SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-KSB/A-1 Annual or Transitional Report
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
Commission File Number 0-17580
SYNERGX SYSTEMS INC.
(Exact name of Small Business Issuer in its charter)
Delaware 11-2941299
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
209 Lafayette Drive, Syosset, New York 11791
(Address of principal executive offices) (zip code)
Issuer's telephone number, including area code: (516) 433-4700
Securities registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value per share
(Title of Class)
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 preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements be reference in Part III of this Form 10-KSB ( )
State issuer's revenues for its most recent fiscal year: $16,943,000
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the average bid and ask prices for the Registrant's
Common Stock, $.001 par value per share, as of December 16, 2002 was $1,079,784.
As of December 14, 2002, the Registrant had 1,874,425 shares of Common
Stock outstanding.
Documents Incorporated by Reference: None
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The Directors and Executive Officers of the Company are as follows:
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 43 Chairman, Chief October 1990
Executive Officer,
General Counsel,
Director, and
Audit Committee
Joseph Vitale 56 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 62 Treasurer, Vice January 1997
President, Chief
Financial Officer,
Secretary and
Director
Dennis P. McConnell 49 Director and January 1997
Audit Committee
Henry Schnurbach 51 Director and October 1988
Audit Committee
J. Ian Dalrymple 51 Director May 2002
Mark I. Litwin 40 Director May 2002
Mr. Tamkin has a J.D. degree from New York University School of Law and an
A.B. degree from Columbia University. Mr. Tamkin has been Chief Executive
Officer since March 15, 1996, prior to which Mr. Tamkin was Vice President and
General Counsel of the Company from October 1990. Also since October 1990, Mr.
Tamkin has been a Vice President of Mirtronics and Executive Vice President of
Forum Financial Corporation, a Toronto based merchant banking organization
controlled by a Director of Mirtronics. Since November 1992, Mr. Tamkin has been
a director of Unicap Commercial Corporation, an Ontario corporation which is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"). Since
November 1998, Mr. Tamkin has been a Director and Chief Operating Officer of
Ntex Incorporated, a manufacturer of textile products. Mr. Tamkin is presently
Counsel to Dolgenos Newman & Cronin LLP, counsel to the Company.
Mr. Vitale has been President of the Company since March 15, 1996. Mr.
Vitale has been active in the fire/communications industry with Casey Systems
Inc. since 1982. Mr. Vitale has been President of Casey since 1993 and has held
the positions of Director of Engineering, Vice President - Engineering and
Executive Vice President. Mr. Vitale holds a Bachelor of Science degree in
Engineering from C.W. Post College and a Master of Science degree in Electrical
Engineering from New York University.
Mr. Poserina joined the Company as Treasurer, Vice President, Chief
Financial Officer and Director as of January 1, 1997. From December 1995 until
he joined the Company, Mr. Poserina was an independent financial consultant.
Also, from July 1996 to September 1996, Mr. Poserina was Chief Financial Officer
of Happiness Express Inc. Mr. Poserina was Chief Financial Officer of Dorne and
Margolin Inc. from November 1994 to December 1995. Prior to that, Mr. Poserina
spent 15 years as Vice President, Treasurer and Chief Financial Officer of
Chryon Corporation, a NYSE listed company registered under the Exchange Act. Mr.
Poserina holds a Bachelor of Science degree in accounting from the University of
Rhode Island and is a Certified Public Accountant.
Mr. McConnell is a partner in the firm of Dolgenos Newman & Cronin LLP,
counsel to the Company. Prior to being associated with Dolgenos Newman & Cronin
LLP, he was associated with Varet & Fink P.C. from 1989 to March 1993. Mr.
McConnell holds a J.D. degree from New York Law School.
Mr. Schnurbach has a Bachelor of Commerce degree from Sir George Williams
University and is a Certified Management Accountant in Ontario. Since October
1991, Mr. Schnurbach has been Chief Executive Officer of Cantar/Polyair
Corporation ("CPC"). Since February 1996, Mr. Schnurbach has also served as
President of Polyair Inter Pack Inc., an Ontario corporation traded on the
Toronto Stock Exchange, and the holding company of CPC.
Mr. Dalrymple has a Bachelor of Commerce degree and a Masters of Arts in
Economics from the University of Toronto. Since 1990, Mr. Dalrymple has been a
director of Nigel Stephens Counsel Inc., an Ontario corporation, which provides
investment and portfolio management services; NSC Holdings Inc., an Ontario
corporation which provides investment research and client administrative
services; and Fordal Holdings Inc., an Ontario corporation which provides
trading, settlement and related services to portfolio management firms. Mr.
Dalrymple is also a director of Cornerstone 52 Foundation, a charitable
foundation with focus on children's charities. In addition, Mr. Dalrymple has
been, since 1993, a director of Nafund Inc., an Ontario investment corporation
and, since 1996, a director of Nafund Administrators Inc., an Ontario
corporation originating merchant banking investments and advisory services.
Mr. Litwin has a B.A. and an M.B.A. from York University in Toronto,
Canada. Since 1990, Mr. Litwin has been the President, Chief Executive Officer
and a director of Mirtronics Inc. an Ontario corporation which is registered
under the Exchange Act. Mirtronics is the largest stockholder of Synergx.
There are no family relationships between any Director or Executive Officer
of Synergx and any other Director or Executive Officer of Synergx.
Directors hold office for a period of one year from the Annual Meeting of
Stockholders at which they are elected or until their successors are duly
elected and qualified. Officers are appointed by the Board of Directors and hold
office at the will of the Board. There is no nominating, or compensation
committee of the Board of Directors nor is there any committee performing
similar functions.
The Registrant is not aware of any Section 16(a) filing deficiences. In
making these statements, the Company has relied on the written representations
of its directors and officers and copies of the reports that they and 10%
holders have filed with the Commission.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation paid or accrued by the Company for services rendered to it for each
of the three fiscal years ended September 30, 2002, as to Daniel S. Tamkin, the
Company's present Chief Executive Officer, Joseph Vitale, the Company's
President and Chief Operating Officer, and John A. Poserina, the Company's Chief
Financial Officer and Secretary; none of the Company's other Executive Officers
had aggregate remuneration in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG
ANNUAL COMPENSATION TERM COMPENSATION
All Other
Year Salary ($) Bonus($) Other($) Option/SAR Compensation
- -----------------------------------------------------------------------------
Daniel S. Tamkin
2002 $97,000 $10,000 $5,600 --
2001 87,000 20,000 5,600 (1) --
2000 74,000 20,000 5,600 --
Joseph Vitale
2002 $140,000 $20,000 $6,000 --
2001 130,000 30,000 6,000 (2) --
2000 113,000 30,000 6,000 --
John A. Poserina
2002 $151,000 $20,000 $5,600 --
2001 141,000 30,000 5,600 --
2000 124,000 30,000 5,600 --
- ------
(1) Options to purchase 4,167 shares of Common Stock, at a price of $1.03 per
share were issued to Mr. Tamkin in December, 2000.
(2) Options to purchase 7,959 shares of Common Stock, at a price of $1.03 per
share were issued to Mr. Vitale in December, 2000.
- -----------
The following table details, as of September 30, 2002, the value of
unexercised in-the-money options held by Daniel S. Tamkin, Joseph Vitale and
John A. Poserina:
Number of Securities Value of Unexercised
Underlying Unexercised Options In-The-Money Options (1)
Exercisable Unexercisable Exercisable Unexercisable
---------- ------------ ----------- -------------
Daniels S. Tamkin 8,833 2,000 $ 792 $ 250
Joseph Vitale 14,367 2,758 3,001 417
John A. Poserina 7,667 2,000 1,542 250
- - - ------
(1) Net value, calculated as the difference between the exercise price and the
market price reported for September 30, 2002.
In December 1995, the Board of Directors voted to institute a 401(k) plan
for nonunion employees to be effective January 1, 1996. The plan includes a
profit sharing provision at the discretion of the Board of Directors. No profit
sharing contributions were authorized in 2002. In 2001 the Board of Directors
approved a payment totaling $44,000 for participants of the non-union and union
401(k) plans.
Directors do not receive any compensation for their service. Out-of-pocket
expenses for travel, meals and miscellaneous expenses incurred in the course of
the Director's activities on behalf of the Company are reimbursed at cost.
On April 30, 1997, the Company and its shareholders adopted a nonqualified
stock option plan ("1997 Plan"), which expires September 30, 2002, except as to
options then outstanding under the 1997 Plan. Under the 1997 Plan, the Board of
Directors may grant options to eligible employees at exercise prices not less
than 100% of the fair market value of the common shares at the time the option
is granted. The number of shares of Common Stock that may be issued shall not
exceed an aggregate of up to 10% of its issued and outstanding shares from time
to time. Options vest at a rate of 20% per year commencing one year after date
of grant. Issuances under the 1997 Plan are to be reduced by options outstanding
under a 1990 nonqualified stock option plan (replaced by the 1997 Plan).
Effective September 30, 1998, all outstanding employee stock options were reset
to an exercise price of $1.00 per share.
On September 30, 2002, options on 24,083 of Common Stock were extended to
December 31, 2005 and the option exercise price remained $1.00 per share.
On December 29, 2000, options on 43,375 shares of Common Stock were
extended for five more years and the option price was reset from $1.00 to $1.03
per share.
The Company currently has issued and outstanding options to purchase
101,791 shares of its Common Stock, at various exercise prices ranging between
$1.00 and $1.125 per share, to certain of its officers, Directors and employees.
See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's outstanding Common Stock at
December 10, 2002 of (i) each beneficial owner of more than five percent of the
Common Stock, (ii) each of the Company's Directors, and (iii) all Officers and
Directors of the Company as a group.
Common Stock Beneficially Owned At January 7, 2002
Number of Shares Percent of Shares
--------------------------------------
Mirtronics Inc.(1) 896,311 41.0%
Investors Money Management (10) 340,000 16.6%
Genterra Capital Corporation 152,167 6.8%
Daniel S. Tamkin (2) 127,733 6.0%
Joseph Vitale (3, 4) 17,125 nil
Henry Schnurbach (4) 5,167 nil
John A. Poserina (3, 5) 17,667 nil
Dennis P. McConnell (4, 6) 4,167 nil
Mark Litwin (8) 1,048,478 48.0%
J. Ian Dalrymple (9) 0 nil
All Executive Officers and
Directors as a Group (5 Persons) 1,219,837 54.7%
- ----------
(1) Includes 310,000 shares of Common Stock issuable upon conversion of
debt owed to Mirtronics and convertible into shares of Common Stock. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS". Address is 106 Avenue Road,
Toronto, Ontario.
(2) Includes 10,833 shares of Common Stock issuable upon exercise of
options granted by the Company. Address is 96 Spring Street, New York, NY.
(3) Address is 209 Lafayette Drive, Syosset, NY 11791.
(4) Issuable upon exercise of options granted by the Company.
(5) Includes 9,667 shares of Common Stock issuable upon exercise of
options granted by the Company.
(6) Address is 96 Spring Street, New York, NY.
(7) Address is 106 Avenue Road, Toronto, Ontario.
(8) By virtue of his position as an officer and/or director of such
entities, Mr. Litwin may be considered the beneficial owner of shares owned by
Mirtronics Inc. and Genterra Capital Corporation. Mr. Litwin expressly disclaims
such beneficial ownership. Address is 106 Avenue Road, Toronto, Ontario.
(9) Address is 1200 Sheppard Avenue East, Willowdale, Ontario.
(10) Includes 170,000 shares of Common Stock issuable upon exercise of
warrants.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1985, Casey entered into a royalty agreement with Joseph Vitale, prior
to his becoming the President and Chief Operating Officer of the Company. The
agreement pays Mr. Vitale a royalty on certain systems marketed and serviced by
Casey. In fiscal year ended September 30, 2002, Casey paid $75,852 pursuant to
the terms of the agreement.
Management believes each of the foregoing transactions was entered into on
terms at least as favorable as could be obtained from unrelated parties
negotiating at arms-length.
Daniel S. Tamkin, Chairman, Chief Executive Officer and General Counsel of
Synergx, is also an officer of a company controlled by a Director of
Mirtronics, Synergx's largest stockholder. Mr. Schnurbach, a Director of the
Company, is a Director of Mirtronics.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SYNERGX SYSTEMS INC.
(Registrant)
By: /s/ JOHN A. POSERINA
-----------------------
John A. Poserina,
Chief Financial Officer, Secretary
And Director(Principal Accounting and
Financial Officer)
Dated: January 28, 2003
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Daniel S. Tamkin, Chief Executive Officer, and John A. Poserina, Chief
Financial Officer of Synergx Systems certify that:
1. We have reviewed this amended annual report on Form 10-KSB/A of Synergx
Systems Inc.;
2. Based on our knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on our knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
registrant as of, and for, the periods presented in this annual report;
4. The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designated such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) Evaluated the effectiveness of the registrants disclosure controls and
procedures as of a dated within 90 days prior to the filing date of this annual
report (the Evaluation Date); and
c) Presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrants other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent functions);
a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls; and
6. The registrants other certifying officers and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: January 28, 2003
/s/ Daniel S. Tamkin /s/ John A. Poserina
-------------------- ---------------------
Daniel S. Tamkin John A. Poserina
Chief Executive Officer Chief Financial Officer
(Principal Financial and Accounting
Officer), Secretary and Director
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the amended annual report of Synergx Systems Inc. (the
"Company") on Form 10-KSB/A for the period ending September 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Amended
Report"), I, Daniel S. Tamkin, Chief Executive Officer of the Company, and I,
John A. Poserina, Chief Financial Officer of the Company certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, to my knowledge, that:
(1) The Amended Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Amended Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
/s/ Daniel S. Tamkin
----------------------
Daniel S. Tamkin
Chief Executive Officer
Synergx Systems Inc.
January 28, 2003
/s/ John A. Poserina
-----------------------
John A, Poserina
Chief Financial Officer
Synergx Systems Inc.
January 28, 2003