<PAGE>
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 January 31, 1998.
[ ] 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
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SALEX HOLDING CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
Delaware 42-1358036
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State or other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
50 Laser Court, Hauppauge, New York 11788
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(Address of Principal Executive Offices)
</TABLE>
(516) 436-5000
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(Registrant's telephone number)
Synergistic Holdings Corp.
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(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 March
12, 1998 was 9,206,100.
<PAGE>
SALEX HOLDING CORPORATION
INDEX TO FORM 10-Q
PAGE
PART I. FINANCIAL INFORMATION
ITEM I.
Condensed Combined Consolidated Balance Sheets
January 31, 1998 and April 30, 1997 .............................3
Condensed Combined Consolidated Statements of Operations
Three Months Ended January 31, 1998 and 1997
Nine Months Ended January 31, 1998 and 1997 .....................4
Condensed Combined Consolidated Statements of Cash Flows
Nine Months Ended January 31, 1998 and 1997 .....................5
Notes to Financial Statements .....................................6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
ITEM 3. Quantitative and Qualitative Disclosures about Market Research
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
ITEM 2. Changes in Securities and Use of Proceeds
ITEM 3. Defaults Upon Senior Securities
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM I FINANCIAL STATEMENTS
SALEX HOLDING CORPORATION
AND SUBSIDIARIES AND AFFILIATES
CONDENSED COMBINED CONSOLIDATED
BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, 1998 April 30, 1997
---------------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 117,973 $ 125,769
Accounts Receivable, net 3,414,646 3,451,589
Prepaid expenses and other current assets 40,074 77,263
----------- -----------
Total Current Assets 3,572,693 3,654,621
----------- -----------
Property and Equipment, net 1,676,974 1,746,120
----------- -----------
Other Noncurrent Assets:
Goodwill, net 1,137,500 1,210,625
Noncompetition and consulting agreement, net 111,667 186,667
Other assets 48,635 48,635
----------- -----------
Total Other Noncurrent Assets 1,297,802 1,445,927
----------- -----------
TOTAL ASSETS $ 6,547,469 $ 6,846,668
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Bank overdraft $ 730,312 $ 471,236
Note payable - finance company 1,497,509 1,283,699
Accounts payable 4,113,082 4,161,585
Accrued expenses and other 229,476 487,260
Current portion of long-term debt 1,065,872 1,179,906
----------- -----------
Total Current Liabilities 7,636,251 7,583,686
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Long-Term Debt & Capital Lease Obligations 578,840 781,103
Deferred income taxes 10,000 10,000
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TOTAL LIABILITIES 8,225,091 8,374,789
----------- -----------
Stockholders' (Deficit) Equity:
Preferred stock - series A, $.01 par value - shares 737,387 737,387
authorized 20,000, issued and outstanding
10,625 (liquidation preference $100 per share)
Preferred stock - series B, $.01 par value - shares 10 10
authorized, issued and outstanding 1,000
Preferred stock - series C, $.01 par value - shares 250
authorized, issued and outstanding 25,000
Common stock, $.01 par value - shares 91,873 91,873
authorized 39,000,000 issued and outstanding 9,187,260
Additional Paid-in Capital 3,501,163 3,501,163
Accumulated deficit & proprietor's capital deficiency (5,508,305) (5,358,554)
Less: Note receivable (500,000) (500,000)
----------- -----------
Total stockholders (deficit) equity (1,677,622) (1,528,121)
----------- -----------
LIABILITIES AND STOCKHOLDERS' DEFICIT $ 6,547,469 $ 6,846,668
=========== ===========
</TABLE>
3
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SALEX HOLDING CORPORATION
AND SUBSIDIARIES AND AFFILIATES
CONDENSED COMBINED CONSOLIDATED
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
1/31/98 1/31/97 1/31/98 1/31/97
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 5,691,938 $ 5,656,733 $ 17,051,497 $ 16,933,328
Cost of Sales 4,620,532 4,584,198 13,796,485 13,812,946
------------ ------------ ------------ ------------
Gross Profit 1,071,406 1,072,535 3,255,012 3,120,382
Selling, General & Administrative Expenses 1,071,711 1,116,851 3,158,994 3,781,942
------------ ------------ ------------ ------------
Income (Loss) from Operations (305) (44,316) 96,018 (661,560)
Interest Expense, Net 107,686 102,389 245,769 322,111
------------ ------------ ------------ ------------
Income (Loss) before taxes on income (107,991) (146,705) (149,751) (983,671)
Provision for income taxes 0 0 0 0
------------ ------------ ------------ ------------
Net Income (Loss) $ (107,991) $ (146,705) $ (149,751) $ (983,671)
============ ============ ============ ============
Net Income (Loss) per Share of
Common Stock (0.01) (0.01) (0.01) (0.09)
============ ============ ============ ============
Weighted Average Common Shares
Outstanding 11,246,366 11,246,366 11,246,366 11,243,366
============ ============ ============ ============
</TABLE>
<PAGE>
SALEX HOLDING CORPORATION
AND SUBSIDIARIES AND AFFILIATES
CONDENSED COMBINED CONSOLIDATED
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
1/31/98 1/31/97
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) $(149,751) $(982,645)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 252,135 234,707
Increase (decrease) in cash flows from changes in
operating assets and liabilities:
Accounts receivable 36,943 (255,396)
Prepaid expenses and other current assets 37,189 66,951
Accounts payable (48,503) 567,447
Accrued expenses and other current liabilities (257,784) (296,457)
--------- ---------
Net cash provided by (used in) operating activities (129,771) (665,393)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (34,864) (34,594)
Increase in other assets -- --
Loan to officer, net of repayments -- (55,086)
--------- ---------
Net cash provided by (used in) investing activities (34,864) (89,680)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in bank overdraft 259,076 449,886
Net proceeds from (repayments of) note payable- 213,810 (258,423)
finance company
Principal payments on long-term debt (185,397) (250,815)
Payments on capital lease obligations (52,577) --
Payments on mortgage obligation (54,000) --
Proceeds from promissory note - Bank (24,323) --
Net proceeds from issuance of preferred stock & warrants -- 822,625
Net proceeds from issuance of preferred stock 250 --
--------- ---------
Net cash provided by (used in) financing activities 156,839 763,273
--------- ---------
Not increase (decrease) in cash (7,796) 8,200
Cash, at beginning of period 125,769 74,354
--------- ---------
Cash, at end of period $ 117,973 $ 82,554
========= =========
</TABLE>
<PAGE>
SALEX HOLDING CORPORATION
AND SUBSIDIARIES AND AFFILIATES
NOTES TO CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited Combined Consolidated Financial Statements
have been prepared 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.
Per share data is determined based on the weighted average number of
common and common equivalent shares outstanding. The calculation when
applicable takes into account the shares that may be issued upon exercise of
stock option and warrants, reduced by the shares repurchased with the funds
received from their exercise.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
Results of Operations
- ---------------------
Net sales of $5,692,000 and $17,051,000 for the three and nine months
ended January 31, 1998 increased by 0.1% and 0.1%, respectively, from
$5,657,000 and $16,933,300, respectively for the comparable prior year
periods. This was the result in increases in the Company's core operations
(mechanical repairs, glass replacement and auto rentals) as well as continued
growth in its insurance subrogation division and its MVR service.
The Company's gross margin was 18.8% for the three months ended January
31, 1998 and 19.1% for the nine months ended January 31, 1998 as compared to
18.9% and 18.4% respectively, for the comparable prior year periods. This
increase was attributable to increases in those areas which yield a higher
gross margin than that of other segments of its core business. Such
departments are subrogation, MVR reporting and fees charged for specialized
reports available to all fleet customers.
Selling, general and administrative expenses for the three and nine
months ended January 31, 1998 decreased to $1,071,711 and $3,158,994
respectively, from $1,116,851 and $3,781,942, respectively for the comparable
prior year periods. The 0.4% and 16.5% decreases were primarily attributable
to a 29.9% reduction in the Company's workforce. Such a reduction had a
corresponding effect on the Company's other administrative expenses which
resulted in decreases in across the board spending.
Interest expense decreased to $108,186 and $290,053 for the three and nine
months ended January 31, 1998, respectively, from $110,299 and $347,536,
respectively, for the comparable prior year periods. This was primarily due to
a decrease in our loan balance to our finance company, in addition to a
decrease on our capital lease obligations.
Liquidity and Capital Resources
- -------------------------------
Net cash used in operating activities was $129,771 for the nine months
ended January 31, 1998 as compared with $665,393 used in operations for the
comparable prior year period. This was primarily the result of an increase in
accounts payable and accounts receivable which was partially offset with
favorable net income of almost $832,000.
Cash used in investing activities for the nine months ended January 31,
1998 totaled $34,864 as compared with $89,680 for the comparable prior year
period. Net cash flows used in investing activities decreased due to a
reduction in loans to officers.
Net cash provided by financing activities was $156,839 for the nine
months ended January 31, 1998 compared with $763,273 for the comparable prior
year period. This was primarily the result of the Company selling Series A
preferred stock and warrants which resulted in net proceeds of $822,625. In
addition, there were increases in our bank overdraft as well additional
borrowings from our finance company.
The Company has negative working capital and has limited availability
under its existing credit facility and will need additional capital to have
sufficient liquidity and to meet its working capital needs for the foreseeable
future. It is the Company's intention to refinance its mortgage liability on a
short term basis. The Company expects to enter into a sale and leaseback
arrangement with respect to its property in the near future.
<PAGE>
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RESEARCH
Not Applicable.
PART 2. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
Not Applicable.
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
Not Applicable.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
The Company was required to make semiannual dividend payment of $4.25
to holders of its 8.5% Series A Convertible Preferred Stock (the "Series A
Preferred Stock") commencing October 1996. As of the date hereof the
Company has not made any payments to the holders of the Series A Preferred
Stock. As of the date of this report, the total arrearages with respect to
the dividends of the Series A Preferred Stock is approximately $45,000.00.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Annual Meeting of Shareholders
------------------------------
On December 29, 1997, the Company held its annual meeting of shareholders. At
such meeting the shareholders adopted proposals to, among other things, amend
the Company's Certificate of Incorporation to (ii) increase the number of shares
of Common Stock authorized thereunder from 10,000,000 shares to 39,000,000
(iii) change the name of the Company from Synergistic Holdings Corp. to Salex
Holding Corporation and (iv) to adopt a stock option plan and authorize the
maximum number of shares of common stock reserved for issuance upon exercise
of options granted under the plan.
At the annual meeting Andrew Lunetta and Syd Mandelbaum were elected
directors'. In addition, Salvatore Crimi, Angelo Crimi, Pershing Sun, Franklin
Pinter, and Francis Fitzpatrick were re-elected as directors. Mr. Lunetta
received 9,055,385 votes in favor of his nomination, and 1,773,085 votes
against his nomination. Mr. Mandelbaum received 9,055,385 votes in favor of
his nomination, and 1,773,085 votes against his nomination. Mr. S. Crimi
received 9,055,384 votes in favor of his re-election as director and, 1,773,086
votes against his re-election as director. Mr. A. Crimi received 9,055,385
votes in favor of his re-election as director, and 1,773,085 votes against his
re-election as director. Mr. Sun received 9,055,385 votes in favor of his
re-election as director, and 1,773,085 votes against his re-election as
director. Mr. Pinter received 9,055,385 votes in favor of his re-election as
director, and 1,773,085 votes against his re-election as director. Mr.
Fitzpatrick received 9,055,385 votes in favor of his re-election as director,
and 1,773,085 votes against his re-election as director.
With respect to the proposal to amend the Company's Certificate of
Incorporation to increase the number of shares of Common Stock authorized for
issuance thereunder 7,639,061 votes were cast in favor of the proposal, and
1,826,186 votes were cast against the proposal, and 8,600 votes abstained from
voting on the proposal. The amendment to the Company's Certificate of
Incorporation to increase the number of shares authorized for issuance
thereunder was filed with the State of Delaware in January 1998.
With respect to the proposal to amend the Company's Certificate of
Incorporation to change the name of the Company to "Salex Holding
Corporation," 9,024,884 votes were cast in favor of the proposal, and
1,793,686 votes were cast against the proposal, and 9,900 votes abstained from
voting on the proposal. The amendment to the Company's Certificate of
Incorporation to change the name of the Company to "Salex Holding Corporation"
was filed with the State of Delaware in February 1998.
With respect to the proposal to adopt the Company's stock option plan, 7,634,961
votes were cast in favor of the adoption, and 1,830,686 votes were cast against
the adoption, and 8,200 votes abstained from voting on the adoption.
<PAGE>
ITEM 5 OTHER INFORMATION
Readiness for the Year 2000
---------------------------
The Company has taken actions to make its systems, products and infrastructure
Year 2000 complaint. The Company is also beginning to inquire as to the status
of its key suppliers and vendors with respect to the Year 2000. The Company
believes it is taking the necessary steps to resolve Year 2000 issues,
however, there can be no assurance that a failure to resolve any such issue
would not have a material adverse effect. Management believes, based on
available information, that it will be able to manage its total Year 2000
transition without any material adverse effect on its business operations,
products or financial prospects.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 3 Articles of Incorporation, as amended
Exhibit 11 Statement re computation of per share earnings.
Exhibit 27 Financial data schedule.
EXHIBIT 11 - COMPUTATION OF PER SHARE EARNINGS
(b) The Company did not file any reports on Form 8-K during the
quarter for which this report is filed.
<PAGE>
SALEX HOLDING CORPORATION
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.
Date: March 16, 1997
SALEX HOLDING CORPORATION
----------------------------------------
(Registrant)
/s/ Salvatore Crimi
----------------------------------------
Chairman of the Board of Directors and
Chief Executive Officer and
Chief Financial Officer
<PAGE>
CERTIFICATE OF INCORPORATION
OF
DICKINSON HOLDING CORP.
FIRST: The name of the corporation is:
DICKINSON HOLDING CORP.
SECOND: The address of the Corporation's registered office
in the State of Delaware is 32 Loockerman Square, Suite L-100, in the City of
Dover, County of Kent, 19901. The name of its registered agent at such address
is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the laws
of the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of capital stock which
the Corporation shall have authority to issue is eleven million (11,000,000)
shares, of which ten million (10,000,000) shares shall be Common Stock, par
value $.01 per share, and one million (1,000,000) shares shall be Preferred
Stock, par value $.01 per share.
The Preferred Stock may be issued from time to time in one
or more series. The Board of Directors of the Corporation is hereby expressly
authorized to provide, by resolution or resolutions duly adopted by it prior
to issuance, for the creation of each such series and to fix the designation
and the powers, preferences, rights, qualifications, limitations and
restrictions relating to the shares of each such series. The authority of the
Board of Directors with respect to each series of Preferred Stock shall
include, but not be limited to, determining the following:
<PAGE>
(a) the designation of such series, the number of
shares to constitute such series and the stated value if
different from the par value thereof;
(b) whether the shares of such series shall have
voting rights, in addition to any voting rights provided by
law, and, if so, the terms of such voting rights, which may
be general or limited;
(c) the dividends, if any, payable on such series,
whether any such dividends shall be cumulative, and if so,
from what dates, the conditions and dates upon which such
dividends shall be payable, and the preference of relation
which such dividends shall bear to the dividends payable on
any shares of stock of any other class or any other series of
Preferred Stock;
(d) whether the shares of such series shall be
subject to redemption by the Corporation, and, if so, the
times, prices and other conditions of such redemption;
(e) the amount or amounts payable upon shares of
such series upon, and the rights of the holder of such
series in, the voluntary or involuntary liquidation,
dissolution or winding up, or upon any distribution of the
assets, of the Corporation;
(f) whether the shares of such series shall be
subject to the operation of a retirement of sinking fund
and, if so, the extent to and manner in which any such
retirement or sinking fund shall be applied to the purchase
or redemption of the shares of such series for retirement or
other corporate purposes and the terms and provisions
relating to the operation hereof;
2
<PAGE>
(g) whether the shares of such series shall be
convertible into, or exchangeable for, shares of stock of
any other class or any other series of Preferred Stock or
any other securities and, if so, the price or prices or the
rate or rates of conversion or exchange and the method, if
any, of adjusting the same, and any other terms and
conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be
effective while any shares of such series are outstanding
upon the payment of dividends or the making of other
distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of, the Common Stock or
shares of stock of any other class or any other series of
Preferred Stock;
(i) the conditions or restrictions, if any, upon
the creation of indebtedness of the Corporation or upon the
issue of any additional stock, including additional shares
of such series or of any other series of Preferred Stock or
of any other class; and
(j) any other powers, preferences and relative,
participating, optional and other special rights, and any
qualifications, limitations and restrictions, thereof. The
powers, preferences and relative, participating, optional
and other special
rights of each series of Preferred Stock, and the qualifications, limitations
or restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding. All shares of any one series of Preferred
Stock shall be identical in all respects with all other shares of such
3
<PAGE>
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereof shall be cumulative.
FIFTH: The name and address of the sole incorporator
are as follows:
Name Address
Ralph D. Mosley, Jr. 405 Lexington Avenue
New York, New York 10174
SIXTH: Unless required by law or determined by the chairman
of the meeting to be advisable, the vote by stockholders on any matter,
including the election of directors, need not be by written ballot.
SEVENTH: The Corporation reserves the right to increase or
decrease its authorized capital stock, or any class or series thereof, and to
reclassify the same, and to amend, alter, change or repeal any provision
contained in the Certificate of Incorporation under which the Corporation is
organized or in any amendment thereto, in the manner now or hereafter
prescribed by law, and all rights conferred upon stockholders in said
Certificate of Incorporation or any amendment thereto are granted subject to
the aforementioned reservation.
EIGHTH: The Board of Directors shall have the power at any
time, and from time to time, to adopt, amend and repeal any and all By-laws of
the Corporation.
NINTH: All persons who the Corporation is empowered to
indemnify pursuant to the provisions of Section 145 of the General Corporation
Law of the State of Delaware (or any similar provision or provisions of
applicable law at the time in effect), shall be indemnified by the Corporation
to the full extent permitted thereby. The foregoing right of indemnification
shall not be deemed to be exclusive of any other rights to which those seeking
4
<PAGE>
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise. No repeal or amendment
of this Article NINTH shall adversely affect any rights of any person pursuant
to this Article NINTH which existed at the time of such repeal or amendment
with respect to acts or omissions occurring prior to such repeal or amendment.
TENTH: No director of the Corporation shall be personally
liable to the Corporation or its stockholders for any monetary damages for
breaches of fiduciary duty as a director, provided that this provision shall
not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law; (iii) under Section 174 of the General
Corporation Law of the State of Delaware; or (iv) for any transaction from
which the director derived an improper personal benefit. No repeal or
amendment of this Article TENTH shall adversely affect any rights of any
person pursuant to this Article TENTH which existed at the time of such repeal
or amendment with respect to acts or omissions occurring prior to such repeal
or amendment.
The undersigned incorporator hereby affirms that the
statements made herein are true under penalties of perjury, and is hereby
executing this Certificate of Incorporation this 1st day of February, 1994.
/s/ Ralph D. Mosley, Jr.
------------------------------
Ralph D. Mosley, Jr.
5
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
OF
SYNERGISTIC HOLDINGS CORP.
INTO
DICKINSON HOLDING CORP.
- ------------------------------------------------------------------------------
Adopted in accordance with the provisions of
Section 253 of the Delaware General Corporation Law
- ------------------------------------------------------------------------------
DICKINSON HOLDING CORP., a Delaware corporation, desiring to
merge with SYNERGISTIC HOLDINGS CORP., a Delaware corporation, pursuant to the
provisions of Section 253 of the Delaware General Corporation Law, hereby
certifies as follows:
1. DICKINSON HOLDING CORP. is a corporation formed under
the laws of the State of Delaware (the "Corporation").
2. The Corporation is the owner of all of the outstanding
shares of each class of stock of SYNERGISTIC HOLDINGS CORP., a corporation
formed under the laws of the State of Delaware (the "Subsidiary").
3. On October 18, 1995, the Board of Directors of the
Corporation adopted the following resolutions to merge the Subsidiary into the
Corporation:
"WHEREAS, the Corporation owns 100% of the issued and
outstanding common stock of SYNERGISTIC HOLDINGS CORP., a Delaware corporation
(the "Subsidiary"); and
<PAGE>
WHEREAS, it is in the best interests of the Corporation to
enter into an Agreement and Plan of Merger with the Subsidiary providing for
the merger of the Subsidiary with and into the Corporation in order that all
the estate, property, rights, privileges and franchises of the Subsidiary
shall vest in and be possessed by the Corporation;
NOW, THEREFORE, be it:
RESOLVED, that the Board of Directors of the
Corporation hereby approves and adopts the following Plan of
Merger (the "Plan") between the Corporation and the
Subsidiary:
1. The name of the corporation proposing to merge is
SYNERGISTIC HOLDINGS CORP. (the "Subsidiary") and the name
of the surviving corporation is DICKINSON HOLDING CORP.
("Dickinson").
2. The Subsidiary shall merge into Dickinson and upon the
effective date of such merger the Subsidiary shall cease to
exist and shall no longer exercise its powers, privileges
and franchises subject to the laws of the State of Delaware.
Dickinson shall succeed to the property and assets of and
exercise all the powers, privileges and franchises of the
Subsidiary and shall assume and be liable for all of the
debts and liabilities, if any, of the Subsidiary.
3. The shares of the Subsidiary shall not be converted as a
result of the merger, but shall be cancelled, and the
authorized capital stock of Dickinson shall be and remain
the same as before the merger.
4. The Certificate of Incorporation of Dickinson shall be
amended to change the name of Dickinson to SYNERGISTIC
HOLDINGS CORP.
upon the effective date of the merger.
RESOLVED, that the President of the Corporation
is hereby authorized to execute, in the name of the
Corporation, a Certificate of Ownership and Merger, and to
file such Certificate in the Office of the Secretary of
State of the State of Delaware, and to do all the other acts
and things that may be necessary to carry out and effectuate
the purpose of these resolutions."
2
<PAGE>
IN WITNESS WHEREOF, DICKINSON HOLDING CORP. has caused
this Certificate to be executed by its President thereunto duly authorized this
18th day of October, 1995.
DICKINSON HOLDING CORP.
(a Delaware corporation)
By: ________________________
Name:
Title: President
3
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SYNERGISTIC HOLDINGS CORP.
Synergistic Holdings Corp., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by a
unanimous vote, filed in the minutes of a meeting of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Certificate of Incorporation of the Corporation:
RESOLVED, that subject to the approval of the stockholders
of the Corporation, Article First of the Certificate of
Incorporation of the Corporation be amended to read in its
entirety as follows:
"Article First: The name of the Corporation is Salex
Holding Corporation."
SECOND: That thereafter, pursuant to a resolution of the
Corporation's Board of Directors, an annual meeting of the stockholders of the
Corporation was duly called and held, upon notice in accordance with Section
222 of the General Corporation Law of the State of Delaware, at which meeting
the necessary number of shares as required by statute were voted in favor of
the foregoing amendment.
THIRD: That said amendment was duly adopted in accordance
with the applicable provisions of Section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by Salvatore Crimi, its Chief Executive Officer, this
26th day of January 1998.
Synergistic Holdings Corp.
By: /s/ Salvatore Crimi
---------------------------------------
Name: Salvatore Crimi
Title: Chief Executive Officer
<PAGE>
CERITICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SYNERGISTIC HOLDINGS CORP.
Synergistic Holdings Corp., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by a
unanimous vote, filed in the mintes of a meeting of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Certificate of Incorporation of the Corporation:
RESOLVED, that subject to the approval of the
stockholders of the Corporation, the First
paragraph of Aricle Fourth of the Certificate of
Incorporation be amended to read in its entirety as
follows:
"FOURTH: The total number of shares of
capital stock which the Corporation shall have
authority to issue is forty million (40,000,000)
shares, of which thrity-nine million (39,000,000)
shares shall be Common Stock, par value $.01 per
share and one million (1,000,000) shares shall be
Preferred Stock, par vale $.01 per share.
THIRD: That thereafter, pursuant to a resolution of the
Corporation's Board of Directors, an annual meeting of the stockholders of the
Corproation was duly called and held, upon notice in accordance with Section
222 of the General Corporation Law of the State of Delaware, at which meeting
the necessary number of shares as required by statute were voted in favor of
the foregoing amendment.
FOURTH: That said amendment was duly adopted in accordance
with the applicable provisions of Section 242 of the General Corporation Law
of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by Persing Sun, its Senior Vice President and Chief
Information Officer on this 7th day of January 1998.
SYNERGISTIC HOLDINGS CORP.
By: /s/ Pershing Sun
----------------------------------------
Name: Pershing Sun
Title: Senior Vice President and
Chief Information Officer
2
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
SALEX HOLDING CORPORATION
INTO
SYNERGISTIC HOLDINGS CORP.
* * * * * *
Synergistic Holdings Corp., a corporation organized and
existing under and by virtue of the and by virtue of the General Corporation
Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Corporation is a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware.
SECOND: That the Corporation owns all of the outstanding
shares of stock of Salex Holding Corporation (the "Subsidiary"), a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware.
THIRD: That the Board of Directors of the Corporation (the
"Board"), by unanimous written consent of the members of the Board, filed with
the minutes of the Board, adopted the following resolutions to merge the
Subsidiary into the Corporation:
RESOLVED, that Salex Holding Corporation
("Subsidiary") shall merge into Synergistic Holdings Corp.
(the "Corporation"), and upon the effective date of such
merger the Corporation shall assume all of the obligations
of the Subsidiary;
RESOLVED, that the merger shall be effective upon
the date of filing with the Secretary of State of the State
of Delaware; and
RESOLVED, that the Chief Executive Officer of the
Corporation is hereby authorized to execute, in the name of
<PAGE>
the Corporation, a Certificate of Ownership and Merger, and
to file such Certificate in the Office of the Secretary of
State of the State of Delaware, and to do all the other acts
and things that may be necessary to carry out and effectuate
the purpose of these resolutions.
FOURTH: Anything herein or elsewhere to the contrary
notwithstanding, this merger may be amended or terminated and abandoned by the
Board at any time prior to the date of filing the merger with the Secretary of
State of the State of Delaware.
IN WITNESS WHEREOF, said Corporation has caused this
certificate to be signed by its Chief Executive Officer this 26th day of
January, 1998.
By: /s/ Salvatore Crimi
------------------------------------
Name: Salvatore Crimi
Title: Chief Executive Officer
2
<PAGE>
EXHIBIT 11 - COMPUTATION OF PER SHARE EARNINGS
SALEX HOLDINGS CORPORATION AND SUBSIDARIES
AND AFFILIATE
SUPPLEMENTAL NET INCOME PER COMMON SHARE
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
1/31/98 1/31/97 1/31/98 1/31/97
------------ ------------ ----------- -----------
Weighted Average
Common Stock Outstanding 9,187,260 9,187,260 9,187,260 9,187,260
Series B Preferred
Automatically Converted 2,059,106 2,059,106 2,059,106 2,059,106
----------- ----------- ----------- -----------
Supplemental Weighted
Average Shares 11,246,366 11,246,366 11,246,366 11,246,366
=========== =========== =========== ===========
Supplemental net loss $ (107,991) $ (146,705) $ (149,751) $ (983,677)
=========== =========== =========== ===========
Supplemental net loss
per common share $ (0.01) $ (O.01) $ (O.01) $ (0.09)
=========== =========== ========== ==========
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 117,973
<SECURITIES> 0
<RECEIVABLES> 3,602,646
<ALLOWANCES> 188,000
<INVENTORY> 0
<CURRENT-ASSETS> 3,572,693
<PP&E> 3,268,864
<DEPRECIATION> 1,591,890
<TOTAL-ASSETS> 6,547,469
<CURRENT-LIABILITIES> 7,636,251
<BONDS> 0
0
737,647
<COMMON> 91,873
<OTHER-SE> (2,507,142)
<TOTAL-LIABILITY-AND-EQUITY> 6,547,469
<SALES> 17,051,497
<TOTAL-REVENUES> 17,051,497
<CGS> 13,796,485
<TOTAL-COSTS> 13,796,485
<OTHER-EXPENSES> 3,158,994
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 245,769
<INCOME-PRETAX> (149,751)
<INCOME-TAX> 0
<INCOME-CONTINUING> (149,751)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (149,751)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> 0
</TABLE>
