U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal quarter ended___________June 30, 2002_______________________
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number________________0-17580__________________________
SYNERGX SYSTEMS INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 11-2941299
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(State or jurisdiction of (IRS employer identification Number)
incorporation or organization)
209 Lafayette Drive, Syosset, New York 11791
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(Address of Principal Executive Offices) (Zip code)
(516) 433-4700
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(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes[ X ] No[ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 11, 2002, 1,704,425
shares of Registrant's Common Stock were issued and outstanding.
Transitional Small Business Disclosure Format (check one) Yes[ ] No[ X ]
INDEX
Part I - Financial Information (unaudited) Page
Item 1. Financial Statements.
Condensed Consolidated Balance Sheet at June 30, 2002 3
Condensed Consolidated Statements of Operations for the Three Month
Periods Ended June 30, 2002 and 2001 5
ondensed Consolidated Statements of Operations for the Nine Month
Periods Ended June 31, 2002 and 2001 6
Condensed Consolidated Statements of Cash Flows for the Nine Month
Periods Ended June 30, 2002 and 2001 7
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Part II - Other Information
Item 1. Legal Proceedings. 15
Item 2. Changes in Securities. 15
Item 3. Defaults Upon Senior Securities. 15
Item 4. Submission of Matters to a Vote of Security Holders. 15
Item 5. Other Information. 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
Part I - FINANCIAL INFORMATION
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30,
2002
-----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $175,576
Accounts receivable, principally trade, less allowance
for doubtful accounts of $361,783 4,834,233
Inventories 2,477,022
Deferred taxes 328,000
Prepaid expenses and other current assets 450,706
-----------
TOTAL CURRENT ASSETS 8,265,537
-----------
PROPERTY AND EQUIPMENT -at cost, less
accumulated depreciation and
amortization of $1,226,942 303,150
OTHER ASSETS 157,842
DEFERRED TAXES 69,000
-----------
TOTAL ASSETS $8,795,529
===========
See accompanying Notes to the Condensed Consolidated Financial Statements
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30,
2002
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Other notes payable - principally to related party $82,435
Accounts payable and accrued expenses 2,490,097
Deferred revenue 466,164
Current portion of capital lease obligations 24,167
-----------
TOTAL CURRENT LIABILITIES 3,062,863
Note payable to bank 1,240,397
Notes payable - principally to related party,
less current portion 50,562
Capital lease obligations, less current portion 48,240
-----------
TOTAL LIABILITIES 4,402,062
COMMITMENTS AND CONTINGENCIES -----------
STOCKHOLDERS' EQUITY
Preferred stock, 2,000,000 shares authorized-
none issued and outstanding
Common stock, 10,000,000 shares authorized, $.001
par value; issued and outstanding 1,704,425 shares 1,704
Capital in excess of par 5,278,490
Accumulated Deficit (886,727)
-----------
TOTAL STOCKHOLDERS' EQUITY 4,393,467
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,795,529
===========
See accompanying Notes to the Condensed Consolidated Financial Statements
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
June 30,
2002 2001
---------- ----------
Product sales $2,838,862 $3,573,922
Subcontract sales 621,850 395,721
Service revenue 1,170,698 1,056,181
----------- -----------
Total revenues 4,631,410 5,025,824
----------- -----------
Cost of product sales 1,917,786 2,460,487
Cost of subcontract sales 506,063 286,993
Cost of service 772,148 766,959
Selling, general and administrative 1,349,167 1,250,351
Interest expense 23,621 30,973
Depreciation and amortization expense 44,143 45,142
----------- -----------
4,612,928 4,840,905
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Income from operations before provision for
income taxes 18,482 184,919
Provsion for income taxes:
Current 18,300 73,000
Deferred (11,300) 8,000
----------- -----------
7,000 81,000
----------- -----------
Net Income $ 11,482 $ 103,919
=========== ===========
Earnings per common share
Basic earnings per share $0.01 $0.06
=========== ===========
Diluted earnings per share $0.01 $0.06
=========== ===========
Weighted average number of common shares outstanding 1,704,425 1,704,425
Weighted average number of common and potential dilutive
common shares outstanding 1,834,327 1,779,157
See accompanying Notes to the Condensed Consolidated Financial Statements
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Nine Months
Ended June 30,
2002 2001
--------- -----------
Product sales $7,121,896 $9,610,112
Subcontract sales 1,257,252 778,307
Service revenue 3,439,830 3,217,382
----------- ----------
Total revenues 11,818,978 13,605,801
----------- ----------
Cost of product sales 4,941,528 6,456,924
Cost of subcontract sales 1,024,454 589,384
Cost of service 2,398,395 2,234,722
Selling, general and administrative 3,903,042 3,674,645
Interest expense 72,509 115,740
Depreciation and amortization expense 131,155 133,691
----------- ----------
12,471,083 13,205,106
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(Loss) Income from operations before provision for
(benefit from) income taxes (652,105) 400,695
Provision for (benefit from) income taxes:
Current (176,700) 193,000
Deferred (86,300) (18,000)
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(263,000) 175,000
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Net (Loss) Income $ (389,105) $ 225,695
=========== ===========
Earnings Per Common Share
Basic (Loss) Earnings Per Share ($0.23) $0.13
Diluted (Loss) Earnings Per Share ($0.23) $0.13
=========== ===========
Weighted Average Number of Common Shares Outstanding 1,704,425 1,704,425
Weighted Average Number of Common and Potential Dilutive
Common Shares Outstanding 1,704,425 1,776,389
See accompanying Notes to the Condensed Consolidated Financial Statements
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months
Ended June 30,
2002 2001
----------- ----------
OPERATING ACTIVITIES
Net (loss) income $(389,105) $225,695
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization 131,155 133,691
Deferred tax benefit (86,000) (18,000)
Provision for doubtful accounts 33,898 23,000
Changes in operating assets and liabilities:
Accounts receivable 1,589,132 988,610
Inventories, prepaid expenses and other current assets (398,645) (330,256)
Other assets (3,841) (17,111)
Accounts payable and accrued expenses (816,088) (645,192)
Deferred revenue 12,265 127,294
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 72,771 487,731
----------- -----------
INVESTING ACTIVITIES
Purchases of property and equipment (35,808) (144,250)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (35,808) (144,250)
----------- -----------
FINANCING ACTIVITIES
Principal payments on revolving line of credit, long-term
debt, notes payable and capital lease obligations (190,536) (307,990)
Proceeds from revolving line of credit, notes payable
and capital lease obligations 30,729 92,272
Notes payable to affiliated companies (250,017)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (159,807) (465,735)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (122,844) (122,254)
Cash and cash equivalents at beginning of period 298,420 238,678
----------- -----------
Cash and cash equivalents at end of period $ 175,576 $ 116,424
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ 151,234 $ 375,378
Interest $ 76,993 $ 111,617
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During the nine months ended June 30, 2002 and 2001, the Company incurred no
capital lease obilgations for the acquisition of equipment.
See accompanying Notes to the Condensed Consolidated Financial Statements
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
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 of normal recurring
accruals) considered necessary in order to make the financial statements not
misleading have been included. Results for the three and nine months ended June
30, 2002 are not necessarily indicative of the results that may be expected for
the fiscal year ending September 30, 2002. For further information, refer to the
consolidated financial statements and footnotes thereto included in Synergx
Systems Inc. (formerly Firetector Inc.) ("the Company") and Subsidiaries' annual
report on Form 10-KSB for the year ended September 30, 2001.
At the annual meeting of Firetector Inc stockholders held on May 22, 2002,
stockholders voted to amend the Company's Certificate of Incorporation to change
Firetector's name to SYNERGX SYSTEMS INC.
2. REVENUE RECOGNITION
Product revenues include sale of systems, which are similar in nature, that
involve fire alarm, life safety and security (CCTV and card access), transit (on
board systems) and communication (paging, announcement and audio/visual).
Product sales represent sales of product along with the integration of technical
services at a fixed price under a contract with an electrical contractor or end
user customer (building owner or tenant), or customer agent. Product revenue is
allocated using a constant gross profit percentage over the entire contract, and
recognized, using the percentage-of-completion method of accounting. The Company
utilizes a units-of-work performed method to measure progress towards completion
of the contract. The effects of changes in contract terms are reflected in the
accounting period in which they become known. Contract terms provide for billing
schedules that differ from revenue recognition and give rise to costs and
estimated profits in excess billings, and billings in excess of costs and
estimated profits.
Subcontract revenues principally represents revenues related to electrical
installation of wiring and piping performed by others for the Company when the
Company acts as the prime contractor and sells its products along with
electrical installation. Subcontract revenue is also recognized during the
entire project using the percentage-of-completion method of accounting as
electrical installation is performed at the job site.
Service revenue from separate maintenance contracts is recognized on a
straight-line basis over the terms of the respective contract, which is
generally one year. Non-contract service revenue is recognized when services are
performed.
3. INVENTORY
Inventories are priced at the lower of cost (first-in, first-out) or market and
consist primarily of raw materials.
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
NINE MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
4. LONG TERM DEBT
The Company has a revolving Credit Facility with Citizens Business Credit
Company of Boston, Massachussetts, (the "Credit Facility"). The credit facility
provides for a $3,000,000 revolving line of credit which expires in December
2004. The Credit Facility provides for interest at prime rate (4.75% at June 30,
2002) plus 1/4% on outstanding balances. At June 30, 2002, $1,240,397 was
outstanding under this facility. Advances under the Credit Facility are measured
against a borrowing base calculated on eligible receivables and inventory. The
Credit Facility is secured by all of the assets of the Company and all of its
operating subsidiaries.
The Credit Facility includes certain restrictive covenants, which among other
things impose limitations on declaring or paying dividends, acquisitions and
capital expenditures. The Company is also required to maintain certain financial
ratios. Citizens Business Credit Company of Boston has modified the requirement
of one of the ratios for the balance of fiscal 2002. At June 30, 2002, the
Company was not in default of any of its covenants as a result of this
modification.
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
NINE MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
5. EARNINGS (LOSS) PER SHARE
The Financial Accounting Standards Board issued SFAS No. 128 "Earnings Per
Shares" which requires companies to report basic and diluted earnings per share
("EPS") computations. Basic EPS excludes dilution and is based on the
weighted-average common shares outstanding and diluted EPS gives effect to
potential dilution of securities that could share in the earnings of the
Company. Diluted EPS reflects the assumed issuance of shares with respect to the
Company's employee stock options, non-employee stock options and warrants.
Three Months ended June 30, Nine Months Ended June 30,
---------------------------- ----------------------------
Basic EPS Computation 2002 2001 2002 2001
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Net Income (Loss) available to common
stockholders $ 11,482 $103,919 $(389,105) $225,695
Weighted average
outstanding shares 1,704,425 1,704,425 1,704,425 1,704,425
Basic EPS (Loss) $.01 $.06 $(.23) $.13
==== ==== ====== ====
Diluted EPS Computation Three Months ended June 30, Nine Months ended June 30,
------------------------------------ ----------------------------
2002 2001 2002 2001
-------------------------------------- -------------------------------
Net Income (Loss) available to common
stockholders $ 11,482 $103,919 $(389,105) $225,695
========= ======== ========== ========
Weighted-average shares 1,704,425 1,704,425 1,704,425 1,704,425
--------- --------- --------- ---------
Plus: Incremental shares from
assumed conversions
Employee Stock Options* 30,702 17,692 16,964
Warrants* 99,200 57,040 55,000
------ ------ ------
Dilutive potential common shares 129,902 74,732 N/A 71,964
------- ------ --- ------
Adjusted weighted-average shares 1,834,327 1,779,157 1,704,425 1,776,389
--------- --------- --------- ---------
Diluted EPS (Loss) $.01 $.06 $(.23) $.13
==== ==== ====== ====
*All warrants and options were antifilutive for the nine month period ended June
30, 2002 and therefore not included in the above calculation.
SYNERGX SYSTEMS INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued
NINE MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
6. SUBSEQUENT EVENTS
On July 20, 2002, the union representing hourly employees and the Company
ratified a Collective Bargaining Agreement expiring July 9, 2005, providing for
an increase in salaries and benefits averaging approximately 4 1/2 % per year
over the life of the contract.
The Company entered into a lease for 4,800 square feet of office and warehouse
space in New York City. The lease will become effective in August 2002 when the
landlord completes renovations and will run thru December 31, 2009. The lease
provides for yearly rental of $84,000 during the first year plus expenses with
yearly escalation of 2% each year thereafter. Total cost of space over the life
of the lease will approximate $631,000. The Company terminated its present lease
for office and warehouse space in New York City by giving six months notice,
which will be effective December 5, 2002.
On August 1, 2002 the Company has offered to sell 170,000 units ("Units") in a
private placement to an unaffiliated investor for $1.40 per Unit. Each Unit
consists of one share of Common Stock and one warrant ( the "Warrant") to
purchase an additional share of Common Stock at $1.40 for a period of 24 months
from closing. The Units, Common Stock, Warrants and Common Stock issuable upon
exercise of the Warrants will be restricted and may not be sold or transferred
without registration under or an exemption from applicable securities laws. The
purchaser will be granted one-time "piggy-back" registration rights. The
transactions are expected to close within 30 days subject to any required
regulatory and/or banking approval, however there is no assurance that this
transaction will be completed.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Company has a $3 million credit facility with Citizens Business Credit
Company of Boston, (the "Credit Facility") that expires in December, 2004. The
Credit Facility has an interest rate of prime plus 1/4% on outstanding balances.
Advances under the Credit Facility are measured against a borrowing base
calculated on eligible receivables and inventory. The Credit Facility is secured
by all assets of the Company and all of its operating subsidiaries. The Company
owed $1,240,397 under the Credit Facility at June 30, 2002.
The Credit Facility includes various covenants, which among other things, impose
limitations on declaring or paying dividends, acquisitions and capital
expenditures. The Company is also required to maintain certain financial ratios.
Citizens Business Credit has modified the requirements for one of these ratios
for the balance of fiscal 2002. At June 30, 2002, the Company was not in default
with any of its financial covenants as a result of this modification.
Net cash provided by operations for the nine months ended June 30, 2002 amounted
to $72,779 as compared to $487,731 for the comparable prior year period. The
primary reason for the decrease in cash being provided by operations was due to
a decrease of $1,052,800 in operating profit before taxes (a $652,105 operating
loss in 2002 vs as $400,695 profit in 2001). Offsetting this outflow was
$600,522 of higher collections of accounts receivable.
The ratio of the Company's current assets to current liabilities decreased to
approximately 2.70 to 1 at June 30, 2002 compared to 2.93 to 1 at June 30, 2001.
The decrease in the current ratio since June 30, 2001 is due to a $246,000
reduction in working capital, which was caused by the need to fund the operating
loss during the nine months ended June 30, 2002.
On August 1, 2002 the Company has offered to sell 170,000 units ("Units") in a
private placement to an unaffiliated investor for $1.40 per Unit. Each Unit
consists of one share of Common Stock and one warrant ( the "Warrant") to
purchase an additional share of Common Stock at $1.40 for a period of 24 months
from closing. The Units, Common Stock, Warrants and Common Stock issuable upon
exercise of the Warrants will be restricted and may not be sold or transferred
without registration under or an exemption from applicable securities laws. The
purchaser will be granted one-time "piggy-back" registration rights. The Company
will use the proceeds ($476,000 assuming the sale of the Units is completed and
the exercise of all Warrants) for general corporate purposes with a particular
focus on funding new products, markets, business ventures as a complement or
supplement to existing operations. The Company believes that when and if the
investors ultimately sell the restricted shares (after applicable holding
periods or through registration) the addition of up to 340,000 shares of Common
Stock (assuming exercise of the Warrants) to the public float may serve to
increase liquidity of the Company's common stock. The transactions are expected
to close within 30 days subject to any required regulatory and/or banking
approval, however there is no assurance that this transaction will be completed.
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
Revenues and Gross Profit
Three Months Ended Nine Months Ended
------------------ ------------------
June 30, June 30,
-------- --------
2002 2001 2002 2001
---- ---- ---- ----
(In thousands of dollars)
Product Revenue $2,839 $3,574 $7,122 $9,610
Subcontract Revenue 622 396 1,257 778
Service Revenue 1,170 1,056 3,440 3,218
Total Revenue 4,631 5,026 11,819 13,606
Gross Profit Product 921 1,114 2,180 3,153
Gross Profit Subcontract 116 109 233 189
Gross Profit Service 398 289 1,042 983
Total Gross Profit 1,435 1,512 3,455 4,325
Gross Profit Product % 32% 31% 31% 33%
Gross Profit Subcontract % 19% 24%
19% 27%
Gross Profit Service % 34% 27% 30% 31%
Revenues
The Company's product revenues during the three and nine months ended June 30,
2002 decreased from the comparable prior year periods, representing decreases of
20% and 26% for the respective periods. These decreases in product revenues
resulted from a general slowdown in economic activity in the Company's principal
markets, New York City and Dallas. In addition, the events of September 11th
delayed work on several projects involving New York City Transit Authority and
reduced tenant revenue as tenants relocated out of New York City, consolidated
into existing space uptown or moved into space in "move in" condition that had
been abandoned or offered for sublease.
Subcontract revenue increased during the current three and nine month periods as
the Company was responsible for electrical installation on several large fire
alarm projects in 2002.
Service revenues increased during the current three and nine month periods. The
increase reflects higher call-in maintenance service on fire systems as
replacement parts and service were subsequently needed in certain buildings
affected by contamination from the events of September 11th.
Gross Profit
Gross profit on product revenues for the three months and nine months ended June
30, 2002, decreased 17% and 31% for the respective prior year periods. The
decrease in absolute gross profit during both periods is primarily related to
lower sales (noted above) and related gross margin caused in part by the events
of September 11th and from the slowdown in economic activity. However, the
increase in gross profit percentage during the current three month period
reflects a lower material component on project activity during the period. In
contrast, the decrease in gross profit percentage in the current nine month
period is due to certain labor cost overruns on several large projects and
greater material component on products sold. In addition, during the nine month
period of 2002,certain fixed overhead costs increased due to wage increases. Due
to the relative fixed nature of these costs, gross profit as a percentage of
sales declined from lower sales on which to absorb these costs. In contrast,
during the 2001 nine month period, gross profit includes the revenue benefit
from a non-recurring engineering and product management contract (professional
service with no material content).
Gross profit related to subcontract revenues for the three and nine months ended
June 30, 2002 increased in absolute terms as the Company was responsible for
electrical installation on two large fire alarm projects in 2002. However, the
gross profit percentage was lower during 2002 as one project was contracted for
sale at a lower than normal mark up.
Gross profit on service revenues for the three and nine months ended June 30,
2002 increased due to the increase in call in service revenues. During the nine
month period, the decline in gross profit percentage from service was due to
certain wage increases to service technicians that could not be passed on to
service contracts.
Income Before Tax
The decline in income before income taxes during the three and nine months ended
June 30, 2002 is primarily due to a decrease in gross margin caused by the
decline in product revenues (brought about by the general slowdown of economic
activity and delays on certain projects caused by the events of September 11th)
and from higher fixed overhead costs (noted above). In contrast, the nine month
period of 2001 included the favorable effect of an engineering and product
management contract. Also contributing to the decline in income before income
taxes was an increase (8% during the three month period and 6% during the nine
month period) in selling, general and administrative expenses to support higher
product sales and expand product territory. This increase includes additional
staffing to service the Company's railcar communication customers as it
addresses a marketing opportunity for future business over the next several
years. Favorably affecting income before income taxes were declines in interest
expense (24% and 37%) due to lower interest rates for the three and nine months
ending June 30, 2002, respectively.
Tax Provision
The Company's current income tax benefit represents federal, state and local
income tax savings from the carryback of a portion of the 2002 operating loss.
Deferred taxes represent the net increase in deferred tax assets as it relates
to certain book provisions to be deducted in future tax returns as well as a
carryforward of a portion of the 2002 operating loss.
Order Position
The Company's order position, excluding service, at June 30, 2002 amounted to
$14,700,000 as compared to $8,900,000 at June 30, 2001 and $7,800,000 at
September 30, 2001. This is a record backlog and the increase in order position
reflects large new orders received for several subway complexes. These new
orders plus $2.2 million of recent orders for communication and announcement
systems from several transit car manufacturers will be shippable over the next
36 month period. While quotation activity is brisk, there is no assurance when
orders will be received and whether the order position will increase. Due to the
fact that the Company's products are sold and installed as part of larger
construction on mass transit projects, there is typically a delay between the
booking of the contract and its revenue realization. The Company expects to
fulfill the majority of its backlog (exclusive of orders for transit cars) over
the next twelve to twenty four months. The order position includes, and the
Company continues to bid on projects that might include significant
subcontractor labor, involving electrical installation by others at low margin
but setting a platform for future product additions, tenant installations and
service revenues.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
Not applicable
Item 3. Defaults Upon Senior Securities.
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Registrant's Annual Meeting of Stockholders was held on May 22,
2002. At the meeting, Stockholders considered and voted upon (1) the election of
seven (7) directors to Firetector's Board of Directors, the appointment of
Marcum & Kliegman, LLP. as Firetector's Auditors for the fiscal year ending
September 30, 2002, and to amend the Company's Certificate of Incorporation to
change Firetector's name to SYNERGX SYSTEMS INC.
The seven nominees for director were unopposed and were, accordingly
elected by the Stockholders. The following table details the votes cast for,
against and abstained from voting on each matter considered by the Stockholders.
MATTER FOR AGAINST ABSTAINED
Daniel Tamkin 1,579,014 4,656 0
John Poserina 1,579,014 4,656 0
Henry Schnurbach 1,579,014 4,656 0
Joseph Vitale 1,579,014 4,656 0
Dennis McConnell 1,579,014 4,656 0
J. Ian Dalrymple 1,579,014 4,656 0
Mark I. Litwin 1,579,014 4,656 0
Auditors 1,579,555 3,257 859
SYNERGX SYSTEMS 1,579,103 7,388 1,180
Item 5. Other Information.
Item 6. Exhibits and Reports on form 8-K.
(a) Exhibits 10. Fourth Amendment to Credit Agreement, dated as of June 24,
2002, among Synergx Systems Inc., General Sound (Texas) Company, Casey
Systems Inc. and Pyrotech Service Inc. as co-borrowers and Citizens
Business Credit Company as lender.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June
30, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SYNERGX SYSTEMS INC
(Registrant)
/s/ John A. Poserina
------------------------------
John A. Poserina,
Chief Financial Officer
(Principal Accounting and
Financial Officer), Secretary
and Director
Date: August 14, 2001