ARCX DD,
Address
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Affiliated Resources Corporation
(Former Name Synaptix Systems Corporation)
3050 Post Oak Boulevard, Suite 1080 Houston, Texas 77056
Phone
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Name and telephone number of person to contract.
Peter C. Vanucci 713-355-8940
ARCX link to EVSI
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EVANS SYSTEMS INC (EVSI)
In February 1998, ESI discontinued operations in the packaging and marketing of automotive after-market chemical products, previously operated through its wholly-owned subsidiary, ChemWay Systems, Inc.
("ChemWay"). On December 30, 1998, the Company sold ChemWay to Affiliated Resources Corporation ("Affiliated") in a stock-for- stock transaction. In exchange for the common stock of ChemWay, the Company
received 1,500,000 shares of Affiliated common stock; the number of shares of Affiliated common stock could be subject to a "make whole" provision whereby the Company could receive up to an additional 1,000,000 shares of Affiliated common stock should the market
value of such stock be below $6 million at the one year anniversary of the closing of the transaction The Company recorded a gain of $915,000 (net of a provision for income taxes of $211,000) on the
disposition of ChemWay
ChemWay stuff
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ChemWay blends and packages chemicals for the automotive aftermarket in aerosol and liquid containers, from 4 ounce containers to 55
gallon drums. The plant is located eight miles south of Bay City, Texas, on the Colorado River, in an industrial park on a 13 acre site. ChemWay also added a 55,000 square foot distribution facility in early 1997 to centralize the distribution of its products. Aerosol packaging constitutes the largest share of production, with the liquid line growing in proportion to general company growth. The major
aerosol products are refrigerants packaged in 12 ounce high pressure cans and 30 pound disposable cylinders.
ChemWay had sales of $10,967,000 in 1997 compared to $25,773,000 in 1996; a $14,806,000 (57.4%) decrease. The decrease was mainly
attributable to a decrease in R-12 sales of $12,269,000. Gross profit for 1997 and 1996 was $1,078,000 and $4,422,000, respectively.
ARCX HISTORY
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Synaptix Systems Corporation, formerly known as Basic Natural Resources, Inc. (the "Company"), was incorporated in the State of Colorado inDecember 1986 under the name Euram Capital Corporation and became a publiccompany in August 1987. By June 30, 1995, the Company had divested itself of allof its assets and had ceased operations. In December, 1996, approximately 90% of the issued and outstandingshares
of stock of the Company were acquired by Alan W. Harvey, its Presidentand CEO, in connection with the acquisition of assets of Swallen InvestmentsCorp., a company engaged in the development and marketing of computer softwareequipment (the "Software Assets").
The Software Assets included the rights to an incomplete software code related to EAGLE, a wireless communication software program under development. Although the Company anticipated that it would be able to provide related systems integration and networking services in connection with the license of the Software Assets, the Company lacked the resources and funding to develop the Software Assets and to deliver the product to market in a timely manner. For that
reason, and in connection with a management change in March 1998, the Company sold the Software Assets to Mobilelink Communications, Inc. ("Mobile"). The Company retained a five percentinterest in Mobile's
gross sales of the Software Assets, beginning with thefiscal quarter ending June 30, 1998. If gross sales do not exceed $200,000within 24 months from the closing date of the transaction, then the SoftwareAssets will be returned to the Company. Also as a result of the management change in March 1998, the Companywas repositioned to focus on the acquisition of those companies whose product orservice
is technically innovative and market proven, but whose marketpenetration can be significantly expanded through enhanced marketing oradditional capitalization. To that end, in March 1998, the
Company entered intoan agreement to purchase Frontier Services, Inc., an oilfield service company engaged in the high pressure testing of tubular pipe, pipelines and valve assemblies in the oil and gas industry. That acquisition is expected to be consummated by October
25, 1998. In addition, in July 1998, the Company acquired, in exchange solely for shares of the Company's voting stock, all of the stock of CobolTexas Inc., a company that has a software product that uses on-line technology to solve the Year 2000 technology (Y2K) problems for COBOL and PL1 software users. Finally, the Company entered into a letter of intent dated September 23, 1998 to acquire all the outstanding stock of ChemWay Systems, Inc., a corporation that blends and packages chemicals for the automotive aftermarket. Management believes that each of these companies is uniquely suited to management's business plan to focus on the acquisition of those
companies whose product or service is technically innovative and market proven, but whose market penetration can be significantly expanded through enhanced marketing or additional capitalization, and
believes that these acquisitions will generate sufficient revenues and provide an asset base for continued growth. In May 1998, an Assumed Name Certificate for Synaptix SystemsCorporation was filed
with the Office of the Secretary of State of the State of Texas, to enable the Company to conduct business under the name AffiliatedResources Corporation. A proposal will be made for approval of a change of theCompany's name to Affiliated Resources Corporation
at the 1998 Annual Meeting ofShareholders. Management plans to expand the Company through acquisitions, principally in exchange for stock of the Company. Management is confident that current discussions with investors will yield additional capital to complete its proposed acquisitions and provide sufficient working capital for future
operations. Patents, Trademarks, Licenses As of June 30, 1998, the Company's fiscal year end, the only asset ofthe Company was its rights under the Asset Purchase Agreement in connection withthe sale of its Software Assets. The Company retained a five percent interest inMobile's gross sales of the Software Assets, beginning with the fiscal quarterending June 30, 1998. In March 1998, Mobile transferred the Software Assets toTitan Wireless. As of June 30, 1998, Titan Wireless had not completed thedevelopment of the Software Assets. In the event gross sales do not equal$200,000 by March 26, 2000, the Software Assets will be returned to Synaptix. The Company has been,
and will continue to be, required to disclose itstrade secrets and proprietary know-how not only to employees and consultants,but also to potential corporate partners, collaborators, and contract manufacturers. There can be no assurance that any confidentiality
agreementsthat the Company may enter into with such persons will not be breached, that theCompany would have adequate remedies for any breach, or that the Company's tradesecrets and proprietary know-how will not otherwise become known or beindependently discovered by competitors. |
