-----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, RiAOO4XDywlgZvNedhERWW5NIq+fPWIYuJHPBRffgBqYMxaojjUVaKXFxLXFKIiJ Fpgm8ZSL4I3v6R7+o3bCww== 0001024920-04-000029.txt : 20041104 0001024920-04-000029.hdr.sgml : 20041104 20041104155442 ACCESSION NUMBER: 0001024920-04-000029 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041104 DATE AS OF CHANGE: 20041104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNERTECK INC CENTRAL INDEX KEY: 0001289630 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 200929024 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-50754 FILM NUMBER: 041119711 BUSINESS ADDRESS: STREET 1: 11585 SOUTH STATE, SUITE 102 CITY: DRAPER STATE: UT ZIP: 84065 BUSINESS PHONE: (801) 816-2511 MAIL ADDRESS: STREET 1: 11585 SOUTH STATE, SUITE 102 CITY: DRAPER STATE: UT ZIP: 84065 10QSB 1 s10q.txt SYNERTECK SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-QSB [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2004 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: 000-50754 SYNERTECK INCORPORATED (Exact name of small business issuer as specified in its charter) Delaware 20-0929024 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 11585 South State Street, Suite 102 Draper, Utah 84020 (Address of principal executive offices) (Zip Code)
(801) 816-2505 Issuer's telephone number) - -------------------------------------------------------------------------------- (Former name or former address and former fiscal year, if changed since last report.) APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 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, 2004, the Company had outstanding 500,000 shares of common stock, par value $0.001 per share. Transitional Small Business Disclosure Format (check one) [ ] Yes [x ] No 2 PART I FINANCIAL INFORMATION The Financial Statements of the Company are prepared as of September 30, 2004. ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB CONTENTS Condensed Balance Sheets..................................................... 4 Condensed Statements of Operations........................................... 6 Condensed Statements of Stockholders' Equity................................. 8 Condensed Statements of Cash Flows........................................... 9 Notes to the Condensed Financial Statements................................. 11 3 SYNERTECK INCORPORATED Condensed Balance Sheets ASSETS
September 30, December 31, 2004 2003 ------------ ------------ (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 44,051 $ 7,940 Accounts receivable, net 19,290 5,095 Prepaid expenses 715 - ------------------ ----------------- Total Current Assets 64,056 13,035 ------------------ ----------------- PROPERTY AND EQUIPMENT 21,749 3,119 ------------------ ----------------- OTHER ASSETS Receivable - related parties 18,374 16,497 ------------------ ----------------- Total Other Assets 18,374 16,497 ------------------ ----------------- TOTAL ASSETS $ 104,179 $ 32,651 =============== ===============
The accompanying notes are an integral part of these condensed financial statements. 4 SYNERTECK INCORPORATED Condensed Balance Sheets (Continued) LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31, 2004 2003 ------------ ------------ (Unaudited) CURRENT LIABILITIES Accounts payable $ 11,031 $ 12,698 Accrued expenses 9,166 1,801 Income tax payable - related parties 11,720 9,580 ------------------ ----------------- Total Current Liabilities 31,917 24,079 ------------------ ----------------- LONG TERM LIABILITIES Notes payable 15,000 - Notes payable - related parties 35,000 - ------------------ ----------------- Total Long Term Liabilities 50,000 - ------------------ ----------------- TOTAL LIABILITIES 81,917 24,079 ------------------ ----------------- STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 100,000,000 shares authorized, 500,000 shares issued and outstanding 500 500 Additional paid-in capital (500) (500) Retained Earnings 22,262 8,572 ------------------ ----------------- Total Stockholders' Equity 22,262 8,572 ------------------ ----------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 104,179 $ 32,651 =============== ===============
The accompanying notes are an integral part of these condensed financial statements. 5 SYNERTECK INCORPORATED Condensed Statements of Operations (Unaudited)
For the Three Months Ended September 30, --------------------------------- 2004 2003 ------------- ----------------- NET REVENUES Product revenue $ 1,907 $ - Service revenue 27,435 4,089 Related party revenue 31,410 21,000 ------------------ ----------------- Total Net Revenues 60,752 25,089 ------------------ ----------------- OPERATING EXPENSES Cost of sales-product 1,488 - Cost of sales-service 1,364 359 Cost of sales-related party 2,901 1,500 General and administrative 23,740 7,161 Selling and marketing 16,731 6,748 Research and development 7,037 2,853 ------------------ ----------------- Total Operating Expenses 53,261 18,621 ------------------ ----------------- INCOME FROM OPERATIONS 7,491 6,468 ------------------ ----------------- OTHER INCOME (EXPENSES) Interest expense (1,008) - Interest income 80 50 ------------------ ----------------- Total Other Income (Expenses) (928) 50 ------------------ ----------------- NET INCOME BEFORE INCOME TAXES 6,563 6,518 PROVISION FOR INCOME TAXES (1,263) (1,255) ------------------ ------------------ NET INCOME $ 5,300 $ 5,263 =============== =============== BASIC NET INCOME PER SHARE $ 0.01 $ 0.01 =============== =============== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 500,000 500,000 =============== ===============
The accompanying notes are an integral part of these condensed financial statements. 6 SYNERTECK INCORPORATED Condensed Statements of Operations (Continued) (Unaudited)
For the Nine Months Ended September 30, ------------------------------- 2004 2003 ------------- ---------------- NET REVENUES Product revenue $ 20,022 $ 12,505 Service revenue 56,532 34,603 Related party revenue 71,340 51,706 ------------------ ----------------- Total Net Revenues 147,894 98,814 ------------------ ----------------- OPERATING EXPENSES Cost of sales-product 14,137 6,098 Cost of sales-service 11,442 4,582 Cost of sales-related party 7,829 7,500 General and administrative 50,941 22,591 Selling and marketing 31,367 19,431 Research and development 13,138 7,948 ------------------ ----------------- Total Operating Expenses 128,854 68,150 ------------------ ----------------- INCOME FROM OPERATIONS 19,040 30,664 ------------------ ----------------- OTHER INCOME (EXPENSES) Interest expense (2,301) - Interest income 214 50 ------------------ ----------------- Total Other Income (Expenses) (2,087) 50 ------------------ ----------------- NET INCOME BEFORE INCOME TAXES 16,953 30,714 PROVISION FOR INCOME TAXES (3,263) (5,912) ------------------ ----------------- NET INCOME $ 13,690 $ 24,802 =============== =============== BASIC NET INCOME PER SHARE $ 0.03 $ 0.05 =============== =============== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 500,000 500,000 =============== ===============
The accompanying notes are an integral part of these condensed financial statements. SYNERTECK INCORPORATED 7 SYNERTECK INCORPORATED Condensed Statements of Stockholders' Equity
Additional Paid-in Accumulated Shares Amount Capital Deficit --------------- --------------- --------------- ---------------- Balance, December 31, 2002 500,000 $ 500 $ (500) $ (9,056) Net income for the year ended December 31, 2003 - - - 17,628 --------------- ---------------- --------------- ---------------- Balance, December 31, 2003 500,000 500 (500) 8,572 Net income for the nine months ended September 30, 2004 (unaudited) - - - 13,690 --------------- ---------------- --------------- ---------------- Balance, September 30, 2004 (unaudited) 500,000 $ 500 $ (500) $ 22,262 =============== ================ =============== ================
The accompanying notes are an integral part of these condensed financial statements. 8 SYNERTECK INCORPORATED Condensed Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 30, ------------------------------------- 2004 2003 ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,690 $ 24,802 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 2,767 201 Changes in operating assets and liabilities: Accounts receivable (14,195) 17 Due to/from related parties 263 (22,088) Other current assets (715) - Accounts payable (1,667) 1,065 Accrued expenses 7,365 (826) ---------------- ----------------- Net Cash Provided by Operating Activities 7,508 3,171 ---------------- ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (21,397) (3,622) ---------------- ----------------- Net Cash Used in Investing Activities (21,397) (3,622) ---------------- ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of notes payable 15,000 - Proceeds from issuance of notes payable - related parties 35,000 - ---------------- ----------------- Net Cash Provided by Financing Activities 50,000 $ - ---------------- ----------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 36,111 $ (451) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,940 2,839 ---------------- ----------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 44,051 $ 2,388 =============== =============== SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for: Interest $ - $ - Income taxes $ - $ -
The accompanying notes are an integral part of these condensed financial statements. 9 SYNERTECK INCORPORATED Notes to the Condensed Financial Statements September 30, 2004 and December 31, 2003 NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed financial statements have been prepared by the Company 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 in accordance with such rules and regulations. The information furnished in the interim condensed financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its Form 10SB filed on September 15, 2004. Operating results for the three and nine months ended September 30, 2004 are not necessarily indicative of the results to be expected for the year ending December 31, 2004. NOTE 2 - MATERIAL EVENTS During the nine months ended September 30, 2004, the Company received a total of $15,000 proceeds from notes payable issued to unrelated individuals and $35,000 proceeds from notes payable to related individuals. These notes are unsecured, bear interest at 8% per annum with principal and interest due on March 1, 2007. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION You should read the following discussion of the company's financial condition and results of operations in conjunction with the audited financial statements and related notes included in this report. This discussion may contain forward-looking statements, including, without limitation, statements regarding our expectations, beliefs, intentions, or future strategies that are signified by the words "expects," "anticipates," "intends," "believes," or similar language. Actual results could differ materially from those projected in the forward looking statements. You should carefully consider the information set forth above under the caption "Risk Factors" in addition to the other information set forth in this report. We caution you that Synerteck's business and financial performance is subject to substantial risks and uncertainties. Overview Synerteck is an integrator of business strategy with technology solutions. We attempt to understand the business of our clients principally from their customer's point of view, in order to properly position ourselves to advocate and implement measures that achieve the client's organizational objectives. Our clients consist of small to medium sized organizations, operating in North America and Europe. Currently, we service eight clients on a continuous monthly basis and average ten additional clients for one-time or intermittent projects over the course of a year. You can learn more about our business at our website located at www.synerteck.com. Results of Operations Following is our discussion of the relevant items affecting results of operations for the periods ended September 30, 2004 and 2003. Revenues. Revenue is recognized upon completion of services or delivery of goods. Advance customer payments are recorded as deferred revenue until such time as they are recognized. Product sales are not warranted by the Company and may be subject only to warranties that may be provided by the product manufacturer. Therefore, product warranties have no effect on the financial statements. Synerteck generated net revenues of $60,752 during the three months ended September 30, 2004, a 142% increase compared to $25,089 in net revenues during the third quarter of 2003. For the nine month period ended September 30, 2004, net revenues were 147,894, representing a 50% increase compared to $98,814 in net revenues during the first nine months of 2003. This increase was due to a sales initiative started in 2004 which provided incentives on new sales. Furthermore, hardware sales increased 60% over the prior year and several new IT service contracts were established in the first nine months of 2004. Along with web site design and hosting, other sources of revenue were information technology systems support and equipment leases. We anticipate that these three areas will constitute the principal source of Synerteck's revenue for the foreseeable future. Our business model and objective is to receive recurring revenue from long-term contracts with established clients. Over the past twelve months, we have provided networking, programming, and hosting services for eight clients on a continuous basis and approximately ten clients for one-time projects. In addition, we procure and resell hardware and software packages to our clients as well as single transaction customers. Sales of software and hardware products are inherently unpredictable, but we anticipate that revenues from this activity will become more consistent as we grow our client base. During the first nine 11 months of 2004 and 2003, we received $122,272 and $84,497, respectively, in gross revenues from information technology services, and $25,622 and $14,317, respectively, in gross revenues from software and hardware product resales and equipment leasing. Cost of Sales. Expenses which comprise cost of sales are the wholesale cost of hardware, software, any accompanying licenses, product sales commissions, and commissions paid in connection with information technology consulting contracts. Also included in cost of sales are personnel and materials costs to administer these information technology services. As more organizations utilize our technology services, future expenses included in cost of goods sold will increase as well as potential fee sharing expenses to organizations that assist us in providing these services. Cost of sales for the three months ended September 30, 2004 were $5,753, a 209% increase from $1,859 during the third quarter of 2003. For the nine month period ended September 30, 2004, cost of sales were $33,408, a 84% increase from $18,180 during the first nine months of 2003. This increase corresponds with the increase of revenues associated with the sales initiative started in 2004 and is mainly due to commission incentives on new sales. Furthermore, the sales of computer hardware during the nine months ended September 30, 2004 increased 60% compared to the same period in the prior year. Hardware sales do not yield as high a margin as other products offered by the Company, thus contributing to the higher cost of sales percentage. Cost of sales is attributable to (i) expenses incurred pursuant to the delivery of our information technology support, and (ii) sales commissions paid in connection with technology consulting projects. General and Administrative Expenses. Our general and administrative expenses have been comprised of administrative wages and benefits; occupancy and office expenses; outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. General and administrative expenses for the three months ended September 30, 2004 were $23,740, a 232% increase from $7,161 during the third quarter of 2003. General and administrative expenses for the nine month period ended September 30, 2004 were $50,941, a 125% increase from $22,591 during the first nine months of 2003. This increase was primarily due to accounting and legal fees associated with the audit of the financial statements and filings with the Securities and Exchange Commission. Furthermore, as noted in the notes to the financial statements, the Company also entered into a management services agreement with its sole shareholder, SportsNuts, Inc. Although we endeavor to decrease certain costs associated with personnel salaries and benefits, professional fees, contract labor, and rent and occupancy-related expense, as the business grows, these expenses will increase. Our payroll expense accounted for approximately $57,886 of general and administrative expenses during the nine month period ended September 30, 2004, as compared to $38,278 during the first nine months of 2003. Because we sublease our office facilities from our parent corporation, we do not anticipate any material commitments for capital expenditures in the foreseeable future. Selling and Marketing Expenses. Our selling and marketing expenses include selling/marketing wages and benefits; advertising and promotional expenses; travel and other miscellaneous related expenses. Selling and marketing expenses for the three months ended September 30, 2004 were $16,731, a 148% increase from $6,748 during the third quarter of 2003. For the nine month period ended September 30, 2004, selling and marketing expenses were $31,367, a 61% increase from $19,431 during the first nine months of 2003. This increase was primarily attributable to increased salaries of sales personnel as well as additional expenditures for advertising and marketing. We expect that our sales and marketing expenditures will increase as we continue to develop our client base and expand our efforts in computer hardware and software leasing. 12 Product Development. Product research and development expenses for the three months ended September 30, 2004 were $7,037, a 147% increase from $2,853 during the third quarter of 2003. For the nine month period ended September 30, 2004, product development expenses were $13,138, a 65% increase from $7,948 during the first nine months of 2003. Our product development expenses relate primarily to payroll and systems development for our programming and web site hosting services. We believe that significant investments in product development are required to remain competitive. Accordingly, we expect to incur increased expenditures with respect to product development in future periods. Other Income (Expense). We incurred net other expense of $2,087 for the nine months ended September 30, 2004 compared to net other income of $50 during the first nine months of 2003. The expenses incurred in this category were comprised primarily of interest expenses related to the $50,000 in notes payable issued by the Company during the first half of 2004. Income tax expense of $3,263 was also recorded during the first nine months of 2004 compared to $5,912 during the first nine months of 2003. Off-Balance Sheet Arrangements Synerteck is not subject to any off-balance sheet arrangements. Personnel Synerteck has two full-time employees, two part-time employees, and numerous project-based contract personnel that we utilize to carry out our business. We utilize contract personnel on a continuous basis, primarily in connection with service contracts which require a high level of specialization for one or more of the service components offered. We expect to hire one more full-time employee during 2004. Although competition for technology personnel in the metropolitan Salt Lake City area is intense, because we offer competitive compensation, maintain a productive and collegial work environment, and work with internationally-based clients, we don't believe we will have significant difficulty retaining additional employees or contract personnel in the future. Liquidity and Capital Resources Since inception, we have financed Synerteck's operations from its business cash flows and the issuance of $50,000 of promissory notes. As of September 30, 2004, Synerteck's primary source of liquidity consisted of $44,051 in cash and cash equivalents. Because Synerteck is profitable, we do not expect to require additional investment capital during the next twelve months to continue our operations at their current level. Nevertheless, we may seek to secure additional debt or equity capital to finance substantial business development initiatives or acquire another information technology firm. At present, however, we have no plans to seek any such additional capital or to engage in any business development or acquisition activity. Related Party Transactions Synerteck provides various services including network and server maintenance and support, user support and website maintenance to its sole shareholder, SportsNuts, Inc. In exchange for these services, Synerteck receives $2,000 per month. No minimum or specific performance is required by the terms of this agreement and we do not foresee any negative trends that would impact future revenues or operations. 13 FORWARD LOOKING STATEMENTS AND RISK FACTORS Forward Looking Statements When used in this report, the words, "believes," "plans," "expects," and similar expressions are intended by us to identify forward-looking statements within the meaning of and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are subject to certain risks and uncertainties, including those discussed below, that could cause actual results to differ materially from those we have projected. These forward-looking statements speak only as of the date hereof. All of these forward-looking statements are based on our estimates and assumptions, which although we believe them to be reasonable, are inherently uncertain and difficult to predict. We cannot assure you that the benefits anticipated in these forward-looking statements will be achieved. We undertake no obligation to update any forward-looking statements, but you are advised to consult any further disclosures by the Synerteck on this subject in its subsequent filings pursuant to the Securities Exchange Act of 1934. Furthermore, we are providing these cautionary statements identifying risk factors, listed below, that could cause our actual results to differ materially from expected and historical results. It is not possible for our management to foresee or identify all such factors. Consequently, this list should not be considered an exhaustive statement of all potential risks, uncertainties and inaccurate assumptions. RISK FACTORS Operating Risks We are Heavily Dependent Upon our Key Personnel. Synerteck's success depends, in large part, upon the talents and skills of its management and key personnel. In addition, to the extent that any of our key personnel are unable or refuse to continue their association with Synerteck, a suitable replacement would have to be found. The competition for qualified personnel in the computer networking is intense, and there are limited numbers of such qualified personnel in the metropolitan Salt Lake City area. We cannot assure you that we would be able to find suitable replacements for our existing management personnel or technical personnel or that we could retain such replacements for an affordable amount. You May Not Agree With The Decisions of Our Management Team. Although Synerteck's directors and officers will endeavor to make decisions as they reasonably deem consistent with their fiduciary duties under Delaware corporate law, you may disagree with these decisions. Synerteck's management has significant control over stockholder matters, which may affect the ability of minority stockholders to influence our activities. We are Heavily Dependent Upon a Few Key Clients. Three client accounts comprise a substantial majority of Synerteck's monthly revenues, one of which is serviced on an oral agreement on a month-to-month basis. Although we believe we will continue to service these accounts at the current billing rate for the remainder of 2004 and into 2005, economic and other factors beyond our control may result in a loss of one or all three of these accounts. If we lost one or all of these clients, we would be required to immediately replace these clients with similar sized accounts, or dramatically cut our operating costs to remain in business. If Synerteck were to cease its operations, you would likely lose the entire value of your investment. 14 Our Business is Inherently Risky. Service based businesses in the computer networking and hosting industries are inherently risky. If our services do not generate enough cash flow to meet our operating expenses (such as debt service, capital expenditures, and legal and accounting fees), our ability to develop and expand our business and become profitable will be adversely affected. Our Business Could be Adversely Affected by Many Factors. Income from outsourced networking, hosting, and programming services may be adversely affected by a number of factors, including, but not limited to: o the general economic climate (such as too much supply or too little demand fo rinformation technology services, as well as changes in market rates); o the increasing tendency of medium sized businesses to rely on internal personnel to service and maintain computer networks, even if such personnel are not properly trained to perform the tasks required; o intense competition and rapid and significant technological change in the information technology industry; o increasing competition from outsourced lowre overhead firms in India, Russia, and other rapidly developing technology sectors around the world; or o damage from fire, earthquakes, prolonged power outages, or other natural or man-made disasters. We will Require Additional Financing for Expansion and other Functions. Although Synerteck is currently profitable, we will likely require substantial additional capital in the future for expansion, business development, marketing, computer software and systems, overhead, administrative, and other expenses. We cannot assure you that we will be able to raise additional funds or that financing will be available to Synerteck on acceptable terms. Lack of additional funds could significantly affect our business. Further, funds raised through future equity financing could be substantially dilutive to you and other existing shareholders. We Compete With Substantially Larger Companies. In attempting to market our services to medium and larger organizations, we compete with substantially larger companies which have greater name recognition and financial resources to price their services and, in particular, computer products which are purchased through them. Accordingly, we may not be able to effectively compete for larger outsourcing and purchasing contracts unless and until we possess additional financial, marketing, and technical resources. Our Computer Systems May Fail. Synerteck's success is substantially dependent upon our ability to deliver our clients high quality, uninterrupted access to their websites, their networks, their e-mail systems, and technology applications, which requires that we actively maintain our computer hardware and software systems, as well as the data and information stored therein. Our systems are vulnerable to damage by fire, natural disaster, power loss, telecommunications failures, unauthorized intrusion, and other catastrophic events. Any substantial interruption in our systems would have a material adverse effect on our business, operating results, and financial condition. In addition, our systems may be vulnerable to computer viruses, physical or electronic break-ins, sabotage, or other problems caused by third parties which could lead to interruptions, delays, loss of data, or cessation in service to persons desiring to access their networks and internet properties. The occurrence of any of these risks could have a material adverse effect upon Synerteck's business, results of operations, and financial condition. 15 Investment Risks A Purchase of Synerteck Shares is a Speculative Investment. Synerteck's shares are a speculative investment. To date, Synerteck has generated a modest amount of profits and we cannot guarantee that it will continue to do so or that the level of profits will increase in the future. If Synerteck were to lose one or more of its principal customers, it would likely generate losses, and we would be forced to scale down Synerteck's operations or raise investment capital to continue operations. If Synerteck were to generate losses and we were unsuccessful at decreasing Synerteck's operating costs or raising investment capital, it is unlikely that Synerteck would be able to meet its financial obligations and you could lose your entire investment. There has Never Been a Public Market For Our Shares. There has been no public market for the common stock of Synerteck. If a public market for the common stock does develop at a future time, sales of shares by shareholders of substantial amounts of common stock of Synerteck in the public market could adversely affect the prevailing market price and could impair our future ability to raise capital through the sale of our equity securities. You May Lack Liquidity in Your Shares. Because in the future, our stock may trade on the over-the-counter bulletin board, our stockholders may have greater difficulty in selling their shares when they want and for the price they want. The over-the-counter bulletin board is separate and distinct from the Nasdaq stock market. The bulletin board does not operate under the same rules and standards as the Nasdaq stock market, including, for example, order handling rules. The absence of these rules and standards may make it more difficult for a stockholder to obtain execution of an order to trade and to obtain the price they wanted for a trade. This means our shareholders may not be able to sell their shares when they want for a price they want. In addition, because stocks traded on the bulletin board are usually thinly traded, highly volatile, have fewer market makers and are not followed by analysts, our stockholders may have greater difficulty in selling their shares when they want and for the price they want. Investors may have greater difficulty in getting orders filled because it is anticipated that if our stock trades on a public market, it initially will trade on the over-the-counter bulletin board rather than on Nasdaq. Investors' orders may be filled at a price much different than expected when an order is placed. Trading activity in general is not conducted as efficiently and effectively as with Nasdaq-listed securities. Bulletin board transactions are conducted almost entirely manually. Because there are no automated systems for negotiating trades on the bulletin board, they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore, when investors place market orders - an order to buy or sell a specific number of shares at the current market price - it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and getting execution. Because bulletin board stocks are usually not followed by analysts, there may be lower trading volume than for Nasdaq-listed securities. Further, a registered broker-dealer must submit an application to the National Association of Securities Dealers to enable our stock to be listed on the bulletin board. Because the National Association of Securities Dealers will conduct their own review of Synerteck and its business, we cannot assure you that we will be successful in getting Synerteck listed on the bulletin board or any other quotation medium. We Have Never Issued a Dividend and Don't Anticipate any Dividends in the Future. Synerteck has never issued a dividend and we do not anticipate paying dividends on our common stock in the foreseeable future. Furthermore, we may also be restricted from paying dividends in the future pursuant to subsequent financing arrangements or pursuant to Delaware law. 16 We Have Limited the Liability of Our Management. Synerteck has adopted provisions in its Certificate of Incorporation which limit the liability of our officers and directors and provisions in our bylaws which provide for indemnification by Synerteck of our officers and directors to the fullest extent permitted by Delaware corporate law. Synerteck's Certificate of Incorporation generally provide that its directors shall have no personal liability to Synerteck or its stockholders for monetary damages for breaches of their fiduciary duties as directors, except for breaches of their duties of loyalty, acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, acts involving unlawful payment of dividends or unlawful stock purchases or redemptions, or any transaction from which a director derives an improper personal benefit. Such provisions substantially limit your ability to hold directors liable for breaches of fiduciary duty. You Could be Diluted from the Issuance of Additional Common and Preferred Stock. Synerteck is authorized to issue up to 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. To the extent of such authorization, the Synerteck board of directors will have the ability, without seeking shareholder approval, to issue additional shares of common stock in the future for such consideration as the board may consider sufficient. The issuance of additional common stock in the future may reduce your proportionate ownership and voting power. 17 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable. ITEM 5. OTHER INFORMATION Not applicable.
18 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
No reports on Form 8-K were filed during the quarter ended September 30, 2004. The following documents are filed as exhibits to this Form 10-QSB: INDEX TO EXHIBITS Exhibit Number Title of Document 3.1 Certificate of Incorporation of Synerteck Incorporated, a Delaware corporation. (1) 3.2 Bylaws of Synerteck Incorporated, a Delaware corporation. (1) 10.1 Services Agreement between the Registrant and Healthcare Enterprise Group PLC.(1) 10.2 Summary of Services Agreement between the Registrant and Moore, Clayton & Co. Inc. (1) 10.3 Services Agreement between the Registrant and SportsNuts, Inc. (1) 10.4 Management and Business Development Agreement between the Registrant and SportsNuts, Inc. (1) 10.5 Sublease Agreement between the Registrant and SportsNuts, Inc. (1) 99.1 Certification by Chief Executive Officer, Clayton Barlow, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 99.2 Certification by Chief Financial Officer, Chene Gardner, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 99.3 Certification by Chief Executive Officer Clayton Barlow, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.4 Certification by Chief Financial Officer Chene Gardner, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(1) Filed as an Exhibit to Amendment Number 2 to the Company's registration statement on Form 10-SB, filed with the Commission on September 15, 2004. 19 [PG NUMBER] SIGNATURES Pursuant to the 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. SYNERTECK INCORPORATE Date: November 4, 2004 BY: /s/ Chene Gardner -------------------------------------- Chene Gardner Chief Financial Officer
20 EX-31 2 ex991.txt CERTIFICATION BY CEO, CLAYTON BARLOW Exhibit 99.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Clayton B. Barlow, certify that: 1. I have reviewed this report on Form 10-SB of Synerteck Incorporated.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report are conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial date and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 15, 2004 By /s/ Clayton B. Barlow --------------------------------------- Clayton B. Barlow Chief Executive Officer EX-31 3 ex992.txt CERTIFICATION BY CEO, CHENE GARDNER Exhibit 99.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Chene Gardner, certify that: 1. I have reviewed this report on Form 10-SB of Synerteck Incorporated.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report are conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial date and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 15, 2004 By /s/ Chene Gardner ---------------------------------------------- Chene Gardner Chief Financial Officer EX-32 4 ex993.txt CERTIFICATION BY CEO, CLAYTON BARLOW Exhibit 99.3 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the report of Synerteck Incorporated. (the "Company") on Form 10-QSB including financial statements for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Reports"), I, Clayton B. Barlow, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Periodic Reports fully comply with the requirements of the Securities Exchange Act of 1934; and (2) The information contained in the Periodic Reports fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: August 15, 2004 By /s/ Clayton B. Barlow ----------------------------------------------- Clayton B. Barlow Chief Executive Officer EX-32 5 ex994.txt CERTIFICATION BY CEO, CHENE GARDNER Exhibit 99.4 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the report of Synerteck Incorporated. (the "Company") on Form 10-QSB including financial statements for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Periodic Reports"), I, Chene Gardner, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Periodic Reports fully comply with the requirements of the Securities Exchange Act of 1934; and (2) The information contained in the Periodic Reports fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: August 15, 2004 By /s/ Chene Gardner ------------------------------------------- Chene Gardner Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----