<PAGE>
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 1996
________________
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: 1-12856
_________________________________________________________
SYNERGISTIC HOLDINGS CORP.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 42-1358036
- -------------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
50 Laser Court, Hauppauge, New York 11788
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(506) 436-5000
- --------------------------------------------------------------------------------
(Issuer's telephone number)
405 Sixth Avenue, Suite 200, Des Moines, Iowa 50309 - December 31
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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
The number of shares of Common Stock of the issuer outstanding as of December
15, 1996 was 9,187,260.
<PAGE>
SYNERGISTIC HOLDINGS CORP.
INDEX TO 10-Q Page
PART I. FINANCIAL INFORMATION
ITEM 1
Condensed Combined Consolidated Balance Sheets
October 31, 1996 and April 30, 1996 ........................ 3
Condensed Combined Consolidated Statements of Operations
Three Months Ended October 31, 1996 and 1995
Six Months Ended October 31, 1996 and 1995 ................. 4
Condensed Combined Consolidated Statement of Stockholders' Equity
(Capital Deficit)
Six Months Ended October 31, 1996 .......................... 5
Condensed Combined Consolidated Statements of Cash Flows
Six Months Ended October 31, 1996 and 1995 ................. 6
Notes to Financial Statements .................................... 7
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
- 2 -
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
SYNERGISTIC HOLDINGS CORP. AND SUBSIDIARIES AND AFFILIATE
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 31, April 30,
1996 1996
(Unaudited) (Unaudited)
-------------- --------------
<S> <C> <C>
Assets
Current Assets:
Cash 69,160 74,354
Accounts Receivable 3,152,340 3,217,809
Prepaid expenses & other 228,195 122,360
Refundable Income Taxes - 58,238
Total current assets 3,449,695 3,472,761
----------- ---------
Property and Equipment, Net 1,833,464 1,867,656
----------- ---------
Other:
Loan Receivable, officer, net of current portion - 1,004,212
Goodwill, Net 1,259,375 1,308,125
Noncompetition and Consulting Agreements, Net 236,667 150,000
Other 18,635 18,635
----------- ---------
Total other assets 1,514,677 2,480,972
----------- ---------
6,797,836 7,821,389
----------- ---------
Liabilities and Stockholders' Equity (Capital Deficit)
Current:
Bank Overdrafts 900,244 445,440
Note Payable - Finance company 1,816,885 1,456,443
Accounts Payable 3,152,659 3,323,193
Accrued Expenses & other 291,858 487,484
Current Portion of Long Term Debt 400,000 227,820
----------- ---------
Total current liabilities 6,561,646 5,940,380
----------- ---------
Long-term Debt & Capital Lease Obligations 1,764,116 1,049,969
Deferred income taxes 10,000 10,000
----------- ---------
Total liabilities 8,335,762 7,000,349
----------- ---------
Stockholders' Equity (Capital Deficit):
Preferred Stock - Series A, $.01 par value - 743,049 -
Shares authorized 20,000, issued and outstanding
6,500 (liquidation preference $100 per share)
Preferred Stock - Series B, $.01 par value - 10 -
Shares authorized issued and outstanding 1,000
Common Stock 91,873 79,000
Additional Paid-In-Capital 2,438,663 3,951,546
Deficit & Proprietor's Capital Deficiency (4,311,521) (3,209,506)
Less: Note receivable (500,000) -
----------- ---------
Total Stockholder's Equity (Capital Deficit) (1,537,926) 821,040
----------- ---------
6,797,836 7,821,389
=========== =========
</TABLE>
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<PAGE>
SYNERGISTIC HOLDINGS CORP. AND SUBSIDIARIES AND AFFILIATE
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
10/31/96 10/31/95 10/31/96 10/31/95
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------- -------------- ------------ -----------
<S> <C> <C> <C> <C>
Net Sales 5,556,074 6,864,833 11,276,595 13,179,440
Cost of Sales 4,599,819 5,771,622 9,228,748 10,957,510
---------- ---------- ---------- ----------
Gross Profit 956,255 1,093,211 2,047,847 2,221,930
---------- ---------- ---------- ----------
Selling, General & Administrative Expenses 1,416,967 2,082,358 2,665,091 3,319,397
---------- ---------- ---------- ----------
Operating Loss (460,712) (989,147) (617,244) (1,097,467)
---------- ---------- ---------- ----------
Interest expense, net (147,322) (95,713) (219,722) (204,659)
(Loss) before taxes on income (608,034) (1,084,860) (836,966) (1,302,126)
---------- ---------- ---------- ----------
Provision for income taxes - - - -
Net loss (608,034) (1,084,860) (836,966) (1,302,126)
========== ========== ========== ===========
Accretion of preferred stock dividends attributable
to increase to conversion value 265,049 - 265,049 -
========== ========== ========== ===========
Net loss attributable to common stockholders (873,083) (1,084,860) (1,102,015) (1,302,126)
========== ========== ========== ===========
Net loss per share (.08) (.10) (.10) (.15)
Weighted average shares outstanding 10,914,408 10,635,563 10,774,986 8,923,238
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
SYNERGISTIC HOLDINGS CORP. AND SUBSIDIARIES AND AFFILIATE
CONDENSED COMBINED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (CAPITAL DEFICIT)
Preferred Stock Preferred Stock Common Stock
Series A Series B ($.01 par) ($.01 par)
--------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, April 30, 1996 _ $ _ $ 7,900,000 $79,000
Acquisition and constructive retirement of treasury - - (1,453,600) (14,536)
stock purchased from principal shareholder
Reverse stock split - 1,000 10 (715,550) 7,155
Acquisition of Synergistic Holdings Corp. and - - 3,465,410 34,564
constructive retirement of treasury stock
Private placement of preferred stock and warrants 6,500 478,000 - - -
net of related expenses
Accretion of preferred stock to conversion value - 265,049 - - -
Net loss for the period - - - - -
--------------------------------------------------------------------------------
Balance, October 31, 1996 6,500 $743,049 1,000 $10 9,187,260 $91,873
================================================================================
</TABLE>
(RESTUBBED FROM TABLE ABOVE)
<TABLE>
<CAPTION>
Deficit and
Additional Proprietor's
Paid-In Capital Less: Note
Capital Deficiency Receivable Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, April 30, 1996 $3,951,546 $(3,209,506) - $821,040
Acquisition and constructive retirement of treasury (1,985,464) - - (2,000,000)
stock purchased from principal shareholder
Reverse stock split 7,145 - - -
Acquisition of Synergistic Holdings Corp. and 465,436 (500,000) -
constructive retirement of treasury stock
Private placement of preferred stock and warrants - - - 478,000
net of related expenses
Accretion of preferred stock to conversion value - (265,049) - -
Net loss for the period - (836,966) - (836,966)
--------------------------------------------------------------------------------
Balance, October 31, 1996 $2,438,663 $(4,311,521) $(500,000) $(1,537,926)
================================================================================
</TABLE>
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<PAGE>
SYNERGISTIC HOLDINGS CORP. AND SUBSIDIARIES AND AFFILIATE
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months Six months
ended ended
10/31/96 10/31/95
(Unaudited) (Unaudited)
------------ -------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (Loss) (836,966) (1,302,126)
Adjustments to reconcile net (loss) to net cash
used in operating activities:
Depreciation and Amortization 151,427 147,779
Compensation related to sale of shares - 786,546
Increase (decrease) in cash flows from changes
operating assets and liabilities
Accounts Receivable 65,469 71,389
Prepaid expenses & other (105,835) (63,439)
Refundable Income taxes 58,238 96,701
Other assets - 1,000
Accounts Payable (170,534) (325,522)
Accrued Expenses & other (222,398) 94,562
---------- ----------
Net Cash used in operating activities (1,060,599) (493,110)
---------- ----------
Cash Flows From Investing Activities:
Capital Expenditures (35,152) (2,449)
Loan To Officer (55,086) (440,688)
---------- ----------
Net Cash used in investing activities (90,238) (443,137)
---------- ----------
Cash Flows From Financing Activities:
Change In Bank Overdrafts 454,804 242,495
Net proceeds from (repayments of )-note payable-finance
company 360,442 10,495
Principal Payments of L/T Debt and Capital Leases (147,603) (110,632)
Net Proceeds from issuance of common stock - 1,232,000
Net Proceeds from issuance of preferred stock and
warrants 478,000 -
---------- ----------
Net Cash provided by financing activities 1,145,643 1,374,358
---------- ----------
Net increase (decrease) in Cash (5,194) 438,111
Cash, at beginning of period 74,354 54,915
---------- ----------
Cash, at end of period 69,160 493,026
---------- ----------
</TABLE>
Noncash investing and financing activities:
Immediately prior to the closing of the merger of Synergistic and Salex, the
Company acquired treasury stock from a principal stockholder for the purchase
price of $2,000,000, which was paid by the issuance of two promissory notes.
Subsequently, the stockholder agreed to offset approximately $1,000,000 of
these notes against the Company's loan receivable from him.
On September 19, 1996, the Company closed on a merger with Salex, the details of
which are described in the Notes to Condensed Combined Consolidated Financial
Statements.
Effective at the merger date, the Company acquired from its principal
stockholder the real estate of its principal place of business, subject to the
related mortgage obligation, in exchange for a reduction of certain loans
receivable from the stockholder. Prior to the merger date, combined financial
statements were presented in order to reflect the real estate operations for all
periods reported.
- 6 -
<PAGE>
NOTES TO CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited Combined Consolidated Financial
Statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for interim periods are not
necessarily indicative of the results that may be expected for the entire year.
For further information, refer to the consolidated financial statements and
notes thereto to be filed with the Company's Form 8-K/A.
2. Per share data is determined based on the weighted average number of
common shares outstanding for the period. Common shares issued during the period
are treated as outstanding from the trade date of issuance. The weighted average
number of common shares outstanding has been retroactively adjusted for the
stock split that was effected in connection with the merger described in Note 2.
The terms of the convertible preferred stock, Series B issued in the split are
such that the preferred stock is in substance common stock. Accordingly, the
common stock issuable upon conversion of this preferred stock has been included
in the weighted average number of common shares outstanding for all periods
presented. Common stock equivalents relating to the convertible preferred stock,
Series A, and to stock options and warrants have been excluded in determining
per share data as they are antidilutive.
3. In August 1995, Synergistic Holdings Corp. (the "Company")
purchased from Salex Holding Corporation, a Delaware corporation ("Salex"), an
unrelated privately owned company, 1,580,000 shares of Salex common stock (which
represented a 20% common equity interest) for a purchase price of $1,500,000.
In January 1996, the Company purchased an additional 363,400 shares of
Salex common stock (representing a 4.6% common equity) directly from one of the
principal stockholders of Salex for a purchase price of $500,000.
On September 19, 1996 (the "Closing"), the Company's wholly-owned
subsidiary, Salex Industries, Inc., a Delaware corporation ("Subsidiary"),
consummated the merger contemplated by the Merger Agreement, dated June 27,
1996, as amended and restated on September 18, 1996 (the "Merger Agreement), by
and among the Company, Subsidiary, Salex, Salex Fleet Specialist Corp., a New
York corporation, Salex Fleet Management Corp., a New York corporation, Salex
National Account Corp., a New York corporation, Salex Salvage Disposal Corp., a
New York corporation, Salex Financial Services Corp., a New York corporation
(collectively, the "Salex Subsidiaries"), Salvatore Crimi ("Crimi"), the
Salvatore Crimi Family Limited Partnership, Pershing Sun, Michael Sun, Jennifer
Sun, Susan Tauss- Giovinco, Francis Fitzpatrick and Harrison Fitzpatrick
(collectively, the "Salex Stockholders") and T.
Marshall Swartwood and Thomas M. Swartwood.
Pursuant to the Merger Agreement, Subsidiary was merged with and into
Salex and (i) all of the shares of common stock of Salex (the "Salex Common
Stock") held by the Company were cancelled and extinguished and (ii) all of the
4,503,000 issued and outstanding shares of Salex Common Stock owned by the Salex
Stockholders were converted into (a) 4,003,165 shares of common stock, par value
$.01 per share, of the Company ("Synergistic Common Stock") and (ii) 1,000
shares of Series B Convertible Preferred Stock ("Synergistic Preferred Stock").
Upon the filing by the Company of a Certificate of Amendment to its Certificate
of Incorporation increasing the authorized capital stock of the Company, each
share of Synergistic Preferred Stock shall be converted into 2,059.106 shares of
Synergistic Common Stock. The shares of Synergistic Common Stock delivered at
the closing, together with the shares of Synergistic Common Stock into which the
shares of Synergistic Preferred Stock are convertible, represented, in the
aggregate, 51% of the fully-diluted, issued and outstanding shares of the
Synergistic Common Stock.
Salex, through the Salex Subsidiaries, provides automobile asset
management services and manages, on a nationwide basis, the maintenance and
repair of fleets of automobiles and small trucks which are owned, leased and
operated by corporate customers (the "Business"). Following the Merger, the
Company changed its principal place of business from 405 Sixth Avenue, Des
Moines, Iowa to 50 Laser Court, Hauppauge, New York.
- 7 -
<PAGE>
I. Actions Taken Immediately Prior to the Closing.
Immediately prior to the Closing, Crimi sold to the Company
1,453,600 shares of Salex Common Stock owned by him for the purchase price of
$2,000,000 which was paid by the issuance of the Company of two promissory notes
- - one for $1,055,562.19 and one for $944,437.81. Subsequently, Crimi agreed to
offset approximately $1 million of these notes against the Company's loan
receivable from him.
II. Actions Taken Immediately After the Closing.
Immediately after the Closing, the Company and Dickinson
Holding Corporation ("Dickinson"), a Delaware corporation, entered into (i) a
Stock and Asset Purchase Agreement pursuant to which the Company sold (the
"Divestiture") of (x) all of the outstanding shares of its subsidiary, Dickinson
& Co., Inc., a registered broker/dealer and (y) its investment in Electronic
Designs, Inc. ("EDIX"); (ii) an Indemnification Agreement whereby Dickinson is
obligated to indemnify and hold the Company harmless from and against any and
all liabilities (including any alleged or threatened claims) relating to or
arising out of, or in any matter related to (a) the ownership, operation or
conduct of Dickinson & Co., Inc. and/or the EDIX Assets (as defined in the
Indemnification Agreement) and any liability under the EDIX Notes (as defined in
the Indemnification Agreement), (b) the profit participation agreements between
the Company and the holders of the EDIX Notes, and (c) any other obligation or
liability arising in connection with the solicitation and issuance of the EDIX
Notes, in each case, whether occurring prior to or after the Divestiture (the
"Divestiture Liabilities") and for all losses or damages incurred by the Company
with respect to the Divestiture Liabilities and (iii) a Tax Indemnity Agreement
pursuant to which Dickinson has agreed to reimburse the Company for 50% of any
Additional Income Taxes (as defined in the Tax Indemnity Agreement) paid as a
result of the Divestiture. As consideration for the stock and assets that were
transferred pursuant to the Divestiture, Dickinson transferred to the Company
750,000 shares of its Synergistic Common Stock and a $500,000 promissory note
(the "Divestiture Promissory Note") secured by 250,000 shares of its Synergistic
Common Stock pursuant to a Pledge Agreement between Dickinson and the Company.
Dickinson is owned by T. Marshall Swartwood and Thomas M. Swartwood who were
directors and officers of Synergistic.
III. Actions Taken Simultaneously with the Closing
1. All of the officers of the Company resigned, effective as of the
Closing. The following persons were appointed to the positions set forth
opposite their names:
Salvatore Crimi - Chief Executive Officer and Chairman of the Board
Jeffrey Dickson - Chief Operating Officer and President
Pershing Sun - Senior Vice President and
Chief Information Officer
Chris Cucuzza- Chief Accounting Officer
Angelo Crimi - Secretary
- 8 -
<PAGE>
2. The Company increased the authorized number of directors
constituting the Board of Directors to seven (7) members and the following were
elected as directors: Richard Belz, Crimi, Jeffrey Dickson, Angelo Crimi,
Pershing Sun, Thomas Swartwood and Francis Fitzpatrick. Crimi was nominated and
appointed Chairman of the Board.
3. Each issued and outstanding share of 8.5% Series A Preferred
Convertible Stock of Salex, liquidation value $100 per share ("Salex
Preferred"), and each warrant of Salex, exercisable for one share of Salex
Common Stock ("Salex Warrants"), was converted into an identical share of
preferred stock of the Company, in the case of the Salex Preferred, and into a
warrant of the Company bearing identical terms and conditions as the Salex
Warrants.
4. The Company granted Crimi an option to purchase 500,000 shares
of Synergistic Common Stock at an exercise price of $1.50 per share, with a
three-year term and exercisable in the event that the net income of the Company
(before taxes) equals or exceeds $2.7 million for the year ended April 30, 1997.
Crimi's option (and the underlying common stock) has piggy-back registration
rights.
5. The Company granted options to the Salex Stockholders to
purchase 179,333 shares of Synergistic Common Stock at an exercise price of
$2.125 per share. The options are exercisable 20% per year over the next five
years. The options granted thereunder (and the underlying common stock) have
piggy-back registration rights.
6. The Salex Stockholders entered into a Registration Rights
Agreement with the Company, granting them registration rights with respect to
the shares of Synergistic Common Stock they received pursuant to the Merger.
7. The Company assumed the mortgage of Salex and released Crimi
from any obligation he may have with respect to such mortgage.
8. The Registrant also assumed from Salex (i) its employment
agreement with Crimi and (ii) its employment agreement with Pershing Sun.
Since the merger resulted in voting control by the stockholders of
Salex, the merger transaction has been accounted for as a recapitalization of
Salex followed by an issuance of common stock by Salex in exchange for treasury
stock and Synergistic's nonrecourse note receivable. The note receivable,
because it is nonrecourse and is collateralized by common stock, has been
recorded as a reduction of stockholders' equity.
As a result of the merger, Salex is the continuing entity for
financial reporting purposes, and the financial statements prior to September
19, 1996 represent its combined consolidated financial position and results of
operations. The accounts of Synergistic are included from September 19, 1996.
- 9 -
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
RESULTS OF OPERATIONS
Net sales of $5,556,000 and $11,277,000 for the three and six
months ended October 31, 1996 decreased by 19.1% and 14.4%, respectively, from
$6,865,000 and $13,179,000, respectively in the comparable prior year periods.
Core operations is the primary area of the reduction, as it represents over 90%
of all sales. The Company lost three substantial corporate fleet customers as a
result of such customers' decisions to bring work in-house and to reorganize the
structure of the way the companies provided services. The loss of these
corporate fleet customers is the main factor of the decline in sales.
The Company's gross margin increased to 17.2% for the three months
ended October 31, 1996 and 18.2% for the six months ended October 31, 1996
compared to 15.9% and 16.9% in the comparable prior year periods. The increase
in gross margin was primarily due to the fact that one of the corporate fleet
customers that was lost yielded a significantly lower gross margin than the
remainder of the Company's revenue base.
Selling, general and administrative expenses for the three months and
six months ended October 31, 1996 decreased to $1,417,000 and $2,665,000
respectively, from $2,082,358 and $3,319,000, respectively, in the comparable
prior year periods. The decreases are attributable to significant expenditures
incurred in the prior year in order to implement the Company's plans for the
development of services and products to be provided to insurance companies,
financial institutions, and retail consumers.
Interest expense increased to $147,000 and $220,000 for the three and
six month ended October 31, 1996, respectively, from $96,000 and $205,000,
respectively, in the comparable prior year periods due primarily to increased
levels of bank debt.
Accretion of preferred stock dividends of $265,049 was recorded for the
three months and six months ended October 31, 1996. The convertible preferred
stock, Series A, is convertible to common stock valued at twice the liquidation
preference of the preferred stock, at any time after December 31, 1996. Based on
the preferred stock outstanding at October 31, 1996, total accretion of $650,000
will be recorded, of which $265,049 was reflected during the quarter ended
October 31, 1996 and the remaining $384,951 will be recorded in the quarter
ending January 31, 1997. The effect of such accretion is to increase the loss
attributable to the common stockholders for the purpose of calculating net loss
per share.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $1,061,000 for the six
months ended October 31, 1996 compared with 493,110 for the comparable prior
year period. The increase in net cash used in operations was from changes in
prepaid expenses, accounts payable and accrued expenses and compensation expense
in the prior year relating to the sale of shares.
Cash used in investing activities for the six months ended October 31,
1996 totaled $90,000 compared with $443,000 for the comparable prior year
period. Net cash used in investing activities decreased due to a reduction
in loans to officers in the current period.
Net cash provided by financing activities was $1,146,000 for the six
months ended October 31, 1996 compared with $1,374,000 provided by financing
activities for the comparable prior year period. The activity for the six months
ended October 31, 1996 relates primarily to the sale of preferred stock and
increased bank borrowings. In November 1996, the Company sold additional
preferred stock, Series A and warrants, and received net proceeds of $401,000.
The Company has suffered losses during the 1996-1997 fiscal year and
has negative working capital. The Company has limited availability under its
existing credit facility and the Company will need additional capital to have
sufficient liquidity and meet its working capital and capital expenditure needs
for the foreseeable future. There can be no assurance that the Company will be
successful in obtaining additional capital.
As a result of the accounting treatment of the merger transaction
the Company is required to meet initial listing requirements of the Nasdaq Stock
Market. The Company may not be able to meet these requirements, and, therefore,
may be subject to the delisting of its securities from such exchange.
- 10 -
<PAGE>
PART II. OTHER INFORMATION
ITEM 6 Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 2.1* - Amended and Restated Merger Agreement, dated as
of September 19, 1996, by and among the Company, the
Subsidiary, Salex, the Salex Subsidiaries, the Salex
Stockholders, Thomas M. Swartwood and T.
Marshall Swartwood.
Exhibit 2.2* - List of Omitted Schedules/Exhibits to Merger
Agreement.
Exhibit 2.3* - Promissory Note issued by the Company to Crimi
for $1,055,562.19 dated September 18, 1996.
Exhibit 2/4* - Promissory Note issued by the Company to Crimi
for $944,437.81 dated September 18, 1996.
Exhibit 2.5* - Amendment to Promissory Notes dated September
18, 1996.
Exhibit 2.6* - Stock and Asset Purchase Agreement between the
Company and Dickinson dated September 18, 1996.
Exhibit 2.7*. - Indemnification Agreement between the
Company and Dickinson dated September 18, 1996.
Exhibit 2.8* - Tax Indemnity Agreement among the
Company, Dickinson and Dickinson & Co., Inc. dated
September 18, 1996.
Exhibit 2.9* - The Divestiture Promissory Note issued by
Dickinson to the Company dated September 18, 1996.
Exhibit 2.10* - Stock Pledge and Security Agreement between
the Company and Dickinson dated September 18, 1996.
Exhibit 2.11* - Stock Option Agreement between Crimi and the
Company dated September 18, 1996.
Exhibit 2.12* - Stock Option Agreement among the Salex
Stockholders and the Company dated September 18, 1996.
Exhibit 2.13* - Form of Registration Rights Agreement among
each of the Salex Stockholders and the Company dated September
18, 1996.
Exhibit 2.14* - Assumption by the Company of Salex's Mortgage
dated September 18, 1996.
Exhibit 2.15* - Assumption by the Company of Salex's
Employment Agreement with Crimi.
Exhibit 2.16* - Assumption by the Company of Salex's
Employment Agreement with Pershing Sun.
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
On October 4, 1996 the Registrant filed a report on Form 8-K
reporting events under Items 1, 2 and 5. The Registrant has
not yet filed its financial statements or pro forma financial
information under Item 7 of such report.
* Incorporated by reference to the Company's Form 8-K filed on October 4, 1996.
- 11 -
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SYNERGISTIC HOLDINGS CORP.
Date: January 20, 1996 By: /s/ Salvatore Crimi
------------------------------
Salvatore Crimi
Chief Executive Officer
Date: January 20, 1996 By: /s/ Jeffrey Dickson
-------------------------------
Jeffrey Dickson
(as Chief Accounting Officer
and Chief Financial Officer)
- 12 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
AT OCTOBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> APR-30-1996
<PERIOD-END> OCT-31-1996
<CASH> $69
<SECURITIES> 0
<RECEIVABLES> 3,309
<ALLOWANCES> 157
<INVENTORY> 0
<CURRENT-ASSETS> 3,450
<PP&E> 3,219
<DEPRECIATION> 1,385
<TOTAL-ASSETS> 6,798
<CURRENT-LIABILITIES> 6,562
<BONDS> 0
0
743
<COMMON> 92
<OTHER-SE> (2,373)
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</TABLE>
