1
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 March 31, 1998)
Commission File Number 1-12689
Genisys Reservation Systems, Inc. And
Subsidiaries
(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 March 31, 1998: 4,735,594
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 SUBSIDIARIES
Development Stage Companies
CONSOLIDATED BALANCE SHEETS
March December
31, 1998 31, 1997
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,634,396 $2,207,841
Accounts receivable 9,779 8,784
Prepaid Expenses 19,097 5,127
----------- -----------
Total Current Assets 1,663,272 2,221,752
EQUIPMENT, NET OF ACCUMULATED
DEPRECIATION 257,073 261,643
OTHER ASSETS
Computer software costs, less accumulated
amortization 587,725 581,193
Debt issue costs, less accumulated amortization 21,913 26,609
Deposits and Other 61,609 61,669
-------- --------
671,247 669,471
----------- ------------
$2,591,592 $ 3,152,866
=========== ============
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 109,843 $ 114,957
Accounts payable and accrued expenses 151,627 189,712
Accrued interest payable - related parties 174,533 163,296
Accrued consulting fees - related parties 3,000 3,000
------------- -----------
Total current liabilities 439,003 470,965
LONG-TERM DEBT:
Long-term debt, less current maturities 126,894 982,742
------------ -----------
Total Liabilities 565,897 1,453,707
------------- ----------
COMMITMENTS:
STOCKHOLDERS EQUITY (DEFICIENCY):
Preferred Stock, $.0001 Par Value: 25,000,000
Shares Authorized; Series A Preferred Stock, 706,000
Shares authorized; 381,177 Issued and Outstanding 38
Common Stock, $.0001 Par Value; 75,000,000
Shares Authorized; 4,755,594
Shares Issued and Outstanding 476 436
Additional Paid in Capital 5,781,273 4,933,851
Deficit Accumulated During the Developmental Stage (3,756,092) (3,235,128)
----------- -----------
Total Stockholders Equity 2,025,695 1,699,159
----------- -----------
$2,591,592 $ 3,152,866
========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
DEVELOPMENT STAGE COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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Period From
March 7, 1994
(Commencement of
Three Months Ended Development Stage
March 31 March 31 Activities ) to
1998 1997 March 31, 1998
SERVICE REVENUE $ 14,821 $ -- $ 40,684
------------ -------------- ---------------
EXPENSES:
Cost of Service 19,665 --- 44,657
General and Administrative 412,761 215,017 3,088,660
Depreciation and Amortization 96,032 31,872 429,926
Interest Expense, net 7,327 46,818 228,571
--------- -------- ----------
535,785 293,707 3,791,814
---------- ----------- ------------
NET (LOSS) INCURRED DURING
THE DEVELOPMENT STAGE ($520,964) ($293,707) ($3,751,130)
============= ============ ============
BASIC AND DILUTED LOSS PER ($ .12 ) ($ .09 ) ($ 1.33 )
COMMON SHARE ============= ============== =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,378,927 3,420,594 2,825,616
============= =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
DEVELOPMENT STAGE COMPANIES
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS EQUITY
(Unaudited)
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Deficit
Accumulated
Additional During the
Common Stock Series A Preferred Stock Paid-In Development
Shares Par Value Shares Par Value Capital Stage Total
BALANCE - DECEMBER 31, 1997 4,355,594 $436 --- --- $4,933,851 ($3,235,128) $1,699,159
CONVERSION OF LONG-TERM
DEBT INTO SERIES A PREFERRED
STOCK AT $2.125 PER SHARE --- --- 381,177 $38 809,962 --- 810,000
CONVERSION OF NOTES PAYABLE
INTO COMMON STOCK AT
$0.09375 PER SHARE 400,000 40 --- --- 37,460 --- 37,500
NET LOSS --- --- --- --- ------ (520,964) (520,964)
------------ ------- ----------- ---------- ------------- ---------- -----------
BALANCE AT MARCH 31, 1998 4,735,594 $476 381,177 $38 $5,781,273 ($3,756,092) $2,025,695
========= ==== ======= ==== ========== ============ ==========
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See Accompanying Notes to Financial Statements
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GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
Development Stage Companies
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period From
March 7, 1994
(Commencement of
Development Stage
Three Months Ended Three Months Ended Activities to
March 31,1998 March 31,1997 March 31, 1998
------------------- -------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(520,964) $ (293,707) $(3,756,092)
Adjustments to reconcile net loss to net
cash flows from operating activities
Depreciation and amoritization 96,032 31,872 429,926
Contribution to capital of services rendered 0 0 49,600
Changes in operating assets and liabilities:
Accounts receivable (995) 0 (9,779)
Prepaid expenses (13,970) (154) (19,337)
Deposits and other 0 0 (62,323)
Accounts payable and accrued expenses (26,848) 351,736 313,134
------------------- -------------------- -------------------
Net cash flows from operating acctivities (466,745) 89,747 (3,054,871)
------------------- -------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and software (93,238) (37,039) (1,198,212)
Acquisition of Prosoft, Inc. 0 0 (34,602)
------------------- -------------------- -------------------
Net cash flows from investing activities (93,238) (37,039) (1,232,814)
------------------- -------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 9,093 0 14,093
Payments on long-term debt (847,500) (65,000) (925,840)
Proceeds from public offering of common stock
and warrants net of deffered offering costs 0 4,512,291 4,507,915
Conversion of convertible notes payable
to common stock 37,500 0 67,500
Conversion of long-term debt to Series A
Preferred Stock 810,000 0 810,000
Issuance of common stock upon exercise of option 0 0 15,000
Loans and advances from related parties 0 6,500 0
Proceeds from issuance of notes payable 0 70,000 955,000
Payments under computer equipment leases (22,555) (9,195) (85,631)
Proceeds from sale and lease-back 0 0 294,644
Proceeds on Payments of convertible notes 0 0 0
Proceeds from sale of common stock 0 0 110,000
Contribution to capital - stockholder/officer 0 19,700 205,400
Proceeds from issuance of 10% promissory notes 0
and related warrants, less related costs 0 0 517,500
Payments on 10% promissory notes and related 0
warrants 0 0 (563,500)
------------------- ------------------- -----------------
Net cash flows from financing activities (13,462) 4,534,296 5,922,081
------------------- -------------------- -------------------
NET CHANGE IN CASH AND EQUIVALENTS (573,445) 4,587,004 1,634,396
CASH AND EQUIVALENTS, BEGINNING OF YEAR 2,207,841 91,548 0
------------------- -------------------- -------------------
CASH AND EQUIVALENTS, END OF PERIOD $ 1,634,396 $ 4,678,552 $ 1,634,398
------------------- -------------------- -------------------
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 13,506 $ 537 $ 154,004
------------------- -------------------- -------------------
Net liabilities assumed in reverse acquisition $ - $ - $ 14,087
------------------- -------------------- -------------------
Conversion of related party debt to common stock $ - $ - $ 20,109
------------------- -------------------- -------------------
Conversion of long-term debt to Series A Preferred
Stock $ 847,500 $ - $ 847,500
------------------- -------------------- -------------------
Conversion of notes payable to common stock $ 37,500 $ - $ 37,500
------------------- -------------------- -------------------
See Accompanying Notes to Financial Statements
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<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
DEVELOPMENT STAGE COMPANIES
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
Although planned principal operations have commenced, revenues
to date have not been significant; accordingly, the Company and its subsidiaries
continue to be in the development stage. The Company 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 the initial inputting of travel information.
Note 3 Stockholders Equity
Preferred Stock - The Company's Certificate of Incorporation authorizes the
issuance of up to 25,000,000 shares of Preferred Stock. On March 10, 1998, the
Board of Directors designated 706,000 shares of Series A Preferred Stock which
are convertible, in whole or in part, into fully paid and nonassessable Common
Shares on a one-for-one basis at the option of the respective holders thereof.
Holders of Series A Preferred Stock are entitled to receive dividends on a pari
passu basis with the holders of the Company's Common Stock. The Company, at its
sole option, has the right to redeem all or, from time to time, any number of
the then outstanding shares of Series A Preferred Stock at a redemption price of
$2.125 per share plus a 10% per year increase in the redemption rate.
In March 1998, the holder of two Term Promissory Convertible
Notes in the principal amounts of $475,000 and $237,500 converted $400,000 of
the principal amount of the former note and $200,000 of the principal amount of
the latter note into 188,235 shares and 94,118 shares respectively of the Series
A Preferred Stock of the Company at a price of $2.125 per share.
In March 1998, the holder of four eighteen month Convertible
Promissory Notes aggregating $210,000, converted the total principal amount of
the four notes ($210,000) into 98,824 shares of the Series A Preferred Stock of
the Company at a price of $2.125 per share.
<PAGE>
Note 4 Contingencies
On February 20, 1997, two individuals filed an action against
the Company and Corporate Travel Link ("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
monetary damages is based upon an alleged written agreement between 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 a former officer of
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 March 4, 1998, Travel Link filed an application with the Court to
assert a claim for indemnification against Joseph Cutrona and Steven Pollan, two
former directors and officers of Travel Link and the Company and, Mark A. Kenny,
currently a director and employee of the Company and Travel Link, based upon a
1995 agreement whereby such individuals agreed to hold Loeb Holding Corporation
and Travel Link harmless and to indemnify them from any and all claims or
liabilities for brokerage commissions or finder's fees incurred by reason of any
action taken by it or them, including the claims of the plaintiff's in this
action.
In August 1996, the Company gave notice to one of its former
officers 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 the former officer never provided such
services. Pending return of the shares, they are considered outstanding for all
periods presented herein. On April 17, 1997, the former officer of the Company
filed an action in the United States District Court, District of New Jersey,
against the Company, Travel Link, the officers of both companies and various
related and unrelated 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 Travel Link for
services he was to have provided 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.
On December 23, 1997, an individual filed an action in the
Superior Court of New Jersey against the Company and a former officer of the
Company alleging that the former officer of the Company induced such person to
leave her place of employment to assume employment with the Company. The claim
seeks monetary damages based upon an oral promise of employment allegedly made
by the same former officer of the Company. The Company believes that the
plaintiff's claim is without merit and intends to vigorously defend the action
and to assert numerous defenses in its answer.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company is 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
$3,756,092 since inception and at March 31, 1998, had working capital of
$1,224,269.
Revenues for the three months ended March 31, 1998 were $14,821 as compared to
no revenues for the three months ended March 31, 1997.The corresponding cost of
service for the latter period was $19,665.
Selling, general and administrative expenses were $412,761 for
the three months ended March 31, 1998, as compared to $215,017 during the three
months ended March 31, 1997. Cost increases during the 1998 period consist of
payroll and payroll related costs ($121,000), professional fees ($28,000),
7
marketing costs ($34,000), insurance costs ($2,000), travel costs ($9,000) and
other administrative costs ($40,000). Consulting fees decreased $36,000 during
the 1998 period.
Liquidity and Capital Resources
The Company=s funds have principally been provided from Loeb
Holding Corp. as escrow agent, Loeb Holding Corp., LTI Ventures Leasing
Corporation, a private offering and a public offering.
In March 1998, the holder of two Term Promissory Convertible
Notes in the principal amounts of $475,000 and $237,500 converted $400,000 of
the principal amount of the former note and $200,000 of the principal amount of
the latter note into 188,235 shares and 94,118 shares respectively of the Series
A Preferred Stock of the Company at a price of $2.125 per share.
In March 1998, the holder of four eighteen month Convertible
Promissory Notes aggregating $210,000, converted the total principal amount of
the four notes ($210,000) into 98,824 shares of the Series A Preferred Stock of
the Company at a price of $2.125 per share.
In March 1998, the holder of two Term Promissory Convertible
Notes aggregating $37,500, converted the total principal amount of the notes
($37,500) into 400,000 shares of the Common Stock of the Company at a price of
$0.09375 per share.
In March 31, 1998, the Company had cash of $1,634,396 and
working capital of $1,224,269. Management of the Company estimates that it has
sufficient resources including anticipated cash to be received from revenues, to
provide for its planned operations for the next twelve months.
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
NONE
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.
Date: May 15, 1998 Lawrence E. Burk
President and Chief Executive Officer
Date: May 15, 1998 John H. Wasko
Secretary, Treasurer and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements for the three months ended March 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,634
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,663
<PP&E> 257
<DEPRECIATION> 154
<TOTAL-ASSETS> 2,592
<CURRENT-LIABILITIES> 4390
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,026
<TOTAL-LIABILITY-AND-EQUITY> 2,592
<SALES> 15
<TOTAL-REVENUES> 20
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 96
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7
<INCOME-PRETAX> (521)
<INCOME-TAX> 0
<INCOME-CONTINUING> (521)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (512)
<EPS-BASIC> (.12)
<EPS-DILUTED> 0
</TABLE>
