-----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, UYHW0ubEQ0dpWfoNOi0nv8UaoSwaA7dqMLjhi/2+P32TnxM2avCz1xSZdmDLNSW6 m4dmvMJs8UbtB3sX3d9I1g== 0000095986-99-000001.txt : 19990126 0000095986-99-000001.hdr.sgml : 19990126 ACCESSION NUMBER: 0000095986-99-000001 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNERGISTICS INC CENTRAL INDEX KEY: 0000095986 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 042283157 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-06421 FILM NUMBER: 99511871 BUSINESS ADDRESS: STREET 1: 9 TECH CIRCLE CITY: NATICK STATE: MA ZIP: 01760 BUSINESS PHONE: 5086551340 MAIL ADDRESS: STREET 1: 9 TECH CIRCLE CITY: NAHCK STATE: MA ZIP: 01760 FORMER COMPANY: FORMER CONFORMED NAME: KILBANON CORP DATE OF NAME CHANGE: 19600201 10QSB/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended Commission File Number O-6421 September 30, 1998 SYNERGISTICS, INC. MASSACHUSETTS 04-2283157 (State of Incorporation) (IRS Employer ID Number) 9 Tech Circle, Natick, MA 01760 (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code (508)655-1340 Securities registered pursuant to Section 12(g) of the Act. Common Stock $0.01 Par Value Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceeding 12 months (or 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 There is no public market for, and thus no aggregate market value of, the registrants securities. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the last practicable date. Class Outstanding at October 31, 1998 Common Stock, one cent par value 9,557,561 NO DOCUMENTS INCORPORATED BY REFERENCE - --- SYNERGISTICS, INC. BALANCE SHEET ASSETS (UNAUDITED) Sept 30 Dec 31 1998 1997 CURRENT ASSETS Cash 69,648 36,686 Accounts receivable 522,573 529,682 Allowance for doubtful accts 0 (20,000) Inventories 420,887 335,088 Prepaid expenses 22,761 15,026 ------- ------- TOTAL CURRENT ASSETS 1,035,869 896,482 EQUIPMENT, less allowances of $93,667 and $79,267 for depreciation 58,560 62,921 DEFERRED TAXES 817,776 817,776 ------- ------- TOTAL ASSETS $ 1,912,205 $ 1,777,179 ============ ============ LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable $ 297,827 $ 307,033 Accrued expenses and other current liabilities 50,341 56,779 Amount due stockholder 148,220 86,297 --------- --------- TOTAL CURRENT LIABLITIES 496,388 450,109 STOCKHOLDERS' EQUITY Common Stock (9,557,561 shares issued including shares held in Treasury) 95,576 95,576 Additional paid-in capital 6,799,637 6,799,637 Retained earnings (deficit) (5,472,261) (5,561,008) --------- --------- 1,422,952 1,334,205 Cost of Common Stock held in Treasury (7,135) (7,135) --------- --------- 1,415,817 1,327,070 TOTAL LIABILITIES. PREFERRED STOCK --------- --------- AND SHAREHOLDERS' EQUITY $ 1,912,205 $ 1,777,179 ========= ========= SYNERGISTICS, INC. STATEMENT OF OPERATIONS PERIOD OF NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1998 1997 Sales $ 1,911,049 $ 1,609,146 Other income 98,151 31,531 --------- --------- 2,009,200 1,640,677 Costs and expenses: Cost of sales 1,176,747 1,226,261 Selling, general and administrative expenses 743,535 669,318 Interest expense 172 965 -------- --------- 1,920,454 1,896,544 --------- --------- Net gain (loss) $ 88,746 $ (255,867) ========= ========= Gain (loss) per share of Common Stock Assuming no dilution $ 0 $ (0) Assuming full dilution $ 0 $ (0) SYNERGISTICS, INC. STATEMENT OF CHANGES IN FINANCIAL POSITION PERIODS OF NINE MONTHS SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 88,746 $ (255,867) Adjustments to reconcile net income to net cash (used) provided by operating activities: Depreciation 14,400 12,600 (Increase) decrease in accounts receivable (12,891) 125,332 (Increase) decrease in inventories (85,798) (50,525) (Increase) decrease in prepaid expenses and other assets (7,735) 2,431 Increase (decrease) in accounts payable (9,206) (33,559) Increase (decrease) in accrued expenses and other current liabilities (6,438) (6,280) Increase (decrease) in amounts due shareholder 61,923 (41,250) ------- ------- TOTAL ADJUSTMENTS (45,745) 8,749 ------- ------- NET CASH USED BY OPERATING ACTIVITIES 43,001 (247,118) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (10,039) (8,853) Stock issued 0 210,000 ------ ------- NET CASH (USED) BY INVESTING ACTIVITIES (10,039) 201,147 NET CHANGE IN CASH 32,962 (45,971) CASH AT BEGINNING OF YEAR 36,686 101,550 ------- ------- CASH AT END OF PERIOD $ 69,648 $ 55,579 ======= ======= SYNERGISTICS, INC. SELECTED INFORMATION Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report Form 10-K. The results of operations for the period ended Sept. 30, 1998 are not necessarily indicative of the operating results for the full year. Basis of Presentation It is the opinion of management that all significant adjustments which are routine recurring adjustments reflected in the accompanying Sept. 30 financial statements which are necessary to present fairly such interim financial statements. Accounting Policy for Revenues and Costs of Sales Revenues are recognized at the time of product shipment. Cost of sales is computed using the "gross profit" method based upon historical results of operations. Other cost, included in costs of sales, are based upon such costs as actually incurred. Inventories Inventories are comprised of the following: * 9/30/98 12/31/97 Raw Materials $ 105,200 $ 80,746 Finished Goods & WIP $ 315,687 $ 254,342 Total Inventories $ 420,887 $ 335,088 *Allocation Based Upon Estimate Gain per Common Share The weighted average number of shares of common stock outstanding used in computing gain per share does not include the effect of the conversion of the stock options as the exercise price exceeds the current market value of the security. The following schedule sets forth the number of shares used in computing earnings per share: Period of Nine Months Ended Sept. 30 1998 1997 Assuming no dilution Common Stock Outstanding, October 31, 9,557,561 9,297,561 Shares held in Treasury 16,445 16,445 Total Shares Authorized 12,000,000 12,000,000 - --- PART I FINANCIAL INFORMATION ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the nine months ended September 30, 1998, the Company recorded sales of $1,911,049 compared to $1,609,146 for the nine months ended September 30, 1997. At September 30, 1998 the Company had a backlog of $38,643 compared to $88,376 at September 30, 1997. Cost of sales as a percentage of sales decreased to 61.6% from 76.2% for the nine months ended September 30, 1998 and 1997, respectively.This decrease is due to the reduction of new product development. For the period of nine months ended September 30, 1998, selling, general and administrative expenses increased by $74,217 over the period of nine months ended September 30, 1997. YEAR 2000 READINESS 1a. The company's state of readiness on manufactured products: Synergistics uses standard materials, available from multiple sources, in manufacturing their products. This insures that fair prices are obtained for purchased components and also that compliant vendors will be available when Y2K difficulties are experienced by non compliant vendors. A survey of all vendors for Y2K compliance is currently being conducted to assure a successful entry into the year 2000. Synergistics manufactured products include security systems which operate as non IT systems, (microprocessors), and IT systems (personal computers). Y2K testing of all manufactured systems was concluded in 1998 and a series ofletters was generated as a response to Synergistics customers and dealers who inquire about Y2K compatibility issues for Synergistics systems that they had purchased or installed. These letters offered several options to the customers depending on the systems purchased. These options answered the Y2K compatibility issue with the following responses: 1. That the equipment purchased was Y2K compatible with no further changes. 2. That the firmware of the equipment needed to be upgraded to become Y2K compatible. 3. That the software of the equipment needed to be upgraded to become Y2K compatible. 4. That the equipment was not Y2K compatible but an upgrade path to another Synergistics system was recommended to bring the system into compliance while retaining the use of many of the systems components and installation wiring to keep costs down. 1b. The company's state of readiness on internally used systems: Synergistics uses computer software to manage it's accounting. This includes Accounts Receivable, Accounts Payable and General Ledger. The system being used is Y2K compliant. Synergistics also uses computer software to maintain inventory control for manufacturing. This system is not yet Y2K compliant but will be changed to a Y2K compliant system prior to the year 2000. Other computer software is used at Synergistics to development software for sale. Our engineers are always observant of Y2K compatibility in software used for product development and every effort is made to see that any compatibility issues are resolved. In conclusion, Y2K issues and their solutions have been a part of Synergistics since 1997. All issues have been either solved or have a planned solution. Costs remaining to handle unresolved Y2K issues as of yet are estimated to be less than $5000. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS There are currently no pending legal proceedings to which the Company is a party or to which any of its property is subject. ITEM 2. CHANGE IN SECURITIES There have been no changes in the instruments defining the rights of holders of any class of securities of the Company during the first nine months of calendar year 1998. ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS A Special meeting in lieu of an annual meeting was held on May 28, 1998. William Tetrick, Dave Longworth, Larry Bishop, Thomas Gehman and Robert Pogorelc were re-elected as directors. A vote was taken to approve Livingston & Haynes, P.C. to continue as auditors for the coming year. ITEM 4. EXHIBITS AND FORM 8-K None. Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf, the undersigned thereunto being duly authorized. DATE January 23, 1999 BY/S/DAVID S. LONGWORTH David S. Longworth President and Clerk EX-27 2
5 9-MOS DEC-31-1997 SEP-30-1997 69,648 0 522,573 0 420,887 22,761 152,227 93,667 1,912,205 496,388 0 0 0 95,576 1,320,241 1,912,205 1,911,049 2,009,200 1,176,747 1,176,747 0 0 0 88,746 0 0 0 0 0 88,746 0.00 0.00
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