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, 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 June 30, 1997: 4,355,594
shares of Common Stock (as adjusted for stock split)
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
June December
30, 1997 31, 1996
(unaudited) ( Note 1 )
ASSETS
CURRENT ASSETS
Cash and cash equivalents $3,184,512 $ 91,548
Prepaid Expenses 28,466 1,081
Total Current Assets 3,212,978 92,629
EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION OF $95,649 and $65,102 253,725 235,285
OTHER ASSETS
Computer software costs, less accumulated
amortization of $56,281 and $35,215 460,308 312,171
Deferred offering costs -- 153,210
Debt issue costs, less accumulated amortization
of $20,349 and $10,957 36,001 45,393
Deposits and Other 64,790 64,910
561,099 575,684
$4,027,802 $ 903,598
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 453,451 $ 161,282
Accounts payable and accrued expenses 149,953 304,490
Due to related parties 20,152 29,652
Accrued interest payable - related parties 129,460 95,748
Accrued consulting fees - related parties -- 101,500
Total current liabilities 753,016 692,672
LONG-TERM DEBT:
Long-term debt, less current maturities 686,547 1,009,757
10% Promissory notes payable --- 563,500
Convertible notes payable --- 30,000
686,547 1,603,257
Total Liabilities 1,439,563 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 4,824,850 252,344
Deficit Accumulated During the Developmental Stage ( 2,237,047) (1,645,003)
Total Stockholders' Equity (Deficiency) 2,588,239 (1,392,331)
$ 4,027,802 $ 903,598
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
Six Months Six Months Three Months Three Months March 7, 1994
Ended Ended Ended Ended Through
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996 June 30, 1997
REVENUES AND EXPENSES DURING
THE DEVELOPMENT STAGE
Revenue $ -- $ -- $ -- $ -- $ --
Expenses -
General and Administrative 473,238 422,428 258,221 243,569 1,830,934
Depreciation and Amortization 64,056 41,669 32,184 23,007 180,564
Interest Expense, net 54,750 48,493 7,932 26,345 225,549
592,044 512,590 298,337 292,921 2,237,047
NET (LOSS) DURING
THE DEVELOPMENT STAGE ($592,044) ($ 512,590) ($298,337) ($ 292,921) (2,237,047)
NET (LOSS) PER COMMON SHARE ($ .15) ($ .18) ($.07 ) ($.10) ($.9 )
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,882,666 2,825,455 4,330,660 2,834,850 2,477,711
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 CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)
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
STOCKHOLDER/OFFICER 19,700 19,700
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
PROCEEDS FROM EXERCISE
OF OPTIONS 15,000 25,000 3 14,997
NET LOSS ( 592,044) --- --- --- ( 592,044)
BALANCES -MARCH 31, 1997 $2,588,239 4,355,594 $436 $4,824,850 ($2,237,047)
See Accompanying Notes to Financial Statements
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARY
(formerly Robotic Lasers, Inc.)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Period From
(Commencement of
Development
Stage Activities)
Six Months Ended Six Months Ended Through
June 30, June 30, June 30,
1997 1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ($ 592,044) ( $512,590) ($2,237,047)
Adjustment to Reconcile Net (Loss) to Net Cash
Flows from Operating Activities:
Depreciation and Amortization 64,056 41,669 180,564
Contribution of services rendered to capital 49,600
Changes in operating assets and liabilities:
Prepaid expenses ( 26,575) 180 ( 27,657)
Other Assets -- ( 1,979) ( 65,564)
Accounts Payable and Accrued Expenses ( 225,077) 200,104 273,938
NET CASH FLOWS FROM
OPERATING ACTIVITIES ( 779,637 ) ( 272,616) ( 1,826,166)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Equipment and Software ( 181,648) ( 158,831) ( 829,422)
Acquisition of Prosoft, Inc. ( 34,602) ( -- ) ( 34,602)
NET CASH FLOWS FROM INVESTING ACTIVITIES ( 216,251) ( 158,831) ( 864,024)
CASH FLOWS FROM FINANCING ACTIVITIES
Loans and advances from related parties ( 9,500) 31,897 20,152
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 ( 38,972) ( 16,252) ( 101,908)
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 sale of Common Stock 15,000 60,000 125,000
Contribution to capital - stockholder/officer 19,700 -- 96,400
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 4,088,852 805,762 5,874,702
NET CHANGE IN CASH 3,092,964 374,315 3,184,512
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 91,548 22,613 --
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 3,184,512 $ 396,928 $3,184,512
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 60,463 $ 13,084 $ 106,139
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
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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 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 is developing a computerized
limousine reservation and payment system for the business traveler. The Company
anticipates that the proprietary software being developed 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 has generated no revenues and has no commercial operations to
date. The Company has been unprofitable since inception and expects to incur
additional operating losses. The Company expects to report revenue from
operations during the 2nd half of the fiscal year ending December 31, 1997.
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.
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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 claim 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.
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 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 operational losses. The Company
expects to report revenue from operations during the 2nd half of the fiscal year
ending December 31, 1997. As reflected in the accompanying financial statements,
the Company has incurred losses totaling $2,237,047 since inception and at June
30, 1997, had working capital of $2,459,962.
Selling, general and administrative expenses were $473,238 for the six
months ended June 30, 1997, as compared to $422,428 during the six months ended
June 30, 1996. Professional fees and travel costs decreased approximately
$17,600 and $9,400 during 1997. Cost increases during the 1997 period consist of
consulting fees ($25,900), payroll and payroll related costs ($26,900),
insurance costs ($9,000), and other administrative costs ($16,000). Selling,
general and administrative expenses were $258,221 for the three months ended
June 30, 1997, as compared to $243,569 during the three months ended June 30,
1996. Payroll and payroll related costs and consulting fees increased
approximated $42,200 and $15,300 during 1997. Cost decreases during the 1997
period consist of professional fees ($31,500), travel costs ($4,300), insurance
costs ($1,300) and other administrative ($5,800).
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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 September 1995, Loeb Holding Corp. as escrow 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.
In September 1995, January 1996 and December 1996, the Company entered into
sale and lease-back arrangements with LTI Ventures Leasing Corporation (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 $295,000 and agreed to lease back the hardware and software for initial
terms of 24 to 30 months at a monthly rental totaling $11,960.
During November and December 1996, the Company and Loeb Holding Corporation
signed four 18 month Promissory Notes whereby Loeb Holding Corporation loaned
the Company a total of $210,000. Such Notes bear interest at 10% and mature in
May and June 1998.
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.
At June 30, 1997, the Company had cash of $3,184,512 and working capital of
$2,459,962. Management of the Company estimates that it has sufficient resources
to provide for its planned operations of the next twelve months.
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PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
NONE
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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: August 14, 1997 /s/Lawrence E. Burk
Lawrence E. Burk
President and Chief Executive Officer
Date: August 14, 1997 /s/John H. Wasko
John H. Wasko
Secretary, Treasurer and
Chief Financial Officer
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This schedule contains summary financial information extracted from the
Company's financial statements for the three months ended June 30, 1997 and is
qualified in its entirety by reference to such financial statements.
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TEXT
ARTICLE 5
MULTIPLIER 1,000
TABLE
S
PERIOD TYPE 6 MONTHS
FISCAL YEAR END Dec 31, 1997
PERIOD-START Jan 01, 1997
PERIOD-END June 30, 1997
CASH 3,185
SECURITIES 0
RECEIVABLES 0
ALLOWANCES 0
INVENTORY 0
CURRENT ASSETS 3,213
PP&E 349
DEPRECIATION 96
TOTAL ASSETS 4,028
CURRENT LIABILITIES 753
BONDS 0
PREFERRED MANDATORY 0
PREFERRED 0
COMMON 0
OTHER-SE 2,588
TOTAL LIABILITY AND EQUITY 4,028
SALES 0
TOTAL REVENUES 0
CGS 0
TOTAL COSTS 0
OTHER EXPENSES 537
LOSS PROVISION 0
INTEREST EXPENSE 55
INCOME PRETAX ( 592)
INCOME TAX 0
INCOME CONTINUING ( 592)
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET INCOME ( 592)
EPS PRIMARY ( . 15)
EPS DILUTED
TABLE
TEXT
DOCUMENT
SUBMISSION
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