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 September 30, 1997)
Commission File Number 1-12689
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, Union, 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 September 30, 1997:
4,355,594 shares of Common Stock (as adjusted for stock split)
Transitional Small Business Disclosure Format (check one)
Yes No X
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
( A development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
DURING THE DEVELOPMENT STAGE
(unaudited)
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From Inception
Nine Months Nine Months Three Months Three Months March 7, 1994
Ended Ended Ended Ended Through
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996 Sept 30, 1997
REVENUES AND EXPENSES DURING
THE DEVELOPMENT STAGE
Net Revenue $ 2,225 $ -- $ 2,225 $ -- $ 2,225
Cost of Service 6,800 -- 6,800 -- 6,800
Gross Profit (4,575) -- (4,575) -- ( 4,575)
General and Administrative Expenses 927,670 619,308 454,432 196,880 2,285,366
Depreciation and Amortization 128,230 72,809 64,174 31,140 244,738
Interest Expense (Income), net 52,648 90,715 ( 2,102) 42,222 223,447
1,108,548 782,832 516,504 270,242 2,753,551
NET (LOSS) DURING
THE DEVELOPMENT STAGE ($1,113,123) ($ 782,832) ($521,079) ($ 270,242) (2,758,126)
NET (LOSS) PER COMMON SHARE ($ .28) ($ .28) ($.12) ($.10) ($1.06)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,042,041 2,828,625 4,355,594 2,834,866 2,610,301
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
A Development Stage Enterprise
CONSOLIDATED BALANCE SHEETS
September December
30, 1997 31, 1996
(unaudited) ( Note 1 )
ASSETS
CURRENT ASSETS
Cash and cash equivalents $2,641,569 $ 91,548
Prepaid Expenses 2,810 1,081
Total Current Assets 2,644,379 92,629
EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION OF $114,496
and $65,102 262,440 235,285
OTHER ASSETS
Computer software costs,
less accumulated amortization
of $95,381 and $35,215 545,228 312,171
Deferred offering costs -- 153,210
Debt issue costs, less
accumulated amortization
of $25,045 and $10,957 31,305 45,393
Deposits and Other 64,730 64,910
641,263 575,684
$3,548,082 $ 903,598
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 449,374 $ 161,282
Accounts payable and accrued expenses 101,257 304,490
Due to related parties 15,134 29,652
Accrued interest payable-related parties 146,350 95,748
Accrued consulting fees - related parties -- 101,500
Total current liabilities 712,115 692,672
LONG-TERM DEBT:
Long-term debt, less current maturities 659,807 1,009,757
10% Promissory notes payable --- 563,500
Convertible notes payable --- 30,000
659,807 1,603,257
Total Liabilities 1,371,922 2,295,929
COMMITMENTS:
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; 4,355,594 (1997)
and 3,280,594 (1996) Shares Issued
and Outstanding 436 328
Additional Paid in Capital 4,933,850 252,344
Deficit Accumulated During the
Developmental Stage ( 2,758,126) (1,645,003)
Total Stockholders' Equity
(Deficiency) 2,176,160 (1,392,331)
$ 3,548,082 $ 903,598
See Accompanying Notes to Financial Statements
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)
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Deficit
Accumulated
Additional During The
Common Stock Paid-In Development
Total Shares Par Value Capital Stage
BALANCES - DECEMBER 31, 1996 ($1,392,331) 3,280,594 $328 $ 252,344 ($1,645,003)
CONTRIBUTION TO CAPITAL BY
STOCKHOLDERS/OFFICER 128,700 128,700
PROCEEDS FROM PUBLIC OFFERING
OF COMMON STOCK AND
WARRANTS, LESS RELATED
COSTS OF $1,115,619 4,507,914 1,035,000 103 4,507,811
CONVERSION OF CONVERTIBLE
NOTES PAYABLE TO
COMMON STOCK 30,000 15,000 2 29,998
ISSUANCE OF COMMON STOCK
UPON EXERCISE OF OPTION 15,000 25,000 3 14,997
NET LOSS ( 1,113,123) --- --- --- ( 1,113,123)
BALANCES - SEPTEMBER 30, 1997 $2,176,160 4,355,594 $436 $4,933,850 ($2,758,126)
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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Period From
Development
Stage Activities)
Nine Months Ended Nine Months Ended Through
September30, September 30, September 30,
1997 1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ($1,113,123) ( $782,832) ($ 2,758,126)
Adjustment to Reconcile Net (Loss) to Net Cash
Flows from Operating Activities:
Depreciation and Amortization 128,230 72,809 244,738
Contribution of services rendered to capital -- -- 49,600
Changes in operating assets and liabilities:
Prepaid expenses ( 1,729) ( 15,419) ( 2,810)
Other Assets -- ( 1,979) ( 65,564)
Accounts Payable and Accrued Expenses (256,069) 278,173 242,942
NET CASH FLOWS FROM
OPERATING ACTIVITIES ( 1,242,691 ) ( 449,248) ( 2,289,220)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment and Software ( 333,232) ( 332,691) ( 981,005)
Acquisition of Prosoft, Inc. ( 34,602) -- ( 34,602)
NET CASH FLOWS FROM INVESTING ACTIVITIES ( 367,834) ( 332,691) ( 1,015,607)
CASH FLOWS FROM FINANCING ACTIVITIES
Loans and advances from related parties ( 14,518) 79,081 15,134
Proceeds from Issuance of Notes Payable 70,000 100,000 1,025,000
Payments under Notes Payable ( 65,000) -- ( 65,000)
Payments under Computer Equipment Leases ( 71,260) ( 33,322) ( 134,196)
Proceeds from sale and lease-back -- 25,117 294,644
Proceeds from Issuance of Convertible Notes -- 30,000 30,000
Gross Proceeds from public offering of
Common Stock and Warrants 5,623,533 -- 5,623,533
Proceeds from issuance of Common Stock
upon exercise of option 15,000 60,000 125,000
Contribution to capital - stockholder/officer 128,700 -- 205,400
Proceeds from (repayment of )
10% Promissory Notes and Related Warrants ( 563,500) 575,000 --
Costs paid upon issuance of Promissory
Notes and Related Warrants -- -- ( 57,500)
Deferred offering costs ( 962,409) -- ( 1,115,619)
NET CASH FLOWS FROM
FINANCING ACTIVITIES 4,160,546 835,876 5,946,396
NET CHANGE IN CASH 2,550,021 53,937 2,641,569
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 91,548 22,613 --
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 2,641,569 $ 76,550 $2,641,569
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 65,699 $ 24,170 $ 111,375
Net liabilities assumed
in reverse acquisition $ -- $ -- $ 14,087
Conversion of notes payable into common stock $ 30,000 $ -- $ 50,109
See Accompanying Notes to Financial Statements
</TABLE>
<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 December 31, 1996, 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 a development stage Company and has developed a computerized
limousine reservation and payment system for the business traveler. The Company
anticipates that the proprietary software will enable a system of limousine
reservations to be completely computerized and operate without human
intervention except for initial inputing of travel information.
The Company commenced generating revenues in August 1997. The Company has been
unprofitable since inception and expects to incur additional operating losses
for the next several quarters.
Note 3 Stockholders' Equity
Cancellation of Shares --- In August 1996, the Company gave notice to one of its
former officers, Mr. Steven E. Pollan, that it was canceling the 333,216 shares
of Common Stock issued to him at the inception of Corporate Travel Link, Inc.
for services he was to have provided. The Company believes that Mr. Pollan never
provided such services. (See Note 4 for information concerning litigation
commenced by Mr. Pollan). Pending return of the shares, they are considered
outstanding for all periods presented herein.
Public Offering of Securities --- 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 Class A
Redeemable Warrant and 1,035,000 Class B Redeemable Warrants at $.10 per Class B
Redeemable Warrant. Total proceeds from the public offering, net of related
costs of $1,115,619, were $4,507,914.
Each redeemable warrant is exercisable for a period of 48 months, commencing
September 20, 1997 and entitles the holder to acquire one share of common stock
at $5.75 (Class A) or $6.75 (Class B) per share. Commencing March 20, 1998, the
Company will have the right at any time to redeem all, but not less than all, of
the Class A or Class B warrants at a price equal to $.20 per Class A warrant and
$.10 per Class B warrant, provided that the closing bid price of the common
stock equals or exceeds $6.25 (Class A) or $7.25 (Class B) per share for any
twenty trading days within a period of thirty consecutive trading days ending on
the fifth trading day prior to the date of the notice of redemption.
<PAGE>
Note 4 Contingencies
On February 20, 1997, two individuals filed an action against the Company,
Corporate Travel Link and Robotic Lasers in the Superior Court of New Jersey
seeking, among other things damages in the amount of 8% of any financing
secured by Corporate Travel Link and 5% of the Company's Common Stock allegedly
due for services rendered in connection with the Company's acquisition of
Corporate Travel Link in 1995. The claim for monetary damages is based upon
an alleged written agreement between Corporate Travel Link and plaintiffs,
while the claim for the shares of the Company's Common Stock is based upon
alleged oral representations and promises made by officers of Corporate Travel
Link. The Company believes that the plaintiff's claims are without merit and
intends to vigorously defend the action and to assert numerous defenses in its
answer.
On April 17, 1997, a former officer of the Company filed an action in the United
States District Court, District of New Jersey, against the Company, Corporate
Travel Link, the officers of both companies, and various related parties seeking
among other things a declaratory judgment that the former officer is the owner
of the 333,216 shares of Common Stock of the Company which had been issued to
him at the inception of Corporate Travel Link for services he was to have
provided (see Note 3) and for unspecified compensatory and punitive damages. The
Company believes that the plaintiff's claims are without merit and intends to
vigorously defend the action and to assert numerous defenses and counterclaims
in its answer.
Note 5 Acquisition
On June 20, 1997, the Company acquired 80% of the outstanding common stock of
Prosoft, Inc. for an aggregate purchase price of $34,602. This transaction has
been accounted for as a purchase and is included in the Company's consolidated
financial statements as of the date of acquisition. The assets acquired consist
principally of cash and equipment.
In addition, the Company granted to each of the two minority owners of Prosoft,
Inc., non-incentive stock options to purchase 50,000 shares of common stock. The
options which expire five years from the date of grant are immediately
exercisable at an exercise price of $8.625.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company has been in the development stage, and just commenced generating
revenues in August 1997. The Company has been unprofitable since inception and
expects to incur additional operational losses. As reflected in the accompanying
financial statements, the Company has incurred losses totaling $2,758,126 since
inception and at September 30, 1997, had working capital of $1,932,264.
General and administrative expenses were $927,670 for the nine months ended
September 30, 1997, as compared to $619,308 during the nine months ended
September 30, 1996. Cost increases during the 1997 period consist of consulting
fees ($38,300), payroll and payroll related costs ($185,000), insurance costs
($14,800), professional fees ($35,300), travel costs ($8,600), and other
administrative costs ($26,400). General and administrative expenses
were $454,432 for the three months ended September 30, 1997, as compared to
$196,880 during the three months ended September 30, 1996. Cost increases during
the 1997 period consist of payroll and payroll related costs ($158,200),
consulting fees ($12,400), professional fees ($52,900), travel costs ($18,000),
insurance costs ($5,800) and other administrative ($10,200).
The increases in professional fees for the nine months and three months ended
September 30, 1997 are due primarily to legal fees incurred in regard to the
litigation described in Note 4 and in the preparation of a post-effective
amendment filed with the SEC by the Company on Form S-3. The remaining increases
are mostly related to the Company's increased marketing and sales efforts now
that the Genisys Reservation and Payment System is on-line.
<PAGE>
Liquidity and Capital Resources
The Company's funds have principally been provided from its public offering,
loans from Loeb Holding Corp. as escrow agent, Loeb Holding Corp., and LTI
Ventures Leasing Corporation, and a private offering.
In February 1997, in order to raise additional working capital for the Company,
Joseph Cutrona, former President of the Company, sold a total of 9,850 shares of
restricted Common Stock owned by him to six (6) unaffiliated third parties at a
price of $2.00 per share for the total proceeds of $19,700, which Mr. Cutrona
remitted to the Company in the form of a capital contribution. Mr. Mark A. Kenny
used 4925 of his own shares of restricted Common Stock to reimburse Mr. Cutrona
for one-half of the number of shares sold by Mr. Cutrona.
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 of 10% per annum payable at maturity. These notes which
were 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, were repaid on March
31, 1997.
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 $0.20 per Class A Redeemable Warrant and
1,035,000 Class B Redeemable Warrants at $.10 per Class B Redeemable Warrant
resulting in net proceeds to the Company of $4,507,914.
On May 29, 1997, an officer of the Company exercised stock options for 25,000
shares of common stock at $.60 per share, resulting in total proceeds of
$15,000.
On June 20, 1997, the Company acquired 80% of the outstanding common stock of
Prosoft, Inc. for an aggregate purchase price of $34,602. See Note 5 to
financial statements. On July 28, 1997, pursuant to an agreement dated October
10, 1996, Joseph Cutrona and Mark Kenny each contributed 14,533 shares owned by
them of the Company's common stock, valued at $109,000 to Prosoft in payment for
computer software design and other consulting services provided to the Company
by Prosoft.
At September 30, 1997, the Company had cash of $2,641,569 and working capital of
$1,932,264. Management of the Company estimates that it has sufficient resources
to provide for its planned operations of the next twelve months.
<PAGE>
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
NONE
<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 13, 1997
/s/ Lawrence E. Burk
President and Chief Executive Officer
/s/ John H. Wasko
Secretary, Treasurer and
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements for the nine months ended September 30, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,642
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,664
<PP&E> 377
<DEPRECIATION> 115
<TOTAL-ASSETS> 3,548
<CURRENT-LIABILITIES> 712
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,176
<TOTAL-LIABILITY-AND-EQUITY> 3,548
<SALES> 2
<TOTAL-REVENUES> 2
<CGS> 7
<TOTAL-COSTS> 7
<OTHER-EXPENSES> 1,055
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53
<INCOME-PRETAX> (1,113)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,113)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,113)
<EPS-PRIMARY> (.28)
<EPS-DILUTED> 0
</TABLE>
