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-64
September 30, 1996
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 No x
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 31,1996
Common Stock, one cent par value 9,297,561
NO DOCUMENTS INCORPORATED BY REFERENCE
<PAGE>
SYNERGISTICS, INC.
BALANCE SHEET
ASSETS
(UNAUDITED)
Sept 30 Dec 31
1996 1995
CURRENT ASSETS
Cash 194,030 332,151
Accounts receivable 358,933 346,795
Inventories 265,211 201,546
Prepaid expenses 41,936 23,180
------- -------
TOTAL CURRENT ASSETS 860,110 903,672
EQUIPMENT, less allowances of $56,519
and $45,700 for depreciation 66,106 52,795
DEFERRED TAXES 817,776 817,776
--------- ---------
TOTAL ASSETS 1,743,992 1,774,243
========= =========
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable 124,614 163,774
Accrued expenses and other current 61,321 67,633
Amount due stockholder 155,047 196,296
------- -------
TOTAL CURRENT LIABLITIES 340,982 427,703
STOCKHOLDERS' EQUITY
Common Stock (9,297,561 shares issued
including shares held in Treasur 92,976 92,976
Additional paid-in capital 6,542,237 6,542,237
Retained earnings (deficit) (5,225,068) (5,281,538)
--------- ---------
1,410,145 1,353,675
Cost of Common Stock held in Treas (7,135) (7,135)
--------- ---------
1,403,010 1,346,540
TOTAL LIABILITIES. PREFERRED STOCK --------- ---------
AND SHAREHOLDERS' EQUITY 1,743,992 1,774,243
========= =========
<PAGE>
(UNAUDITED)
SYNERGISTICS, INC.
STATEMENT OF OPERATIONS
PERIOD OF NINE MONTHS ENDED SEPTEMBER 30,1996 AND 1995
1996 1995
Sales 1,668,236 1,646,346
Other income 2,342 4,011
--------- ---------
1,670,578 1,650,357
Costs and expenses:
Cost of sales 791,430 762,243
Selling, general and administrative 822,366 631,000
Interest expense 311 138,139
--------- ---------
1,614,107 1,531,382
Net gain (loss) 56,471 118,975
Gain (loss) per share of Common Stock
Assuming no dilution $0.01 $0.01
Assuming full dilution $0.01 $0.01
<PAGE>
(UNAUDITED)
SYNERGISTICS, INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
PERIODS OF NINE MONTHS SEPTEMBER 30, 1996 AND 1995
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) 56,471 118,975
Adjustments to reconcile net loss to net
cash (used) provided by operating activities:
Depreciation 10,819 4,907
(Increase) decrease in accounts rec (12,138) 36,745
(Increase) decrease in inventories (63,666) (59,486)
(Increase) decrease in prepaid expenses
and other assets (18,756) (158,429)
Increase (decrease) in accounts pay. (39,160) 234,132
Increase (decrease) in accrued expenses
and other current liabilities (6,312) (52,859)
Increase (decrease) in amounts due
shareholder (41,249) 0
-------- --------
TOTAL ADJUSTMENTS (170,462) 5,010
-------- --------
NET CASH USED BY OPERATING ACTIVITIE (113,991) 123,985
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (24,130) (30,351)
------- -------
NET CASH (USED) BY INVESTING ACTIVIT (24,130) (30,351)
NET CHANGE IN CASH (138,121) 93,634
CASH AT BEGINNING OF YEAR 332,151 149,909
------- -------
CASH AT END OF PERIOD 194,030 243,543
======= =======
<PAGE>
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, 1996 are not necessarily indicative of the operating results for
full year.
Basis of Presentation
It is the opinion of management that all significant adjustments which
routine recurring adjustments reflected in the accompanying September
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 acutally incurred.
Inventories
Inventories are comprised of the following:
* 9/30/96 12/31/95
Finished Goods & WIP 110,000 90,000
Finished Goods & WIP 176,296 111,546
------- -------
Total Inventories 286,296 201,546
*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
of the security.
The following schedule sets forth the number of shares used in computing
earnings per share:
Period of Nine Months
Ended September 30
1996 1995
Assuming no dilution
Common Stock Outstanding October 31, 1996 9,297,561 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, 1996, the Company recorded sales of
$1,668,236 compared to $1,646,346. At September 30, 1996 the Company had a
backlog of approximately $48,631.
Cost of sales as a percentage of sales increased to 47.4% from 46.3%
for the nine months ended September 30, 1996 and 1995, respectively.
For the period of nine months ended September 30, 1996, selling, general
and administrative expenses increased by $191,366 over the period of
months ended September 30, 1995. Development expenses approximated $186,218
and $161,131 for the period nine months ended September 30, 1996 and
respectively.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are currently no pending legal proceedings to which the Company
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 1996.
ITEM 3. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were brought to a vote of the Company;s security holders
during the first quarter.
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 2/19/97 BY /S/WILLIAM M. TETRICK
William M. Tetrick
Chairman of the Board
DATE 2/19/97 BY /S/DAVID S. LONGWORTH
David S. Longworth
President and Clerk
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 194,030
<SECURITIES> 0
<RECEIVABLES> 358,933
<ALLOWANCES> 0
<INVENTORY> 265,211
<CURRENT-ASSETS> 869,110
<PP&E> 112,625
<DEPRECIATION> 56,519
<TOTAL-ASSETS> 1,743,992
<CURRENT-LIABILITIES> 340,982
<BONDS> 0
0
0
<COMMON> 92,976
<OTHER-SE> 1,300,034
<TOTAL-LIABILITY-AND-EQUITY> 1,743,992
<SALES> 1,668,236
<TOTAL-REVENUES> 1,670,578
<CGS> 791,430
<TOTAL-COSTS> 791,430
<OTHER-EXPENSES> 822,366
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 311
<INCOME-PRETAX> 56,471
<INCOME-TAX> 0
<INCOME-CONTINUING> 56,471
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,471
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
