-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M/w0z1/mOmlmRpUdtNeYlyQQ3PiKn1LUntrYA6cFso5yHAshTn8fCcmq3tayMRWf dn85y7/IhjzdA2X8i7c38Q== 0000950120-98-000017.txt : 19980121 0000950120-98-000017.hdr.sgml : 19980121 ACCESSION NUMBER: 0000950120-98-000017 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980120 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNAPTX WORLDWIDE INC CENTRAL INDEX KEY: 0001043933 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 870375342 STATE OF INCORPORATION: UT FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-22969 FILM NUMBER: 98509527 BUSINESS ADDRESS: STREET 1: 385 AIRPORT ROAD STREET 2: SUITE A CITY: ELGIN STATE: IL ZIP: 60123 BUSINESS PHONE: 8476220200 MAIL ADDRESS: STREET 1: 385 AIRPORT ROAD STREET 2: SUITE A CITY: ELGIN STATE: IL ZIP: 60123 10QSB 1 FORM 10-QSB OF SYNAPTX WORLDWIDE, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10 - QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended November 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 0-22969 SYNAPTX WORLDWIDE, INC. UTAH 87-0375342 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 385 AIRPORT ROAD, SUITE A, ELGIN, IL 60123 Registrant's telephone no., including area code: (847) 622-0200 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 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 --- ___ 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. OUTSTANDING AS OF CLASS DECEMBER 31, 1997 Common Stock, $ .001 par value 5,236,660 TABLE OF CONTENTS Heading Page ------- ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - November 30, 1997 and August 31, 1997 Consolidated Statements of Operations - three months ended November 30, 1997 and 1996 Consolidated Statements of Cash Flows - three months ended November 30, 1997 and 1996 Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis and Results of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Securities Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K SIGNATURES PART I ITEM 1. FINANCIAL STATEMENTS The following unaudited Condensed Consolidated Financial Statements for the three month periods ended November 30, 1997 and 1996 have been prepared by the Company. SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 1997 AND AUGUST 31, 1997 NOVEMBER 30 AUGUST 31, (UNAUDITED) (AUDITED) ----------- ---------- ASSETS CURRENT ASSETS: Cash $ 68,802 $ 58,265 Accounts receivable 950,363 1,001,638 Prepaid expenses and deposits 42,392 44,662 ---------- ---------- Total current assets 1,061,557 1,104,565 PROPERTY AND EQUIPMENT 277,349 254,990 Less accumulated depreciation (88,850) (69,041) ---------- ---------- Net property and equipment 188,499 185,949 COSTS IN EXCESS OF NET ASSETS ACQUIRED (net of accumulated amortization of $173,654 and $129,372) 1,587,391 1,631,673 OTHER ASSETS 83,264 60,998 ---------- ---------- TOTAL ASSETS $ 2,920,711 $ 2,983,185 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 640,349 $ 679,477 Accrued expenses and taxes 294,071 199,644 Notes payable 261,702 295,482 Current portion of long-term debt 7,934 8,120 Deferred revenue 309,000 414,700 ---------- ---------- Total current liabilities 1,513,056 1,597,423 LONG-TERM DEBT, NET OF CURRENT PORTION 20,200 21,200 COMMITMENTS - - STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock; $.001 par value; 10,000,000 shares authorized, none issued - - Common stock; $.001 par value; 25,000,000 shares authorized, 5,208,660 and 5,193,660 issued and outstanding 5,209 5,194 Additional paid in capital 2,081,395 2,052,977 Deficit (699,149) (693,609) ---------- ---------- Total stockholders' equity (deficit) 1,387,455 1,364,562 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 2,920,711 $ 2,983,185 =========== =========== SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996 1997 1996 (UNAUDITED) (UNAUDITED) ----------- ----------- NET SALES AND REVENUES: Marketing services and production $ 1,222,433 $ 592,926 Commission income 265,090 - Executive placement fees 15,330 - ---------- ---------- Total revenues 1,502,853 592,926 ---------- ---------- COST OF SALES AND REVENUES 1,028,206 439,290 ---------- ---------- GROSS PROFIT 474,647 153,636 Selling, general and administrative expenses 406,040 248,961 Depreciation and Amortization 64,091 32,130 ---------- ---------- LOSS FROM OPERATIONS 4,516 (127,455) Interest expense 10,056 23,093 ---------- ---------- NET LOSS $ (5,540) $ (150,548) =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING 5,201,160 3,075,050 NET LOSS PER SHARE $ (0.00) $ (0.05) =========== =========== SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996 1997 1996 (UNAUDITED) (UNAUDITED) ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (5,540) $(150,548) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation 19,809 10,700 Non cash rent expense - - Amortization 44,282 21,430 Changes in assets and liabilities net of assets acquired: Decrease (increase) in accounts receivable 51,275 (173,539) Decrease in other current assets 2,270 24,263 (Decrease) increase in accounts payable (39,128) 109,390 Increase (decrease) in accrued expenses and taxes 94,427 (165,527) (Decrease) increase in deferred revenue (105,700) 85,000 ---------- ---------- Net cash (used in) provided by operating activities 61,695 (238,831) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment (21,359) (64,204) Cash paid for acquisitions - - Additions to other assets (22,266) (11,317) ---------- ---------- Net cash used in investing activities (44,625) (75,521) ---------- ---------- CASH FROM FINANCING ACTIVITIES (Reductions in) bank lines of credit (33,780) (45,619) (Reductions in) long-term debt (1,186) (57,942) Decrease in restricted cash - 10,000 (Decrease) in liability to private placement subscribers - (10,000) Decrease in deferred placement costs - 5,000 Decrease in due from Maxwell Partners - 50,000 Increase in due to related party - 26,200 (Decrease) in due to officer - (32,000) Issuance of common stock-net 28,433 368,713 ---------- ---------- Cash provided by (used in) financing activities (6,533) 314,352 ---------- ---------- NET INCREASE IN CASH 10,537 - Cash at beginning of Period 58,265 - ---------- ---------- CASH AT END OF YEAR $ 68,802 $ - =========== =========== SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED NOTE 1. BASIS OF PRESENTATION The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which, in the opinion of management, are necessary for a fair statement of results for the interim periods. The accompanying financial statements include estimated amounts and disclosures based on management's assumptions about future events. Actual results may differ from those estimates. The results of operations for the three month periods ended November 30, 1997 and 1996 are not necessarily indicative of the results to be expected for the full year. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make information presented not misleading. These financial statements should be read in conjunction with the financial statements included in the Company's Form 10-SB/A for the fiscal year ended August 31, 1997, as filed with the Securities and Exchange Commission and available under the EDGAR reporting system or from the Company. The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses from operations as a result of its investment in personnel necessary to achieve its operating plan which is long-range in nature. In addition to the net loss of $5,540 for the three-month period ended November 30, 1997, as included herein, for the years ended August 31, 1997 and 1996 the Company realized net losses of $602,555 and $72,541, respectively. For the ten months ended August 31, 1995 (initial period of operation), the Company experienced a net loss of $18,513. At November 30, 1997, the Company has a working capital deficit of $451,499, supported by positive stockholders' equity of $1,387,455. The Company's ability to continue as a going concern is contingent upon its ability to secure additional financing and attain profitable operations. In addition, the Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates. Although the Company is pursuing a secondary private placement plus the refinancing and expansion of outstanding debt, there can be no assurance that the Company will be able to secure financing when needed or obtain such terms satisfactory to the Company, if at all, or complete its secondary private placement. Failure to secure such financing or complete its secondary private placement may result in the Company rapidly depleting its available funds and not being able to comply with its payment obligations under its bank loans. In addition, if the Company is unable to meet its obligations under its credit agreements, such creditors shall have the right to foreclose on the assets of the Company, which will be prior to the interests of the holders of Common Stock. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. NOTE 2. PRINCIPLES OF CONSOLIDATION The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The subsidiaries consist of Synaptx Access, Inc,. acquired in June, 1996, Synaptx Impulse, Inc., acquired in October, 1996, and ORAYCOM, Inc., acquired in June, 1997. Upon consolidation, significant intercompany accounts, transactions and profits are eliminated. NOTE 3. PRIVATE PLACEMENTS On October 2, 1997, the former owner of ORAYCOM, Inc. who is an existing employee of the Company purchased 15,000 shares of the Company's common stock, at the then fair market value of $2.00 per share, resulting in receipt of $30,000. On October 22, 1997, the Board of Directors authorized a second private placement of up to $2,000,000 in either shares of the Company's common stock at $2.30 per share or of units at $3.00 per unit consisting of one share of the Company's common stock and a warrant to purchase an additional share of the Company's common stock at $2.30 per share with an exercisable life of five years. The period of this offering extends through January 20, 1998. Through January 14, 1998, 28,000 shares of the Company's common stock plus stock warrants representing the right to purchase 15,000 shares of the Company's common stock at $2.30 per share have been issued resulting in proceeds of $74,900, all received after November 30, 1997. NOTE 4. SUPPLEMENTAL CASH FLOW DISCLOSURES On October 1, 1996 the Company purchased all of the capital stock of Maxwell Partners, Inc. (N/K/A Synaptx Impulse, Inc.), for $690,000 utilizing the Company's $.001 par value common stock. In conjunction with the acquisition, assets with a fair value of $591,384 were acquired and liabilities of $1,160,026 were assumed. Though cash of $43,231 was paid for this and a subsequent acquisition, none of these payments applied to the three month periods ended November 30, 1997 or 1996. Cash paid for interest was $11,200 and $10,423 for the three month periods ended November 30, 1997 and 1996, respectively. NOTE 5. SUBSEQUENT EVENTS On January 5, 1998, the Company acquired WG Controls, Inc., an Illinois Corporation, ("WG Controls") for 285,715 shares of the Company's $ .001 par value common stock, 137,143 shares of the Company's $ .001, Series A, convertible preferred stock and $270,000 in cash payable as follows: $125,000 on the first anniversary date of the Agreement, $125,000 on the second anniversary date of the Agreement, and $20,000 on the third anniversary date of the Agreement. The total initial cost of the acquisition is approximately $1,112,400, which is anticipated to exceed the fair value of the net assets being acquired by approximately $1,000,000. The excess will be amortized on the straight-line method over twenty years. Additionally, pursuant to the terms of the acquisition, the former shareholders of WG Controls may earn additional purchase price consideration in the form of additional common stock of the Company based on the attainment of both "commission revenues" and "earnings" above specified levels by WG Controls beginning January 1, 1998 through December 31, 1999. The additional consideration is specified as fixed amounts for the attainment of specified annual "commission revenues" and "earnings" for the subsequent calendar years ending December 31, 1998 and 1999. If WG Controls meets the specified "commission revenues" and "earnings" amounts, the additional consideration could amount to $1,000,000. The additional consideration, if any, would be added to the cost in excess of net assets acquired and will be amortized on the straight-line method over the remaining life of the twenty year amortization period, described above. WG Controls is a sales representative firm based in Illinois (approximately fifteen miles northwest of Chicago) that provides field sales and business development support for specified product lines and/or territories for clients under contract who include RELTEC, Thomas & Bettes and Johanson in addition to approximately 15 other clients. Revenues represent the earning of commissions on its customers' sales. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company is a fully integrated service provider of consulting, marketing, sales advice and implementation strategies serving customers in the telecommunications and information industries. The Company operates in one business segment. The Company's fiscal year ends August 31. OVERVIEW The Company plans marketing programs and develops sales and marketing literature for print and electronic media for which consulting fees are charged and production revenues are generated, represents certain product lines of customers serving the telecommunications (both voice and data networking) and cable TV industries as sales representatives for which commission income is being earned, and places executives in positions at telecommunications clients, primarily in sales and marketing positions, for which executive placement fees are being realized as revenues based upon an agreed upon percentage of salary and other compensation of the individuals so hired. The Company's objective is to use its knowledge of and its sales and marketing resources focused on the telecommunications industry to acquire and improve equipment manufacturers and software developers. Targeted acquisition candidates would include companies that have demonstrated an ability to envision, design and commercialize unique telecommunications products and services. Once such an entity is acquired, the Company will direct its sales, marketing and managerial resources toward achieving increased revenues and earnings. To date, the Company has only acquired companies that support its core services of consulting, marketing and sales. They will be the foundation to help create the potential revenues and earnings growth for target acquirees. The Company's ability to continue as a going concern is contingent upon its ability to secure additional financing, complete a secondary private placement, and attain profitable operations. In addition, the Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates. RESULTS OF OPERATIONS The following table sets forth the percentage relationship to total revenues of principal items contained in the Company's Consolidated Statements of Operations for the three month periods ended November 30, 1997 and 1996. It should be noted that percentages discussed throughout this analysis are stated on an approximate basis. Three Months Ended November 30, ------------------ 1997 1996 ---- ---- (Unaudited) Net sales and revenues . . . . . . . . 100% 100% Cost of sales . . . . . . . . . . . . 68% 74% ---- ---- Gross Profit . . . . . . . . . . . . . 32% 26% Selling, general and administrative expenses . . . . . . . . . . . . . . . 31% 47% ---- ---- Operating income (loss) . . . . . . . 1% (21%) Interest expense . . . . . . . . . . . 1% 4% ---- ---- Net loss . . . . . . . . . . . . . . . (0%) ( 25%) ==== ==== NET SALES AND REVENUES The Company's net sales and revenues increased by $909,927 or 153%, from $592,926 for the three months ended November 30, 1996 ("1Q/97") to $1,502,853 for the three months ended November 30, 1997 ("1Q/98"). The increase was attributable to increases of $629,507 from Marketing Services and Production, $265,090 from Commission Income, and $15,330 from Executive Placement Fees. The increases are in part due to 1Q/98 figures having a full three months of activity of the three major revenue sources, Synaptx Impulse ("Impulse"), Synaptx Access ("Access"), and ORAYCOM ("ORAYCOM"), while 1Q/97 revenues included only two months of activity for Impulse and no activity for ORAYCOM. COST OF SALES Cost of sales and revenues increased by $588,916 in 1Q/98, or 134%, from $439,290 in 1Q/97 to $1,028,206 in 1Q/98. The increase was primarily due to 1Q/98 amounts including a full three months of activity for the three major revenue sources, while 1Q/97 included only two months of activity for Impulse, and no activity for ORAYCOM. GROSS PROFIT The Company's gross profit margin, was 25.9% and 31.6% for 1Q/97 and 1Q/98, respectively. The increase in gross profit margin of 5.7 points in 1Q/98 is attributable to a more favorable mix of revenues, concentrating more on higher margin professional fees and sales commissions and de-emphasizing lower margin production type work. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses, including depreciation and amortization, increased by $189,040 in 1Q/98 or 67% from $281,091 in 1Q/97 to $470,131 in 1Q/98. This increase is primarily attributable to a full quarter of operations for the major subsidiaries in 1Q/98, versus only two months of activity for Impulse, and no activity for ORAYCOM in 1Q/97 and an increase of approximately $30,000 in depreciation and amortization, primarily associated with the above described acquisitions. INTEREST EXPENSE Interest expense decreased by $13,037 in 1Q/98 or 56%, from $23,093 in 1Q/97 to $10,056 in 1Q/98. This decrease is attributable to the repayment of a short-term loan in the subsequent quarter with $14,000 of interest attributable to amortization of stock warrants issued at an exercise price below fair market value. NET OPERATING LOSS The Company has accumulated approximately $460,000 of net operating loss carryforwards as of November 30, 1997, which may be offset against taxable income and income taxes in future years. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. The carry-forwards expire in the year 2012. In the event of certain changes in control of the Company, there will be an annual limitation on the amount of net operating loss carryforwards which can be used. No tax benefit has been reported in the financial statements for the year ended August 31, 1997 or for the three months ended November 30, 1997 because there is a 50% or greater chance that the carryforward will not be utilized. Accordingly, the potential tax benefit of the loss carryforward is offset by a valuation allowance of the same amount. LIQUIDITY AND CAPITAL RESOURCES The Company's principal cash requirements are for selling, general and administrative expenses, primarily outside consultants such as independent contractors who provide design, copywriting and professional marketing and sales consulting services, employee costs, funding of accounts receivable, capital expenditures and funding of acquisitions. The Company's primary sources of cash have been from an initial private placement of the Company's common stock which raised $753,993 of net proceeds, a stock rights offering to then existing shareholders which raised $7,828, a private placement to an existing employee of the Company which raised $30,000 and a secondary private placement which has raised $74,900, plus cash derived from operations. The Company is investigating various sources for additional financing, including both equity infusion and debt facility arrangements although no agreements for such additional financing have been reached as of the date of this filing. Three Months Ended November 30, 1997 Cash increased from $10,537 at the beginning of the period to $68,802 at the end of the period. Net cash provided by operations was $61,695 mainly attributable to non-cash expense items (depreciation and amortization) of $64,091 and a net increase in accounts payable and accrued expenses of $55,299 and a decrease in accounts receivable of $51,275, offset by the net loss of $5,540 and a decrease in deferred revenue of $105,700. Net cash used in investing activities was $44,625 attributable to additions to fixed assets of $22,359 and additions to other long term assets of $22,266. Net cash used in financing activities was $6,533 primarily attributable to proceeds from issuance of common stock of $28,433, offset by reductions in bank lines of credit of $33,780. Three Months Ended November 30, 1996 Cash balances remained unchanged at $-0-. Net cash used in operations was $238,831 attributable to the net loss of $150,548, an increase in accounts receivable of $173,539 and a net decrease in accounts payable and accrued expenses of $56,137, offset by non-cash expense items (depreciation and amortization) of $32,130, a decrease in other current assets of $24,263, and a decrease in deferred revenue of $85,000. Net cash used in investing activities was $75,251, primarily attributable to additions to fixed assets of $65,204 and additions to other long-term assets of $11,317. Net cash provided by financing activities was $314,352, primarily attributable to proceeds from the issuance of common stock of approximately $370,000 and to amounts advanced to Maxwell Partners, Inc., realized upon acquisition of $50,000, offset by reductions in the bank line of credit and debt of approximately $100,000. INFLATION In the opinion of management, inflation has not had a material effect on the operations of the Company. RISK FACTORS AND CAUTIONARY STATEMENTS Forward-looking statements in this report are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company wishes to advise readers that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements, including, but not limited to, the following: the ability of the Company to provide for its debt obligations and to provide for working capital needs from operating revenues, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. PART II ITEM 5. OTHER INFORMATION On January 5, 1998, the Company acquired WG Controls, Inc., an Illinois Corporation, ("WG Controls") for 285,715 shares of the Company's $ .001 par value common stock, 137,143 shares of the Company's $ .001, Series A, convertible preferred stock and $270,000 in cash payable as follows: $125,000 on the first anniversary date of the Agreement, $125,000 on the second anniversary date of the Agreement, and $20,000 on the third anniversary date of the Agreement. The total initial cost of the acquisition is approximately $1,112,400, which is anticipated to exceed the fair value of the net assets being acquired by approximately $1,000,000. The excess will be amortized on the straight-line method over twenty years. Additionally, pursuant to the terms of the acquisition, the former shareholders of WG Controls may earn additional purchase price consideration in the form of additional common stock of the Company based on the attainment of both "commission revenues" and "earnings" above specified levels by WG Controls beginning January 1, 1998 through December 31, 1999. The additional consideration is specified as fixed amounts for the attainment of specified annual "commission revenues" and "earnings" for the subsequent calendar years ending December 31, 1998 and 1999. If WG Controls meets the specified "commission revenues" and "earnings" amounts, the additional consideration could amount to $1,000,000. The additional consideration, if any, would be added to the cost in excess of net assets acquired and will be amortized on the straight-line method over the remaining life of the twenty year amortization period, described above. WG Controls is a sales representative firm based in Illinois (approximately fifteen miles northwest of Chicago) that provides field sales and business development support for specified product lines and/or territories for clients under contract who include RELTEC, Thomas & Bettes and Johanson in addition to approximately 15 other clients. Revenues represent the earning of commissions on its customers' sales. Management believes that the opportunity of providing a national Client sales representation focus will allow for increased geographic service scope with existing clients and an opportunity of adding additional clients. Financial statements required will be filed upon completion of the audits of WG Controls, but no later that sixty (60) days from the date this report is filed, or March 23, 1998. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule (b) No reports were filed on Form 8-K during this quarter. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SYNAPTX WORLDWIDE, INC. Date: January 20, 1998 By /s/Ronald L. Weindruch ---------------------------- RONALD L. WEINDRUCH, President and Chief Executive Officer Date: January 20, 1998 By /s/ Richard E. Hanik ---------------------------- RICHARD E. HANIK Chief Financial Officer EXHIIT INDEX Exhibit Description ------- ----------- 27 Financial Data Schedule EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-QSB
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SYNAPTX WORLDWIDE, INC. FORM 10-QSB FOR THE PERIOD ENDED NOVEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS AUG-31-1998 NOV-30-1997 69 0 950 0 0 1,062 277 (89) 2,921 1,513 0 0 0 5 1,382 2,921 1,503 1,503 1,028 1,028 481 0 10 (6) 0 (6) 0 0 0 (6) .00 .00
-----END PRIVACY-ENHANCED MESSAGE-----