TABLE>
The foregoing prices were provided by National Quotation Bureau.
As of March 20, 1997, the Effective Date of the Company's Registration
Statement, it's Common Stock, Class A Redeemable Warrants and Class B Redeemable
Warrants are quoted on the Nasdaq Small Cap Market.
Approximate Number of Equity Security Holders
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Approximate Number of
Holders of Record as
Title of Class of March 5, 1997
-------------- ----------------------
Common Stock,
$.0001 par value 769
</TABLE>
Included in the number of stockholders of record are shares held in
"nominee" or "street" name.
Dividends
The Company has never paid any cash dividends. The Company presently
intends to retain any future earnings for use in its operations and, therefore,
does not expect to pay cash dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Components of Revenues and Expenses Revenues.
The Company is a development-stage company and has
generated no revenues and has no
5
<PAGE>
commercial operations to date. The Company did not generate any revenues from
operations during the fiscal year ended December 31, 1996. The Company does
expect to bring its Genisys Reservation and Payment Systems on-line through two
of the four CRS' in existence (Sabre and Worldspan) in mid 1997, at which time
the Company expects to generate revenues. The Company anticipates completing
development of and bringing a third CRS, Apollo, on-line in late 1997, which it
expects to increase revenues.
The Company anticipates that its Genisys Reservation and Payment
Systems will generate revenue from the following sources: (I) a booking fee
charged for use of the Genisys Reservation System and billed through the Genisys
Payment System, (ii) a processing fee generated by charges processed through the
Genisys Payment System, (iii) an annual software licensing fee charged to the
limousine service providers who utilize the Genisys Reservation and Payment
Systems.
Expenses. Cost of service will include all costs directly attributable to the
Company's provision of services to its corporate clients and the limousine
service providers. The most significant component of cost of service is the
booking fee charged by the CRS for reservations made by the Genisys systems
utilizing the CRS. Booking fees are a set amount charged by each CRS for
transactions posted through the system. Cost of service also includes the access
and file fees charges by a commercial bank acting as the Company's Automated
Clearing House in distributing payments made to limousine service providers
through the Genisys Payment System.
General and administrative expenses include salaries, commissions and
benefits, travel costs, professional fees, rent, telephone and other operating
costs of the Company. The Company has not capitalized any internal expenditures
with respect to the costs of developing and implementing the Genisys Reservation
and Payment Systems.
Results of Operations
The Company is in the development stage and 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 mid 1997. As reflected in the accompanying
financial statements, the Company has incurred losses totaling $1,645,003 since
inception and at December 31, 1996, had a working capital deficit of $600,043.
Selling, general and administrative expenses were $819,205 for the year
ended December 31, 1996 as compared to $256,621 for the year ended August 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 only 4
part-time employees for approximately half the period, while during the latter
period the Company was operational with 5 full-time employees. Payroll and
payroll-related costs increased approximately $250,000 during 1996. Other
approximate cost increases during the 1996 period consist of consulting fees
($54,000), travel costs ($23,000), marketing costs ($16,000), other
administrative costs ($83,000) and professional fees ($136,000). Professional
and consulting fees for the year ended December 31, 1996, totaled $237,000. Such
amount consisted of attorneys fees of $84,000, accounting fees of $42,000,
accrued consulting fees of $36,000 payable to Loeb partners, $48,000 payable to
John H. Wasko (accrued prior to his becoming an employee of the Company),
$16,000 in consulting fees payable to Mark A. Kenny and miscellaneous fees of
$11,000. Loeb partners, Mr. Kenny and Mr. Wasko are affiliates of the Company.
Liquidity and Capital Resources
The Company's funds have principally been provided from Loeb Holding
Corporation, as escrow agent ("Loeb"), for Warren D. Bagatelle, HSB Capital,
trusts for the benefit of families of two principals of Loeb Holding
Corporation, and three unaffiliated individuals, LTI Ventures Leasing
Corporation and a private offering,
6
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as described below.
In February 1995, Loeb agreed to loan the Company up to a maximum of
$500,000 as evidenced by Convertible Notes. In addition, pursuant to five
interim loan agreements, Loeb loaned the Company an additional $250,000 from
December 1995 through March 1996. In November and December 1996, Loeb Holding
Corporation loaned the Company $210,000 evidenced by a series of eighteen month
term Promissory Notes bearing interest at the annual rate of 10%. Total loan
proceeds from Loeb and Loeb Holding Corporation to date are $960,000.
In September 1995, January 1996 and December 1996, the Company entered
into sale and lease-back arrangements 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 sales, the Company received
a total of $295,000 and agreed to lease back the hardware and software for
varying terms at a monthly rental totaling $11,960.
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 $10,000. 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
sixteen unaffiliated third parties in May and June 1996. Each $50,000 unit
consists of a $49,000 promissory note and a Class A Redeemable Warrant valued at
$1,000 per unit. Each such warrant entitles the holder to purchase 25,000 shares
of the Company's Common Stock at $5.75 per share. The proceeds from this
offering totaled $575,000 and Class A Redeemable Warrants to purchase 287,500
shares of Common Stock were issued by the Company.
In April and June 1996, the Company borrowed a total of $30,000 from
two unaffiliated third parties pursuant to two convertible notes. 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.
In November 1996, the Company sold 25,000 shares of the Company's
restricted Common Stock to an unaffiliated party for $50,000.
At December 31, 1996, the Company had cash of $91,548 and a working
capital deficit of ($600,043). The Company intends to fund its operations and
other capital needs for the next twelve (12) months substantially from revenues
generated by the Company's planned operations and the proceeds from its public
offering of stock.
During the quarters ended September 30, 1996, and December 31, 1996,
Joseph Cutrona, President of the Company, made capital contributions to the
Company in the amounts of $41,700 and $35,000 respectively. In February 1997,
Mr. Cutrona made additional capital contributions totaling $19,700.
In February and March 1997, the Company borrowed a total of $65,000
from three unaffiliated third parties pursuant to three eighteen (18) month
Promissory Notes bearing interest at 10% per annum payable at maturity. These
notes are secured by 16,250 shares of the Company's restricted Common Stock
owned by Joseph Cutrona and 16,250 shares owned by Mark A. Kenny.
On March 26, 1997, the Company consummated a public offering of its
securities consisting of 1,035,000 shares of Common Stock at $5.00 per share,
1,725,000 Class A Redeemable Warrants at $.20 per
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Class A Redeemable Warrant and 1,035,000 Class B Redeemable Warrants at $.10 per
Class B Redeemable Warrant. The Net proceeds of such offering totaled
$4,657,445.
Inflation is not expected to have any material effect on the Company.
Item 7. Financial Statements and Supplementary Data.
See Pages F-1 through F-16.
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosures
Not applicable
8
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PART III
Item 9. Directors and Executive Officers of the Registrant
The following table sets forth certain information with respect to each
of the Company's directors and executive officers.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NAME AGE POSITION
Joseph Cutrona 59 President and Director
John H. Wasko 58 Chief Financial Officer,
Secretary, Treasurer
and Director
Mark A. Kenny 44 Director
Warren D. Bagatelle 58 Chairman and Chief Executive Officer
</TABLE>
The Company's Executive Committee is empowered to exercise the full
authority of the Board of Directors in circumstances when convening the full
Board is not practicable. Messrs. Warren D. Bagatelle, John H. Wasko, and Joseph
Cutrona currently serve as members. All officers of the Company other than Mr.
Bagatelle devote their full time to the Company's business.
Joseph Cutrona has served the Company as President and as a Director
since August 1995, and has served as President and as a Director of Travel Link
since its inception on March 11, 1994. From 1992 to 1995, Mr. Cutrona was
engaged as a marketing consultant of Country Club Transportation Services,
Newark, New Jersey, a company providing limousine services. From 1990 to 1992,
he served as Marketing Director of Gem Limousine, Edison, New Jersey, a provider
of limousine servies. From 1978 to 1990, Mr. Cutrona provided limousine
consulting services to large corporations in the tri-state area. Mr. Cutrona
graduated from Fairleigh Dickinson University, the University of Maryland and
Sophia University, Osaka Japan.
John H. Wasko has served the Company as a Director since August 1995,
as Secretary since September 1995, and as Treasurer and Chief Financial Officer
since April 1996. Mr. Wasko has also served the Company as President and
Chairman of the Board since its inception to August 1995, and as Treasurer from
April 1986 to September 1987 and from May 1988 to August 1995. Mr. Wasko has
also served as Chairman of the Board, President and Director of JEC since it was
organized in September 1977. He was awarded a bachelor of science degree in
physics in 1963 and a master of science degree in physics (summa cum laude) in
1965 from Fairleigh Dickinson University.
Mark A. Kenny, currently a consultant to the Company, served as the
Company's Executive Vice President from August 1995 to October 1996 and as a
Director since August 1995. He has also served as Executive Vice President of
Travel Link from inception, March 1974 to November 1996 and as a Director since
inception. From 1974 to November 1996, he was a partner of Country Club
Transportation Services, a provider of limousine services, which he co-founded
in 1974. Mr. Kenny is one of the original members of the New Jersey Business
Travel Association and attended Seton Hall Preparatory School and Seton Hall
University. He is also a member of the Association of Corporate Travel
Executives and a charter member of the New Jersey Limousine Association.
Warren D. Bagatelle has been a Director of the Company since August
1995, and Chairman of the Board of Directors of the Company and Chief Executive
Officer since December 1996. Since 1988, he has been a Managing Director at Loeb
Partners Corporation, a New York City investment banking firm and a member of
the New York and American Stock Exchanges. Mr. Bagatelle is also a director of
Energy Research
9
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Corporation, a company engaged in the development and commercialization of
electrical storage and power generation equipment, principally fuel cells and
rechargeable storage batteries. From 1981 to 1987, he was head of Corporate
Finance and Chairman of Josephthal, Lyon & Ross Incorporated (formerly
Rosenkrantz, Lyon & Ross, Inc.) an investment banking firm. Mr. Bagatelle has a
B.A. in economics from Union College and an M.B.A. from Rutgers University.
Item 10. Executive Compensation
The following tabulation shows the total compensation paid by the
Company for services in all capacities during the years ended December 31, 1996
and 1995, and August 31, 1995 to the officers of the Company and total
compensation for all Officers as a group for such period:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Annual Compensation Long Term Compensation
Awards Payout
Other Restricted All
Annual StOptions LTIP Other
Name and Year Salary Bonus Compensation Awards /SAR's Payout Compensation
-------- ---- ------ ----- ------------ ------ ------ ------ ------------
Principal Position (Mgmt. Fee)
- ------------------
Joseph Cutrona 1996 $73,500 $0 $ 5,000 0 0 0 0
President
1995 $45,000 $0 $ 3,840 0 0 0 0
1995 $28,000 $0 $ 3,840 0 0 0 0
Mark A. Kenny 1996 $42,000 $0 $16,250 0 0 0 0
1995 $44,795 $0 $ 3,840 0 0 0 0
1995 $28,000 $0 $ 3,840 0 0 0 0
John H. Wasko 1996 $10,000 $0 $48,000 0 0 0 0
Chief Financial Officer,
Secretary& Treasurer 1995 $0 $0 $ 2,500 0 0 0 0
1995 $0 $0 $ 2,500 0 0 0 0
Warren D. Bagatelle 1996 $0 $0 $36,000(1) 0 0 0 0
Chief Executive Officer
1995 $0 $0 $0 0 0 0 0
1995 $0 $0 $0 0 0 0 0
</TABLE>
(1) Represents accrued but unpaid consulting fees to Loeb Partners Corporation
of which Warren D. Bagatelle is Managing Director.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following tabulation shows the security ownership as of December
31, 1996 of (I) each person known to the Company to be the beneficial owner of
more than 5% of the Company's outstanding Common Stock, (not including 333,216
shares issued to Steven E. Pollan which the Company has given notice of
cancellation as a result of certain disputes between Mr. Pollan and the
Company), (ii) each Director and officer of the Company and (iii) all Directors
and Officers as a group.
10
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF PERCENT
NAME & ADDRESS SHARES OWNED OF CLASS
Loeb Holding Corporation
As Escrow Agent (1)
61 Broadway
New York, NY 10006 1,242,183 37.86%
Warren D. Bagatelle (2)
Loeb Partners Corporation
61 Broadway
New York, NY 10006 1,271,155 38.75%
Joseph Cutrona (5)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 611,133 18.63%
Mark A. Kenny (5)
10 Lisa Drive
Chatham, NJ 07928 646,133 19.70%
John H. Wasko (3) (4)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083 176,206 5.37%
All Officers and Directors
as a group (4 persons) 2,704,627 82.44%
</TABLE>
(1) Includes 842,183 shares of Common Stock purchased by Loeb Holding
Corporation, as escrow agent for Warren D. Bagatelle, Managing Director of Loeb
Partners Corp., HSB Capital (of which Warren Bagatelle is a partner), trusts for
the benefit of families of two principals of Loeb Holding Corporation and three
unaffiliated persons and 400,00 shares of Common Stock issuable upon conversion
of two Convertible Notes aggregating $37,500. Loeb Holding Corporation disclaims
any beneficial interest in these shares.
(2) Includes 842,183 shares of Common Stock purchased by Loeb Holding
Corporation, as escrow agent for Warren D. Bagatelle, Managing Director of Loeb
Partners Corp., HSB Capital (of which Warren Bagatelle is a partner), trusts for
the benefit of families of two principals of Loeb Holding Corporation and three
unaffiliated individuals; 6,739 shares of Common Stock owned directly by Warren
D. Bagatelle; 2,233 shares of Common Stock owned directly by HSB Capital; 20,000
shares of Common Stock pledged by Joseph Cutrona to Warren Bagatelle as security
and 400,000 shares of Common Stock issuable upon conversion of two Convertible
Notes aggregating $37,500.
(3) Includes 29,383 shares of Common Stock owned of record by Joan E.
Wasko, John Wasko's wife, of which Mr. Wasko disclaims beneficial ownership, but
of which he may be deemed beneficial owner.
(4) Includes a five (5) year option to purchase 25,000 shares of Common
Stock at a price of $0.60 per share granted to Mr. Wasko by the Company on
August 11, 1995, a five (5) year option to purchase 35,000 shares of the
Company's Common Stock at a price of $2.00 per share granted to Mr. Wasko by the
Company on November 1, 1996 and 5,333 shares of Common Stock issuable upon
conversion of two
11
<PAGE>
Convertible Notes aggregating $37,500.
(5) Does not give effect to 14,533 shares of Common Stock to be
transferred to Prosoft, Inc. Upon completion of the Genisys Payment System.
Messrs. Cutrona and Kenny may be deemed to be "parents" and "promoters" of the
Company, as those terms are defined in the rules and regulations of the
Securities Act of 1933, as amended. In August 1994 and February 1995, Messrs.
Cutrona and Kenny each received their Common Stock in the Company for services
to be provided to the Company. For accounting purposes the value of these shares
was recorded at $7,840 for each individual. Mr. Pollan received his Common Stock
in August 1994 for services to have been provided to the Company. See "Certain
Transactions."
Item 12. Certain Relationships and Related Transactions
In August 1994, Joseph Cutrona and Mark A. Kenny each received a total
of 666,433 shares of the Company's common stock for services to be provided to
the Company.
During February 1995, the Company issued 45,765 shares of its Common
Stock in repayment of certain liabilities totaling $251,702. Those liabilities
include notes payable to Saddle Brook Investors of $149,633, note payable plus
accrued interest to an officer and Director of $34,273 and certain accounts
payable of $67,796.
In February 1995, Loeb Holding Corporation, as escrow agent ("Loeb"),
for Warren D. Bagatelle, HSB Capital, trusts for the benefit of families of two
principals of Loeb Holding Corporation and three unaffiliated individuals,
agreed to loan the Company $500,000 evidenced by a series of Convertible
Promissory Notes. In September 1995, Loeb converted the Convertible Promissory
Notes into 841,455 common shares of the Company and two Term Promissory Notes,
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 Term Promissory Note is to be
repaid in twelve equal quarterly payments commencing September 1997. Prepayments
may be made at any time without penalty. Interest is accrued at a rate of 9% per
annum and interest payments are to be made quarterly at the end of each of each
calendar quarter, or at such earlier date that the Term Promissory Note becomes
due and payable as a result of acceleration, prepayment or as otherwise provided
therein. Interest began to run from the date that the monies were advanced to
the Company.
The Term Promissory Note in the amount of $25,000 and an additional
Note in the amount of $12,500 issued in December 1995 and discussed below have
been modified. Such Notes provide for accrued interest at the rate of 9% per
annum payable quarterly commencing September 1997 and unless previously
converted the principal amount of each note is to be repaid in twelve equal
quarterly installments, commencing April 1, 1998, or on such earlier date as
such notes provide. The notes are convertible at the sole option of the holder
into an aggregate of 400,000 common shares of the Company.
During March 1995, John H. Wasko, then President of the Company, upon
exercise of his option, acquired 70,520 shares of the Common Stock of the
Company at an exercise price of $0.02145 per share.
On March 3, 1995, the Company and JEC signed a purchase agreement
whereby JEC acquired all of the assets, rights and properties relating to the
Company's CO2 laser research and development agreement with LCL, subject to
certain liabilities, in full consideration for the forgiveness of the
indebtedness of the Company to JEC in the amount of $345,593 owed as of February
28, 1995.
On August 11, 1995, Robotic Lasers acquired Corporate Travel Link,
Inc. by issuing 1,682,924 shares
12
<PAGE>
of restricted New Common Stock of the Company in exchange for the shares of the
common stock of Corporate Travel Link owned by Joseph Cutrona, Mark A. Kenny and
Steven E. Pollan which represented all the authorized, issued and outstanding
shares of common stock of Corporate Travel Link.
In August 1995, the Company granted Mr. Wasko a five (5) year option to
purchase 25,000 shares of Common stock at a price of $0.60 per share and in
November 1996, granted Mr. Wasko a five (5) year option to purchase 35,000
shares of Common Stock at a price of $2.00 per share.
On September 5, 1995, the Company entered into a three year consulting
and investment banking agreement with Loeb Partners Corporation. Under the terms
of the agreement, the Company pays Loeb Partners Corporation $3,000 per month.
Loeb Partners Corporation will also receive a fee for arranging private
financing and acquisitions. Mr. Warren D. Bagatelle, a Director and Chairman of
the Company, is a Managing Director of Loeb Partners Corporation.
During December 1995, Loeb agreed to loan the Company $250,000
evidenced by a series of Convertible Promissory Notes ("Convertible Promissory
Notes"). In November 1996, Loeb converted the Convertible Promissory Notes into
(I) two Term Promissory Notes, one in the principal amount of $237,500 and the
other in the principal amount of $12,500 issued in December 1995 and discussed
below and (ii) 420,728 shares of Common Stock of the Company, of which 420,000
shares of Common Stock are owned by four unaffiliated parties. Loeb Holding
Corporation did not receive any shares of Common Stock in this transaction.
The principal amount of the $237,500 Term Promissory Note is to be
repaid in twelve equal quarterly payments commencing December 1997. Prepayments
may be made at any time without penalty. Interest is accrued at a rate of 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 Term Promissory Note becomes due and
payable as a result of acceleration, prepayment or as otherwise provided
therein. Interest began to run from the date that the monies were advanced to
the Company.
In August 1996, the Company gave notice to Mr. Pollan that it was
canceling the 333,216 shares of Common Stock which had been issued to him for
services to be provided by the Company. The reason for such cancellation related
to various claims made by the Company against Mr. Pollan that he failed to
provide services to the Company. Mr. Pollan has informed the Company that he
intends to legally contest any attempt by the Company to cancel his shares.
During the quarters ended September 30, 1996, and December 31, 1996, in
order to raise additional working capital for the Company, Joseph Cutrona,
President of the Company, sold a total of 37,600 shares of restricted common
stock of the Company owned by him, to nineteen unaffiliated third parties at
prices ranging from $2.00 to $2.50 per share for total proceeds of $76,500 which
Mr. Cutrona remitted to the Company in the form of a capital contribution. In
February 1997, Mr. Cutrona sold an additional 9,850 shares of restricted Common
Stock to 7 unaffiliated third parties at a price of $2.00 per share for total
proceeds of $19,700, which Mr. Cutrona remitted to the Company in the form of an
additional capital contribution. Mr. Mark A. Kenny has agreed to use 23,725 of
his own shares of restricted common stock of the Company to reimburse Mr.
Cutrona for one-half of the number of shares recently sold by Mr. Cutrona. The
Company has agreed to issue an equal number of new shares of restricted Common
Stock to Messrs. Cutrona and Kenny in six equal installments if the Company
meets certain performance criteria on six specified dates.
On October 10, 1996, the Company, Joseph Cutrona, President of the
Company, Mark A. Kenny and Prosoft, Inc. Signed an agreement whereby Mr. Cutrona
and Mr. Kenny each agreed to transfer 14,533 shares of restricted Common Stock
owned by them to Prosoft, Inc., or its designees, upon completion of the design
and satisfactory development of the Genisys Payment System. Prosoft agreed to
accept the 29,066 shares valued at $3.75 per share in satisfaction of
$108,997.50 which would be owned to Prosoft, Inc. by the Company upon completion
of the Genisys Payment System.
13
<PAGE>
In October and November 1996, and February 1997, Joseph Cutrona, in
recognition of extensive valuable services rendered to the Company by three
employees of the Company, made gifts aggregating 35,000 shares of restricted
Common Stock owned by him to the three employees, including a gift of 20,000
shares of restricted Common Stock to John H. Wasko.
During November and December 1996, the Company and Loeb Holding
Corporation signed four eighteen (18) month Promissory Notes whereby Loeb
Holding Corporation loaned the Company the sums of $75,000, $30,000, $10,000 and
$95,000 (totaling $210,000). The Promissory Notes which bear interest at 10%,
mature on May 11, 1998, May 25, 1998, June 2, 1998, and June 9, 1998.
The Company believes that each of these transactions was entered into
on terms at least a favorable to the Company as could have been obtained from
unaffiliated third parties.
Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-k
(a) (1) Financial Statements
Included in Part II of this report:
Balance Sheets - December 31, 1996 and 1995.
Statements of Operations During the Development Stage - For
the Period from Inception through December 31, 1996 and the
Years Ended December 31, 1996 and August 31, 1995, and for the
four months ended December 31, 1995.
Statements of Cash Flows - For the Period from Inception
through December 31, 1996 and for the Years Ended December 31,
1996 and August 31, 1995, and for the four months ended
December 31, 1995.
Statement of Changes in Stockholders' Equity - For the Years
Ended December 31, 1996 and August 31, 1995, and for the four
months ended December 31, 1995.
Notes to Financial Statements
(2) Financial Statements Schedules
There are no schedules which are applicable or required to be
filed for the three years ended December 31, 1996 and 1995 and
August 31, 1995 and for the four months ended December 31,
1995.
(3) Exhibits
3.1 Registrant's Articles of Incorporation
3.2 Registrant's By-Laws
4.1 Form of Common Stock Certificate
4.2 Redeemable Warrant Agreement with Form of Class A and
Class B Warrant
10.1 Employment Agreement dated October 17, 1996 between
Registrant and Joseph Cutrona.
10.2 Consulting Agreement dated October 18, 1996 between the
Registrant and Mark A. Kenny.
10.3 Employment Agreeement dated October 17, 1996 between
Registrant and John Wasko.
10.4 Copy of lease dated November 1, 1995 between Unicom and
Corporate Travel Link, Inc.
10.5 Copy of Agreement dated June 22, 1995 between American
Airlines, Inc., and Corporate Travel Link, Inc.,
relating to Sabre Extension Program - Associate
Distribution and Services Agreement.
14
<PAGE>
10.6 Copy of Agreement dated June 30, 1995 between American
Airlines, Inc. and Corporate Travel Link, Inc., relating to
Associate Sabre Equipment Lease Agreement.
10.7 Copy of Agreement dated June 30, 1995 between American
Airlines, Inc., and Corporate Travel Link, Inc.- non-standard
system amendment to Corporate Sabre Equipment Lease Agreement.
10.8 Copy of Script Consulting Agreement dated June 21, 1995
between Worldspan, LP and Corporate Travel Link, Inc.
10.9 Copy of Script Services agreement dated June 21, 1995 between
Worldspan, LP and Corporate Travel Link, Inc.
10.10 Copy of Galileo Services Display and Reservation Agreement
dated August 28, 1995 between Galileo International
Partnership and Corporate Travel Link, Inc.
10.11 Copy of Ancillary Services Agreement dated August 28, 1995
between Galileo International Partnership and Corporate Travel
Link, Inc.
10.12 Copy of Worldspan Car Rental Associate Reservation Agreement
between Worldspan, LP and Corporate Travel Link, Inc.
10.13 Copy of Interim Loan Agreement between the Registrant and Loeb
Holding Corporation and certain executives of the Registrant.
10.14 Prosoft Consulting Agreement
21 List of Subsidiaries
All of the above-referenced documents, with the exception of the Rule 424(b)
Prospectus, are incorporated herein by reference to the Exhibit bearing the same
number in the Registrant's Registration Statement on Form SB-2, File No.
333-15011.
(b) (1) Reports on Form 8-K
The following report relating to the fiscal year ended
December 31, 1996 was filed:
None
14
<PAGE>
SIGNATURES
Pursuant to requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this Annual Report and
any subsequent amendments thereto to be singed on its behalf by the undersigned,
thereunto duly authorized.
March 31, 1997
GENISYS RESERVATION SYSTEMS, INC.
(formerly Robotic Lasers, Inc.)
/s/ Joseph Cutrona
President and Chairman
Pursuant to the requirements of the Securities Act of 1934, this Report
has been signed below by the following persons in their respective capacities
with the Registrant and on the dates indicated.
/s/ John H. Wasko
John H. Wasko
Secretary, Treasurer and
Principal Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements for the year ended December 31, 1996, and
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 91
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 93
<PP&E> 235
<DEPRECIATION> 65
<TOTAL-ASSETS> 904
<CURRENT-LIABILITIES> 693
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,392)
<TOTAL-LIABILITY-AND-EQUITY> 904
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 917
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 134
<INCOME-PRETAX> (1,051)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,051)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,051)
<EPS-PRIMARY> (.35)
<EPS-DILUTED> (.35)
</TABLE>
