SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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: 33-15097-D
SYNAPTIX SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-10457105
(State or other Jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2450 South Shore Boulevard, Suite 210, League City, Texas 77573
- -----------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (281) 334-0708
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
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
stock as of the latest practicable date.
Common Stock, $.003 Par Value 1,490,367
------------------------------
(Shares outstanding as of May 15, 1997)
Transitional Small Business Disclosure Format (Check One) Yes No [X]
1
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
QUARTERLY REPORT ON FORM 10-QSB FOR THE INTERIM
PERIOD ENDED MARCH 31, 1997
TABLE OF CONTENTS
Page
Number
Part I. Financial Information
Item I. Financial Statements
Balance Sheets at March 31, 1997 and June 30, 1996................. 3
Statements of Operations for the Nine Months Ended March 31, 1997
and 1996............................................................4
Statements of Changes in Stockholders' Deficit for the Year Ended
June 30, 1996 and the Nine Months Ended March 31, 1997..............5
Statements of Cash Flows for the Nine Months Ended March 31,
1997 and 1996.......................................................6
Notes to Financial Statements.......................................7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations...............................................7
Part II.Other Information
Item 6. Exhibits and Reports on Form 8-K....................................8
Signatures..........................................................9
2
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SYNAPTIX SYSTEMS CORPORATION
Balance Sheets
<TABLE>
<CAPTION>
March 31, 1997 June 30, 1996
(Unaudited) (Audited)
----------------- -----------------
ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 3,733 $ 0
----------------- -----------------
Total Current Assets 3,733 0
----------------- -----------------
Total Assets $ 3,733 $ 0
================= =================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities $ 59,216 $ 28,009
Loans payable 37,100 13,200
Income taxes payable 0 0
----------------- -----------------
Total Current Liabilities 96,316 41,209
Stockholders' Deficit:
Preferred Stock - $1 par value 10,000,000 shares authorized; -0- shares of
Series A Voting Preferred Stock outstanding at March 31, 1997 and
174,865 shares
issued and outstanding at June 30, 1996 0 174,865
Common Stock - $.003 par value, 25,000,000 shares authorized; 1,490,367
shares issued and outstanding at March 31, 1997 and 39,668 shares
issued and outstanding at June 30, 1996 4,471 119
Additional paid-in capital 4,805,894 4,610,729
Retained earnings (deficit) (4,902,948) (4,826,922)
----------------- -----------------
Total Stockholders' Deficit ( 92,583) (41,209)
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 3,733 0
================= =================
</TABLE>
See Accompanying Notes to the Financial Statements.
3
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
1997 1996
(Unaudited) (Unaudited)
----------------- -----------------
<S> <C> <C>
REVENUES $ 0 $ 0
Cost and Expenses:
General and administrative expenses 76,026 69,403
Interest 0 81
----------------- -----------------
Total Costs and Expenses 76,026 69,484
----------------- -----------------
Income (loss) from Continuing Operations: (76,026) 0
Income tax expense (benefit) 0 0
Investment income (loss) 0 3
----------------- -----------------
Income (loss) before income (76,026) (69,481)
------------------ ------------------
Income tax expense (benefit) 0 ( 3,299)
----------------- ------------------
Income (loss) before discontinued operations 0 (66,182)
Net Income (Loss) $ (76,026) $ (66,182)
================== =================
Income (loss) per share (continuing operations) $ (.14) $ (1.80)
Income (loss) per share (discontinued operations) .00 .00
----------------- -----------------
Income (Loss) Per Share $ (.14) $ (1.80)
================= =================
</TABLE>
See Accompanying Notes to the Financial Statements.
4
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
STATEMENT OF STOCKHOLDERS' DEFICIT
For Year Ended June 30, 1996 (audited) and
For the Nine Months Ended March 31, 1997
(unaudited)
<TABLE>
<CAPTION>
Additional Retained Total
Common Preferred Paid-in Earnings Stockholders'
Shares Amount Shares Amount Capital (Deficit) Deficit
------------- ------------- -------------- ------------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at June 30,
1996 39,668 $ 119 174,865 $ 174,865 $ 4,610,729 $ (4,826,922) $ (41,209)
Sale of restricted common
stock for cash 1,217,500 3,652 0 0 0 0 3,652
Issuance of restricted
common stock for
expenses 58,334 175 0 0 20,825 0 21,000
Issuance of common
shares for preferred
shares 174,865 525 (174,865) (174,865) 174,340 0 0
Net loss 0 0 0 0 0 (76,026) (76,026)
------------- ------------- -------------- ------------- ------------- -------------- -------------
Balances at March
31, 1997 1,490,367 $ 4,471 0 $ 0 $ 4,805,894 $ (4,902,948) $ (92,583)
============= ============= ============== ============= ============= =============== =============
</TABLE>
See Accompanying Notes to the Financial Statements.
5
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
1997 1996
------------------ ------------------
CASH FLOWS OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ ( 76,026) $ ( 66,182)
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Stock issued for expenses 21,000 0
Changes in Assets and Liabilities:
Income taxes payable 0 (3,299)
Accounts payable 31,207 15,637
------------------ ------------------
Net Cash Required by Operating Activities (23,819) (53,844)
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock 3,652 40,000
Loan proceeds 23,900 13,200
------------------ ------------------
Net Cash Provided by Financing Activities 27,552 53,200
------------------ ------------------
Net Increase (decrease) in Cash 3,733 (644)
CASH AT BEGINNING OF YEAR 0 644
------------------ ------------------
CASH AT END OF PERIOD $ 3,733 $ 0
================== ==================
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 0 $ 235
Income taxes paid 0 0
------------------ ------------------
$ 0 $ 235
================== ==================
</TABLE>
See Accompanying Notes to the Financial Statements.
6
<PAGE>
SYNAPTIX SYSTEMS CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
1. Basis of Presentation
The financial statements of Synaptix Systems Corporation (the "Company"),
included herein, are unaudited for all periods ended March 31, 1997 and 1996.
They reflect all adjustments (consisting of normal recurring adjustments) which
are, in the opinion of management, necessary to fairly depict the results for
the periods presented. Certain information and note disclosures, normally
included in financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted pursuant to rules and
regulations of the Securities and Exchange Commission. It is suggested that
these financial statements be read in conjunction with the audited financial
statements for the years ended June 30, 1996 and 1995, which are included in the
Company's annual report. The Company believes that the disclosures made herein
are adequate to make the information presented not misleading.
2. Earnings per Common and Common Equivalent Share
Earnings per common and common equivalent share is based on the average
number of common shares and dilutive common share equivalents outstanding for
the nine months ended March 31, 1997 and 1996, adjusted for a 1-for-60 reverse
stock split which has been applied retroactively. The stock split was approved
by the shareholders on January 10, 1997.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The Company ceased all oil and gas operations in June 1994, following the
disposition of its oil and gas interests. The Company continues to seek
acquisitions and mergers in the area of computer related technologies.
Management believes that an acquisition of this nature will provide an
opportunity to enhance stockholder value.
Results of Operations
Analysis of Three Months ended March 31, 1997 Compared to Three Months
ended March 31, 1996
Costs and expenses for the three months ended March 31, 1997, were $29,976
and were associated with general and administrative expenses. General and
administrative expenses increased when compared to the same period in 1996, due
to management's restructuring the Company and positioning it to be able to
acquire assets to enter into the computer technology industry.
7
<PAGE>
Analysis of Nine Months ended March 31, 1997 Compared to Nine Months ended
March 31, 1996
Costs and expenses for the nine months ended March 31, 1997, were $76,026,
and were associated with general and administrative expenses. General and
administrative expenses increased when compared to the same period in 1996, due
to management's restructuring the Company and positioning it to be able to
acquire assets to enter into the computer technology industry.
Liquidity and Capital Resources
There were no recorded revenues for the nine months ended March 31, 1997.
For the period from June 30, 1996 through March 31, 1997 the Company's working
capital deficit increased approximately 125% when compared to the period ended
March 31, 1996. At March 31, 1996, the Company maintained a negative liquidity
position which is evidenced by negative working capital of $41,209. The Company
has no major capital commitments at the present time. Management continues to
review potential acquisition candidates in computer related technologies in its
endeavor to restructure the Company, increase the Company's current ratio and
liquidity, and generate capital which would provide cash flow for future
expansion.
PART II OTHER INFORMATION
Item 5. Other Information
1 The Amended and Restated Articles of Incorporation were filed with the
Office of the Secretary of State of the State of Colorado on April 9, 1997,
which changed the name from Basic Natural Resources, Inc. to Synaptix
Systems Corporation. A copy of the Amended and Restated Articles of
Incorporation were filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement on Form S-8, dated May 12, 1997, and
are incorporated herein by reference.
2. On May 12, 1997, the Company filed two Registration Statements on Form S-8
with the Securities and Exchange Commission for the implementation of
employee stock plans. The plans are identified as the Synaptix Systems
Corporation Employee Stock Compensation Plan and the Synaptix Systems
Corporation 1997 Incentive Stock Option Plan and Non-Statutory Stock Option
Plan, and are incorporated herein by reference.
3. The Company is currently preparing an offering under Regulation S and
anticipates raising $200,000. The proceeds from this offering will be used
for working capital requirements.
8
<PAGE>
4. On May 15, 1997, the Company entered into an Asset Purchase Agreement with
Swallen Investments, Inc., a Texas corporation, to purchase all of the
assets of Synaptix Systems Corporation (Old Synaptix), a defunct Florida
corporation, formerly in the business of software development. Old Synaptix
was not a predecessor of the Company. The assets include three software
programs of the assets being acquired which the Company intends to develop
and exploit. The assets were purchased for Three Million (3,000,000)
shares, par value $.003 per share, of the Company's common stock.
Item 6. Exhibits and Reports on Form 8-K
1. A report on Form 8-K was filed on January 10, 1997, to report the Change in
Control of Registrant. On December 24, 1996, Alan W. Harvey purchased
73,050,000 shares of the Common Stock, $.00005 par value, of Basic Natural
Resources, Inc. for the amount of $3,652.50. Alan W. Harvey currently holds
89.9% of the total outstanding voting securities. Alan W. Harvey was
elected Chairman of the Board, President and Chief Executive Officer
effective as of December 23, 1996.
2. A report on Form 8-K was filed on January 22, 1997, to report a change in
the recapitalization of the Company. At the Company's Annual Meeting of
Shareholders held on January 10, 1997, the Shareholders approved, by a
majority vote, a proposal for amendments to the Amended and Restated
Articles of Incorporation to (i) effect a one-for-sixty reverse split of
all issued and outstanding shares of Common Stock; change the par value of
the Common Stock from $.00005 to $.003, and reduce the number of authorized
shares of Common Stock from Five Hundred Thirty Six Million to Twenty Five
Million.
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.
SYNAPTIX SYSTEMS CORPORATION
Dated: May 19, 1997 By: /s/ Alan W. Harvey
-----------------------
Alan W. Harvey, Chairman, President
and Chief Executive Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Synaptix Systems Corporation March 31, 1997 financial statements and
is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000817125
<NAME> Synaptix Systems Corporation
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,733
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,733
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,733
<CURRENT-LIABILITIES> 96,316
<BONDS> 0
0
0
<COMMON> 4,471
<OTHER-SE> (97,054)
<TOTAL-LIABILITY-AND-EQUITY> 3,733
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 76,026
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (76,026)
<INCOME-TAX> 0
<INCOME-CONTINUING> (76,026)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (76,026)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
