SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
(MARK ONE)

  X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
-------                                                         
         SECURITIES EXCHANGE ACT OF 1934
         For the quarterly period ended December 31, 1997

         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: 33-15097-D
                          SYNAPTIX SYSTEMS CORPORATION
             (Exact name of registrant as specified in its charter)

                  Colorado                              84-10457105
         (State or other Jurisdiction of                (I.R.S. Employer
         incorporation or organization)              Identification Number)


         2450 South Shore Boulevard
         Suite 210, Houston Texas                                77573
       (Address of Principal Executive Offices)               (Zip Code)

       Registrant's telephone number, including area code: (281) 334-0405

         Check whether the issuer (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 (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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date.

Common Stock, $.003 Par Value                     15,593,700
                                   (Shares outstanding as of December 31, 1997)

Transitional Small Business Disclosure Format (Check One)   Yes        No     X

                                        1

<PAGE>

                          SYNAPTIX SYSTEMS CORPORATION
                          (A Development Stage Company)
                 QUARTERLY REPORT ON FORM 10-QSB FOR THE INTERIM
                         PERIOD ENDED December 31, 1997

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      Number

<S>                                                                                                  <C>   
Part I.    Financial Information

Item I.    Financial Statements

           Balance Sheets at December 31, 1997 and June 30, 1997.......................................... 4

           Statements of Operations for the Six Months Ended December 31,
           1997 and 1996...................................................................................5

           Statements of Changes in Stockholders' Deficit for the Year Ended
           June 30, 1997 and Six Months Ended December 31, 1997............................................6

           Statements of Cash Flows for the Six Months Ended December 31,
           1997 and 1996...................................................................................7

           Notes to  Financial Statements..................................................................8

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations...........................................................................8

Part II.   Other Information

Item 1.    Legal Proceedings..............................................................................12

Item 5.    Other Information..............................................................................13

Item 6.    Exhibits and Reports on Form 8-K...............................................................14

           Signatures.....................................................................................14
</TABLE>


                                        2

<PAGE>


                                 SMITH & COMPANY
                          CERTIFIED PUBLIC ACCOUNTANTS

MEMBERS OF:                                  10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF                        SALT LAKE CITY, UTAH 84101
     CERTIFIED PUBLIC ACCOUNTANTS            TELEPHONE:       (801) 575-8297
UTAH ASSOCIATION OF                          FACSIMILE:       (801) 575-8306
     CERTIFIED PUBLIC ACCOUNTANTS            E-MAIL: smith&co@smithandcocpa.com
--------------------------------------------------------------------------------



                          INDEPENDENT AUDITOR'S REPORT


The Board of Directors and Shareholders
Synaptix Systems Corporation
Houston, Texas

The accompanying  balance sheet of Synaptix  Systems  Corporation as of December
31, 1997 and the related statements of operations,  shareholders'  deficit,  and
cash flows for the six months ended  December 31, 1997 and 1996 were not audited
by us and, accordingly, we do not express an opinion on them.

The balance sheet as of June 30, 1997 and the statement of stockholders' deficit
for the  year  ended  June 30,  1997  were  audited  by us and we  expressed  an
unqualified  opinion  on it in our  report  dated  October  7, 1997  which  also
contained a going  concern  paragraph,  but we have not  performed  any auditing
procedures since that date.


                                                  /s/ Smith & Company
                                                   CERTIFIED PUBLIC ACCOUNTANTS

Salt Lake City, Utah
February 17, 1998


                                        3

<PAGE>

                          SYNAPTIX SYSTEMS CORPORATION
                          (A Development Stage Company)
                                 Balance Sheets



<TABLE>
<CAPTION>
                                                                                  December 31, 1997     June 30, 1997
                                                                                     (Unaudited)            (Audited)
                                                                                  -----------------     -----------------
ASSETS

Current Assets:
<S>                                                                               <C>                   <C>              
     Cash and cash equivalents                                                    $           2,583     $             989
     Prepaid expenses                                                                        11,045                72,770
                                                                                  -----------------     -----------------

                                                          Total Current Assets               13,628                73,759

PROPERTY, PLANT, & EQUIPMENT                                                                 94,260               100,873
                                                                                  -----------------     -----------------

                                                                  Total Assets    $         107,888     $         174,632
                                                                                  =================     =================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:

     Accounts payable and accrued liabilities                                     $         378,692     $         163,373
     Loans payable - related parties                                                        431,439                     0
     Current portion of lease                                                                 1,221                 1,099
                                                                                  -----------------     -----------------

                                                     Total Current Liabilities              811,352               164,472
     Long-term lease                                                                            943                 1,239
                                                                                  -----------------     -----------------
                                                             Total Liabilities              812,295               165,711

Stockholders' Equity (Deficit):

     Preferred Stock - $1 par value 10,000,000  shares  authorized;  
         0 shares of Series A Voting Preferred Stock
         outstanding at December 31, 1997 and June 30, 1997                                       0                     0

     Common Stock - $.003 par value,  25,000,000 shares  authorized;  
         15,593,700 shares issued and outstanding at December 31, 1997
         and 15,473,700 shares issued and outstanding at June 30, 1997                       46,781                46,421

     Additional paid-in capital                                                           5,370,336             5,337,647
     Retained earnings (deficit)                                                         (5,921,524)           (5,175,147)
     Stock subscription receivable                                                         (200,000)             (200,000)
                                                                                  -----------------     -----------------

                                          Total Stockholders' Equity (Deficit)             (704,407)                8,921
                                                                                  -----------------     -----------------

                          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)    $         107,888     $         174,632
                                                                                  =================     =================
</TABLE>


               See Accompanying Notes to the Financial Statements.

                                        4

<PAGE>

                          SYNAPTIX SYSTEMS CORPORATION
                          (A Development Stage Company)
                            Statements of Operations
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                             Six Months Ended
                                                                                               December 31,
                                                                                        1997                  1996
                                                                                     (Unaudited)           (Unaudited)
                                                                                  -----------------     -----------------
<S>                                                                               <C>                   <C>              
REVENUES                                                                          $               0     $               0

Cost and Expenses:                                                                          746,377                46,050
                                                                                  -----------------     -----------------

                                                      Total Costs and Expenses              746,377                46,050
                                                                                  -----------------     -----------------

Income (loss) from Continuing Operations:                                                  (746,377)              (46,050)

     Income tax expense (benefit)                                                                 0                     0
                                                                                  -----------------     -----------------

                                                             Net Income (Loss)    $        (746,377)    $         (46,050)
                                                                                  =================     =================

                                                       Income (Loss) Per Share    $            (.05)    $            (.58)
                                                                                  =================     =================
</TABLE>




               See Accompanying Notes to the Financial Statements.

                                        5

<PAGE>

                          SYNAPTIX SYSTEMS CORPORATION
                          (A Development Stage Company)
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                    For Year Ended June 30,1997 (audited) and
                   For the Six Months Ended December 31, 1997
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                                                           Total
                                                                                            Additional     Retained    Stockholders'
                                             Common                     Preferred             Paid-In      Earnings        Equity
                                    Shares          Amount        Shares         Amount       Capital      (Deficit)      (Deficit)
                                   ----------     -----------   ----------    -----------   -----------   -----------    ----------

<S>                               <C>             <C>           <C>           <C>           <C>           <C>            <C>        
BALANCES AT JUNE 30, 1996              39,668     $       119      174,865    $   174,865   $ 4,610,729   $(4,826,922)   $  (41,209)

Sale of restricted common stock
   for cash                         1,217,500           3,652                                                                 3,652
Issuance of restricted common stock
   for expenses                        58,334             175                                    20,825                      21,000
Issuance of common stock for
   preferred shares                   174,865             525     (174,865)      (174,865)      174,340
Sale of common stock (Regulation
   S) for stock subscription        2,000,000           6,000                                   194,000
Sale of common stock (S-8) for
   cash and services                6,750,000          20,250                                   251,500                     271,750
Sale of restricted common stock for
   cash, assets, and expenses       2,250,000           6,750                                    27,000                      33,750
Issuance of restricted common stock
   for assets and expenses          3,000,000           9,000                                    69,203                      78,203
Cancellation of restricted stock      (16,667)            (50)                                   (9,950)                    (10,000)

Net loss                                                                                                     (348,225)     (348,225)
                                   ----------     -----------   ----------    -----------   -----------   -----------    ----------

BALANCES AT JUNE 30, 1997          15,473,700          46,421            0              0     5,337,647    (5,175,147)        8,921

Sale of restricted common stock for
   cash                                20,000              60                                    15,940                      16,000
Issuance of restricted common stock
   to pay accounts payable            100,000             300                                    16,749                      17,049

Net loss                                                                                                     (746,377)     (746,377)
                                   ----------     -----------   ----------    -----------   -----------   -----------    ----------

BALANCES AT December 31,
      1997                         15,593,700     $    46,781            0    $         0   $ 5,370,336   $(5,921,524)   $ (704,407)
                                   ==========     ===========   ==========    ===========   ===========   ===========    ==========
</TABLE>


               See Accompanying Notes to the Financial Statements.

                                        6

<PAGE>
                          SYNAPTIX SYSTEMS CORPORATION
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                  Six Months Ended
                                                                                                    December 31,
                                                                                             1997                  1996
                                                                                      ------------------    ------------------
CASH FLOWS OPERATING ACTIVITIES:
<S>                                                                                   <C>                   <C>                
     Net (loss)                                                                       $         (746,377)   $          (46,050)
     Adjustments to reconcile net (loss) to net cash used in
         operating activities:
              Depreciation                                                                        14,588                     0
              Stock issued for expenses                                                                0                21,000
     Changes in Assets and Liabilities:
              Prepaid expenses                                                                    61,725                     0
              Accounts payable and accrued expenses                                              232,368                16,650
                                                                                      ------------------    ------------------

                                              Net Cash Used by Operating Activities             (437,696)               (8,400)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of equipment                                                                        (7,975)                    0
                                                                                      ------------------    ------------------

                                              Net Cash Used by Investing Activities               (7,975)                    0

CASH FLOWS FROM FINANCING ACTIVITIES:
     Sale of common stock                                                                         16,000                 3,652
     Loans                                                                                       431,439                 8,400
     Loan repayments                                                                                (174)                    0
                                                                                      ------------------    ------------------
                                          Net Cash Provided by Financing Activities              447,265                12,052
                                                                                      ------------------    ------------------

                                                               Net Increase in Cash                1,594                 3,652

CASH AT BEGINNING OF YEAR                                                                            989                     0
                                                                                      ------------------    ------------------

CASH AT END OF PERIOD                                                                 $            2,583    $            3,652
                                                                                      ==================    ==================

SUPPLEMENTAL CASH FLOW INFORMATION
     Interest paid                                                                    $               46    $                0
     Income taxes paid                                                                                 0                     0
                                                                                      ------------------    ------------------

                                                                                      $               46    $                0
                                                                                      ==================    ==================
</TABLE>



               See Accompanying Notes to the Financial Statements.

                                        7

<PAGE>
                          SYNAPTIX SYSTEMS CORPORATION
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997


1.       Basis of Presentation

         The  financial   statements  of  Synaptix   Systems   Corporation  (the
"Company"),  included  herein,  are unaudited for all periods ended December 31,
1997 and 1996.  They reflect all  adjustments  (consisting  of normal  recurring
adjustments) which are, in the opinion of management, necessary to fairly depict
the results for the periods presented. Certain information and note disclosures,
normally included in financial  statements prepared in accordance with generally
accepted accounting principles, have been condensed or omitted pursuant to rules
and regulations of the Securities and Exchange Commission.  It is suggested that
these  financial  statements be read in conjunction  with the audited  financial
statements for the years ended June 30, 1997 and 1996, which are included in the
Company's  annual report.  The Company believes that the disclosures made herein
are adequate to make the information presented not misleading.

2.       Earnings per Common and Common Equivalent Share

Earnings per common and common  equivalent  share is based on the average number
of common shares and dilutive common share  equivalents  outstanding for the six
months ended December 31, 1997 and 1996.

Item 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

         The following discussion contains forward-looking statements within the
meaning of Section 21E of the Securities  Exchange Act of 1934, as amended,  and
Section 27A of the  Securities  Act of 1933,  as amended,  and is subject to the
safe harbors created by those sections.  These forward-  looking  statements are
subject to significant  risks and  uncertainties,  including those identified in
the  section of this Form  10-QSB  and in the  Company's  Annual  Report on Form
10-KSB,  filed with the SEC on November 4, 1997,  which may cause actual results
to differ materially from those discussed in such forward-looking statement. The
forward-looking  statements within this Form 10-QSB are identified by words such
as  "believes,"  "anticipates,"  "expects,"  "intends,"  "may" and other similar
expressions.  However,  these words are not the exclusive  means of  identifying
such  statements.  In  addition,  any  statements  which refer to  expectations,
projections or other  characterizations  of future events or  circumstances  are
forward  looking  statements.  The Company  undertakes no obligation to publicly
release the results of any revisions, to these forward-looking  statements which
may be made to  reflect  events or  circumstances  occurring  subsequent  to the
filing of this Form 10-QSB with the Securities and Exchange Commission.  Readers
are urged to carefully  review and consider the various  disclosures made by the
Company  in this  report  and in the  Company's  other  reports  filed  with the
Securities and Exchange  Commission,  including its Form 10-KSB, that attempt to
advise interested parties of the risks and factors that may affect the Company's
business.



                                        8

<PAGE>



The  Company  had a  working  capital  deficiency  at  December  31,  1997,  and
subsequent thereto,  and is uncertain of its ability to raise sufficient working
capital.  The Company  plans to seek  additional  financing to obtain  necessary
working  capital  to  complete  development  of its  Software  and  to  commence
production and  marketing,  but there can be no assurance that such funding will
occur.

Introduction

         Synaptix  is a  development  stage  company.  Certain of the  Company's
software products are directed to the retail consumer market, and certain of the
Company's  software products are directed to the corporate market.  With respect
to the Company's  corporate software products,  the Company  anticipates that it
will be able to provide related systems  integration and networking  services in
connection  with the license of its corporate  software  products.  These system
integration services will include consulting and training to systems integrators
and large  corporate  end users and the  installation  of  hardware  on which to
implement  the  Company's  software's  products.  The  following  discussion  is
included to describe the Company's  financial position and results of operations
for each of the two  years for the six  months  ended  December  31,  1997.  The
financial  statements and notes thereto contain detailed information that should
be referred to in conjunction with this discussion.

Results of Operations

         Analysis of Six Months ended December 31, 1997 Compared to Six Months 
         ended December 31, 1996

         Costs and expenses for the six months ended December 31, 1997 increased
significantly  compared to the same period in 1996.  The Company  recorded a net
loss of $746,377,  or a ($.05) loss per share for the six months ended  December
31, 1997,  compared  with a net loss of $46,050,  or a ($.58) loss per share for
the same period in 1996. The Company incurred expenses in the amount of $746,377
related to general and  administrative  costs associated with the development of
its software.  The Company was non-operational for the six months ended December
31, 1996.

         Revenues

         The  Company  did not record  any  revenues  for the six  months  ended
December  31, 1997 or 1996,  respectively.  During  these  periods,  the Company
borrowed  funds to pay for working  capital  expenditures.  The Company plans to
seek  additional  financing  to obtain  necessary  working  capital to  complete
development of its software and to commence production and marketing. Management
anticipates that the Company's  funding  requirements will be in the range of $3
to $5 million over the next 12 months.  The Company may seek such financing from
venture capital sources or from a subsequent public issuance of stock.

         Financial Condition

         The Company is currently in a development  stage,  and the information,
financial statements and notes to the financial statements have been prepared on
the  premise  that it will be  successful  in  raising  additional  capital  and
continue  as a going  concern.  The  Company  intends to rely on further  equity
offerings  and loans to generate  sufficient  working  capital  over the next 12
months to complete the Eagle project and introduce it to the market. The Company
anticipates   that  working  capital   expenditures,   including  costs  of  the
development of its new computer program  code-named Eagle, will be approximately
$1.2 million during fiscal 1998. There can be no assurance that the Company will
be able to raise sufficient additional capital to achieve these objectives.


                                        9

<PAGE>



         General and Administrative Expenses

         General and  administrative  expenses were $746,377 and $46,050 for the
six months  ended  December  31,  1997 and 1996,  respectively,  an  increase of
$700,327.   This   increase   was   attributable   to  expenses   incurred   for
administrative,  legal,  accounting  expenses and expenses  associated  with the
development of its software.

         Loss from Operations

         The Company had an operating  loss of $746,377 for the six months ended
December  31, 1997 and  $46,050  for the same  period in 1996.  The loss for the
period ended December 31, 1997, was the result of operating expenses incurred in
the  development  and production of the Eagle software  product,  in addition to
general and administrative costs.

         The Company  expects that operating  results will fluctuate as a result
of a number of factors, including:  whether the Company will continue as a going
concern, the timing of new product and service  introductions by the Company, as
well  as by  its  competitors,  changes  in the  Company's  level  of  operating
expenses,  including the Company's expenditures for software product development
and  promotional  programs,  the size and  timing  of  customer  orders  for its
products and services,  development,  production or quality problems on the part
of the  Company,  competition  in the computer  software  market and the general
state of the global and national  economies.  The market  demand for  commercial
software  products  and  services  can be  significantly  affected by  uncertain
economic  cycles.  Many of the factors that may affect the  Company's  operating
results and demand for products and services based on its technologies cannot be
predicted,  may not exhibit a consistent trend, or are substantially  beyond the
Company's  control.  Fluctuations  in operating  results can also be expected to
result in volatility in the price of the Company's common stock.

         Income Taxes

         The Company had no income tax expense.  As of December  31,  1997,  the
Company had net operating loss  carryfowards of  approximately  $4,151,000.  The
utilization  of net  operating  carryforwards  will  be  limited  as  determined
pursuant  to  applicable  provisions  of the  Internal  Revenue  Code  and U. S.
Treasury regulations thereunder.

         Net Loss

         The  Company  had a net  loss of  $746,377  for the  six  months  ended
December  31, 1997,  compared  with a net loss of $46,050 for the same period in
1996. The net loss for the six months ended  December 31, 1997 was  attributable
to  an  increase  in  administrative   operating   expenses.   The  increase  in
expenditures  in  administrative  expenses was  anticipated  under the Company's
operating plan following the acquisition of the software products.


                                       10

<PAGE>



         Liquidity and Capital Resources

         There were no recorded  revenues for the six months ended  December 31,
1997. At December 31, 1997, the Company maintained a negative liquidity position
which is  evidenced  by a current  ratio of .02 to 1. The  Company  has no major
capital commitments at the present time. Management continues to restructure the
Company in order to increase the  Company's  current  ratio and  liquidity,  and
generate capital which would provide cash flow for future expansion.

         At December 31, 1997, the Company had a working  capital  deficiency of
$797,724,  compared to a working  capital  deficiency of $62,607 at December 31,
1996.  Subsequent to December 31, 1997, the Company's working capital deficiency
has  continued  to  increase.   The  cash  balance  at  December  31,  1997  was
approximately $2,583, and at December 31, 1996, was approximately $3,652.

         Cash used by  operations  totaled  $437,696  for the six  months  ended
December 31, 1997,  compared to $8,400 for the same period in 1996. Cash used in
investing   activities   for  the  six  months  ended   December  31,  1997  was
approximately  $7,975.  Cash  provided by  financing  activities  during the six
months ended  December 31, 1997 totaled  $447,265,  which  included the proceeds
from the sale of stock and the borrowing of funds.

         The Company  holds  promissory  notes from  investors  in the amount of
$200,000  which were due and payable on November 15,  1997.  These funds will be
used for working capital purposes in connection with existing obligations of the
Company,  and future  expenses to be incurred in the research and development of
the Eagle software  product,  and for general  corporate  purposes.  There is no
assurance that the Company will obtain  adequate  financing or access to capital
to continue as a going concern.

         Analysis of Six Months ended December 31, 1996 Compared to Six Months 
         ended December 31, 1995

         During the six months  ended  December  31,  1996,  the  Company had no
active  operations,  $3,652 in cash, a working capital  deficit of $62,607,  and
accumulated losses of $4,872,972.  The Company was considering entering into the
computer technology industry,  and a management change. The Company continued to
seek acquisition and merger  candidates with an emphasis in the area of computer
related  technologies.  Management  believed that an  acquisition of this nature
would provide an opportunity to enhance shareholder value.

         Liquidity and Capital Resources

         At December 31, 1996, and 1995, respectively,  the Company maintained a
negative  liquidity  position.  The  Company had ceased all  operations  and was
looking for an acquisition candidate.


                                       11

<PAGE>



PART II           OTHER INFORMATION

Item 1.           Legal Proceedings

         Synaptix has been named as a defendant in an action by Charles Schwab &
Co.  entitled  Charles  Schwab & Co., Inc. v. Alan W. Harvey,  Synaptix  Systems
Corporation, and Signature Stock Transfer Incorporated,  case no. 98-01336 filed
in the District Court of Harris County, Texas. The suit alleges causes of action
(i) against  Synaptix for fraud and wrongful  refusal to transfer  shares,  (ii)
against Alan Harvey,  the former president of Synaptix,  for fraud and breach of
contract,  and (iii) against  Signature,  the registrant's stock transfer agent,
for wrongful refusal to transfer shares and negligence.

         This action arises out of the attempted  sale by Alan Harvey of 100,000
shares of Synaptix stock represented by a canceled stock certificate. Harvey had
previously  represented  to  Synaptix  and its  transfer  agent  that the  stock
certificate  had been lost,  and arranged for a  replacement  certificate  to be
issued to him. Shortly before Harvey's resignation as president,  and unknown to
Synaptix,  Harvey deposited the canceled  certificate in his personal account at
Charles  Schwab  &  Co.  A  portion  of  the  shares  were  sold  before  Schwab
representatives   contacted  the  transfer  agent  for  re-   registration   and
verification  of the  certificate.  After the transfer agent advised Schwab that
the certificate had been canceled, Schwab acquired other shares in the market to
cover the shares  sold which were  represented  by the  canceled  certificate  .
Schwab alleges that Harvey intentionally misrepresented the canceled certificate
as a valid  certificate.  Because Harvey was then president of Synaptix,  Schwab
claims that Synaptix is liable for Harvey's actions.  Synaptix has denied all of
Schwab's  allegations,  and maintains  that Harvey acted in his own capacity and
not as an agent of the Company,  and that  Schwab's loss was a result of its own
negligence.  Synaptix has also assumed the defense of Signature  Stock Transfer,
Inc., who Schwab has alleged  wrongfully  refused to transfer  Harvey's canceled
certificate.  Synaptix  intends to file a  cross-action  against Alan Harvey for
indemnification. At this time, management does not believe that this action will
have a material adverse effect on the Company.

         A former  legal  firm  employed  by the  Company  is in the  process of
obtaining  a default  judgment  against  the  Company  for unpaid  fees of about
$12,000.  The $12,000 is reflected in accounts payable, and management is in the
process of settling this matter.

         Certain  shareholders of the Company are also  shareholders of Synaptix
Systems Corporation  ("Synaptix Florida"),  a Florida corporation not affiliated
with the Company.  Synaptix  Florida was formed in 1996 by Alan W.  Harvey,  the
former  president  of the  Company,  with the  intention  of  acquiring  the Old
Synaptix  assets and  developing  the  software.  Funds were  raised by Synaptix
Florida from third-party  investors for this purpose,  although to the Company's
best  knowledge  Synaptix  Florida  never  entered into any actual  agreement to
acquire the Old Synaptix assets from the owner.

         In  December  1996,  Mr.  Harvey  acquired  control of the  Company and
contracted with Swallen Investment Corp. to acquire the Old Synaptix assets. Mr.
Harvey,  in his  personal  capacity,  represented  to certain  Synaptix  Florida
shareholders  that they  would  receive  stock in the  Company in place of their
Synaptix  Florida shares;  these  representations  and the existence of Synaptix
Florida were not  disclosed to the Board of Directors by Mr.  Harvey until June,
1997. At that time, the Company wrote to the shareholders of Synaptix Florida to
inquire as to their interest in exchanging  their shares for Company  stock,  in
anticipation  of a projected  merger of the two companies.  No offer to exchange
shares was made at that time. Since that date, the Company learned that Synaptix
Florida had substantial undisclosed liabilities and has abandoned

                                       12

<PAGE>



plans to merge  the  companies.  In  November  1997,  the  holders  of record of
Synaptix  Florida  shares were issued  shares of common  stock of the Company in
exchange  for  Synaptix  Florida  stock.  The stock  was  issued  from  Variable
Resources,  Inc.,  a company held by Alan W.  Harvey,  and the Synaptix  Florida
shares  returned  in  exchange  were  canceled  . There was no  dilution  of the
Company's stock as a result of this transaction.

         Synaptix  Florida is not currently  conducting any operations.  Alan W.
Harvey  remains the  president  of that  company.  The funds  raised by Synaptix
Florida  apparently  were expended in anticipation of acquisition of the assets.
Mr.  Harvey has  alleged,  on behalf of Synaptix  Florida,  that some portion of
these funds were loaned or otherwise  contributed  to the  Company.  The Company
cannot confirm any such loans or contributions of funds from Synaptix Florida.

         The Company has determined that potential claims by Synaptix Florida or
its shareholders could be asserted against Alan Harvey, and potentially  against
the Company as well, in connection  with the  Company's  acquisition  of the Old
Synaptix assets and the alleged loans or contribution of Synaptix  Florida funds
to the Company,  although the Company does not believe that any such claim would
be  upheld as  against  it. In order to settle  any such  claims,  Mr.  Arley L.
Harvey,  Alan Harvey's father,  has agreed to have Variable  Resources,  Inc., a
company  controlled  by Arley L.  Harvey,  acquire all rights to any  derivative
claims from the  shareholders of Synaptix  Florida in exchange for shares of the
Company's  stock held by Variable  Resources,  and to provide the Company with a
complete release.  In addition,  in September,  1997, the Company entered into a
separate  Release  Agreement  with  Synaptix  Florida,  settling  all claims for
alleged  loans or  contributions  of funds to the  Company and  providing  for a
general  release  of  claims  between  the two  companies.  As a result of these
actions,  Management does not believe that these potential  claims will have any
material adverse effect upon the Company.

Item 5.           Other Information

         Synaptix is terminating  its employment  agreements with all but one of
its employees and is entering into independent contractor relationships in their
stead for completion of the Eagle software  project,  pursuant to the terms of a
Team Development Agreement.  Due to the Company's lack of cash flow, the Company
has been  unable to meet its payroll  obligations  on a current  basis,  and was
approximately  six (6) weeks  behind in wage  payments.  The  employees  and the
Company have agreed to compromise  these  obligations by issuing cash and shares
of common stock to Synaptix'  employees in settlement of wage claims.  The total
number of shares to be issued is 52,125.

         Going  forward,  the Company will  compensate  its former  employees as
independent  contractors.  Each Team Member will be  compensated  at the rate of
five hundred (500) shares of  registered  common stock of Synaptix for each week
of services  performed as verified and approved by the Team leader,  Bob Tucker.
The  registered  shares of common  stock will be issued to the Team  members who
have satisfactorily performed twenty (20) hours of work for each weekly issuance
of shares.  The share  certificates  shall be issued  within  seven days of each
month, or as soon thereafter as possible, following the period in which services
were  performed,  for  completion  of the Eagle  project.  In the event that the
Company's  financial  condition  improves,   it  anticipates   re-employing  the
independent contractors as full-time employees.


                                       13

<PAGE>



Item 6.           Director Resignation

     Mark F. Walz, a director of the Company,  resigned effective as of February
3, 1998.  Mr.  Walz was  elected in  December  1996 and has served as a director
since that time,  until his  resignation.  There was no dispute or  disagreement
between  the  management  of the  Company  or Mr.  Walz.  A  copy  of Mr.  Walz'
resignation letter is attached hereto as Exhibit 17.

Item 7.    Exhibits and Reports on Form 8-K

           A.       Exhibits

                    10(a)    Synaptix Systems Corporation PROJECT EAGLE
                             Development Team Agreement

                    10(b)    Settlement  Agreement  and  Release  by  and
                             between  Synaptix  Systems  Corporation  and
                             certain employees.

                    17       Letter of resignation of Mark F. Walz.

           B.       Reports on Form 8-K

                    None.


                                   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, hereunto duly authorized.


                                     SYNAPTIX SYSTEMS CORPORATION



Dated: February 26, 1998                By: /s/ Edward S. Fleming
                                              ----------------------
                                             Edward S. Fleming, President



                                       14

<PAGE>

                                                                   Exhibit 10(a)
                          Synaptix Systems Corporation
                                  PROJECT EAGLE
                           Development Team Agreement


         THIS   AGREEMENT   (the   "Agreement")   is   made   effective   as  of
_______________,  1998, by and among SYNAPTIX  SYSTEMS  CORPORATION,  a Colorado
corporation ("Synaptix"), and the following employees of Synaptix working on the
Eagle  Development  Team  (collectively,  the "Team Members" and  individually a
"Team Member"): BOB TUCKER ("Tucker");  LESLIE VARGAS ("Vargas");  DARYL ALLISON
("Allison");  DIANE  CAMPBELL  ("Campbell");  MIKE  BURDEOS  ("Burdeos");  CRAIG
HAMILTON ("Hamilton"); GREG GLOVER ("Glover"); and FELIX BALDERAS ("Balderas").

         The parties to this Agreement agree as follows:

         1.       Termination of Employment Agreements and Retention as 
Independent Contractors.

         1.1 In consideration of the covenants,  terms, and conditions set forth
herein,  the parties agree that the employment  agreements  between Synaptix and
the Team Members are hereby terminated effective as of _____________, 1998.

         1.2 During the term of this  Agreement,  the Team Member  will  furnish
consulting  services and advice as specifically  requested by Edward S. Fleming,
Synaptix'  President.  The services and advice will relate to work being done or
planned by Synaptix in connection with the development of that certain  computer
program  known as the Eagle  Project,  and will be  within  the area of the Team
Member's technical competence.

         1.3  Each  Team  Member's  services  will  be  performed  at  Synaptix'
facilities  at the  address  set forth  below,  and such other  places  that are
appropriate and are mutually agreed to by the Team Member and Synaptix.

         2.       Payment of Compensation.

         2.1 The  compensation  owed to the Team Members from  December 15, 1997
through  their last day of employment  on  ____________,  1998, is to be paid in
full for salary earned by a combination of cash and shares of registered  common
stock of Synaptix,  as set forth on Exhibit A attached hereto.  For the purposes
of this  compensation,  the common  stock will be valued at one dollar  ($1) per
share.



                                       15

<PAGE>



         3.       Release by Team Members.

         3.1 Each Team Member shall release  Synaptix from any and all liability
arising from or relating to compensation and employment  matters upon receipt of
the cash and common stock described  above.  The release shall be in the form of
Exhibit B attached hereto.

         4.       Restriction on Sale of Shares of Stock.

         4.1 Each of the Team Members  agrees to refrain from selling the shares
of  registered  common  stock  described on Exhibit A until after April 1, 1998;
provided,  however, that up to and including April 1, 1998, the company reserves
the right to pay all back  salary due the Team  Member in cash.  In such  event,
Synaptix agrees that it shall issue a stock certificate in the equivalent amount
of shares and bearing a restrictive  legend  thereon,  in exchange for the stock
certificate  evidencing  registered and  unrestricted  shares of Synaptix common
stock that the Team Member has  received,  and the Team Member  agrees to submit
the registered share  certificate to Synaptix for cancellation and to accept the
reissued share certificate bearing a restrictive legend.

         5.       Vargas and Tucker Employment.

         5.1 Team Members Vargas and Tucker shall have the option to continue as
employees  of the  company  under  their  current  terms of  employment.  At the
election of Vargas and Tucker,  Synaptix  and Vargas and Tucker shall enter into
good faith negotiations to renegotiate their employment agreements.

         6.       Remaining Team Members as Independent Contractors.

         6.1 Synaptix  understands and acknowledges  that the Team Members other
than Vargas and Tucker will pursue  full time  employment  with other  entities.
Each of  such  Team  Members  agrees  to work  for  Synaptix  as an  independent
contractors  and  not  as  an  employee  of  Synaptix.  Each  such  Team  Member
understands  and  agrees  that he or she has no power or  authority  to act for,
represent,  or bind  Synaptix  in any  manner.  Each  such Team  Member  further
acknowledges and agrees that he or she is not entitled to any medical  coverage,
life  insurance,  participation  in  company  savings  plan,  or other  benefits
afforded  to  Synaptix'  regular  employees.  If  Synaptix is required to pay or
withhold  any taxes or make any  other  payment  with  respect  to  compensation
payable to a Team Member,  such Team Member will reimburse  Synaptix in full for
taxes paid,  and permit  Synaptix to make  deductions  for taxes  required to be
withheld from any sum due such Team Member.

         6.2 Each Team Member will  dedicate a minimum of twenty  hours (20) per
week to the Eagle  project.  Each Team Member will be compensated at the rate of
five hundred (500) shares of  registered  common stock of Synaptix for each week
of services  performed as verified and approved by the Team leader,  Bob Tucker.
The  registered  shares of common  stock will be issued to the Team  members who
have satisfactorily performed twenty (20) hours of work for each weekly issuance
of shares.  The share certificates shall be issued within seven (7) days of each
four (4) week period of services performed.

         7.       Reemployment of Independent Contractors.




                                       16

<PAGE>



         7.1 At such  time as  Synaptix  and the  Team  Members  determine  that
Synaptix is in a sufficiently  sound financial  position,  Synaptix may offer to
re-employ the Team Members as full-time  employees of the company on terms to be
mutually agreed to between Synaptix and the individual Team Member. In the event
of such  reemployment,  in addition to their  salary each such  reemployed  Team
Member  will  receive  a  signing  bonus of fifty  thousand  (50,000)  shares of
unregistered  Synaptix stock,  bearing a restrictive  legend and subject to Rule
144  under  the  Securities  Act of  1933.  This  stock  will be  issued  to the
reemployed  Team  Member no later  than two (2)  weeks  after  date of hire.  In
addition,  the  reemployed  Team  Member  shall be eligible  to  participate  in
Synaptix  employee  stock  purchase  plan.  The effective  date of hire for this
document will be  retroactive  to the date that the employee  accepted the first
employment  offer ever  received  and the  Company  will  bridge the  employee's
service commencing with the original date of employment.

         8.       No Employment Offer.

         8.1 Paragraph 7.1  notwithstanding,  in the event that Synaptix  elects
not to offer  re-employment  to a Team  Member  after  completion  of the  Eagle
project,  Synaptix Systems Corporation will issue to such Team Member a total of
twenty five  thousand  (25,000)  unregistered  shares of Synaptix  common  stock
bearing a  restrictive  legend and subject to Rule 144. The stock will be issued
to said Team  Member not later than two weeks after the  completion  date of the
Eagle  project.  The purpose of these  twenty five  thousand  shares of Rule 144
stock is incentive  compensation  for  completing  the software  package with or
without the possibility of future employment.  This is the only option available
for such Team Member,  and is only  applicable  if Synaptix  elects not to offer
employment  to such Team Member who has signed and agreed to the  provisions  of
this Agreement.

         9.       Trade Secrets and Inventions; Inside Information.

         9.1 Each Team Member will treat as  proprietary  and  confidential  any
information  belonging to Synaptix or any third  parties  disclosed to such Team
Member in the course of such Team Member's  services.  Such Team Member  assigns
and agrees to assign to Synaptix or Synaptix's  nominee all rights in inventions
or other proprietary  information  conceived by such Team Member during the term
of this Agreement with respect to any work that such Team Member  performs under
this  Agreement,  including,  but not  limited  to,  any  computer  programs  or
programming.



         9.2 In the course of the performance of each Team Member's  duties,  it
is expected  that each Team Member will receive  information  that is considered
material  inside  information  within  the  meaning  and  intent of the  federal
securities laws, rules, and regulations.  Each Team Member expressly agrees that
he or she will not disclose this information directly or indirectly to any other
person,  nor use this  information  as a basis for  advice  to any other  person
concerning any decision to buy, sell, or otherwise deal in Synaptix' securities.

         10.      Miscellaneous.

                  10.1  Attorneys'  Fees. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute,  breach,  default or misrepresentation in connection with
any of the provisions of this Agreement, the successful or



                                       17

<PAGE>



prevailing party or parties shall be entitled to recover  reasonable  attorneys'
fees and other costs incurred in that action or  proceeding,  in addition to any
other relief to which it or they may be entitled.

                  10.2 Authority. Each person signing this document on behalf of
a party hereto warrants that he has been duly authorized by such party to do so.

                  10.3     Legal Counsel.  Each party hereto hereby acknowledges
the receipt of advice of legal counsel prior to the execution hereof.

                  10.4  Counterparts.  This  Agreement  may be  executed  in any
number of  counterparts,  each of which shall be deemed an original,  but all of
which shall together  constitute a single  agreement,  and this agreement  shall
become  effective  upon the  execution  of a  counterpart  hereof by each of the
parties hereto.

                  10.5  Notices.  All  notices  of  communication   required  or
permitted  hereunder  must be in  writing  and will be  deemed to have been duly
given if delivered  personally,  mailed by United States certified or registered
mail, postage prepaid, return receipt requested, mailed by overnight courier, or
sent by facsimile transmission (provided that any such facsimile transmission is
promptly  confirmed by delivering or mailing the original executed notice by one
of the other  methods  provided for in this  Subsection),  to the parties at the
following addresses:

                  (a)      If to Synaptix, addressed to:

                           Synaptix Systems Corporation
                           2450 South Shore Blvd., Suite 210
                           League City, Texas 77573
                           Attn:  Edward S. Fleming, President
                           Facsimile No.:  (281) 334-0307

                  (b)      If to Team member, addressed to:

                           -------------------------------------

                           -------------------------------------

                           -------------------------------------

                           Facsimile No.:_______________________

Any  such  notice  or  communication  that  is  addressed  as  provided  in this
Subsection will be deemed given (a) upon delivery, if delivered personally,  (b)
on the third  business day after  deposit in a regular  depository of the United
States mail, if delivered by United States mail, (c) the day of transmission, if
delivered by facsimile  transmission,  provided  that  confirmation  is promptly
sent,  unless  such  transmission  is sent after  3:00  p.m.,  local time of the
receiving party, or on a day which is not a business day of the receiving party,
in which case such  transmission  will be deemed given on the first business day
after the transmission, and (d) on the first business day of the receiving party



                                       18

<PAGE>



after the delivery to the courier, if delivered by overnight courier.  Any party
from time to time may change its address for the  purpose of this  provision  by
furnishing a notice in accordance with this Subsection,  but no such notice will
be deemed to have been given until it is actually  received by the party  sought
to be charged with the contents thereof.

                  10.6  Governing  Law.  This  Agreement  shall be  construed in
accordance with the laws of the State of Texas, without regard to the principles
of  conflicts  of law embodied  therein  that might refer  construction  of such
provisions to the laws of another jurisdiction.

                  10.7  Captions.   The  captions  in  this  Agreement  are  for
convenience  of reference  only, and shall not be considered a part hereof or be
given any effect in the construction or interpretation of this Agreement.

                  10.8  Severability.  If any  provision  of this  Agreement  is
invalid, illegal or unenforceable, the balance of this Agreement shall remain in
full force and effect and this  Agreement  shall be construed in all respects as
if such invalid, illegal or unenforceable provision were omitted.




                                       19

<PAGE>



         IN WITNESS  WHEREOF,  the parties have executed  this  Agreement on the
date first set forth above.


Synaptix:

SYNAPTIX SYSTEMS CORPORATION


By:___________________________
      Edward S. Fleming, President


Team Members:


------------------------------            ----------------------------
BOB TUCKER                                         LESLIE VARGAS


------------------------------            ----------------------------
FELIX BALDERAS                                     DARYL ALLISON


------------------------------            ----------------------------
DIANE CAMPBELL                                     MIKE BURDEOS


------------------------------            ----------------------------
CRAIG HAMILTON                                     GREG GLOVER





Attachments:

Exhibit A -- Compensation Schedule
Exhibit B -- Release Agreement






                                       20

<PAGE>

                           DEVELOPMENT TEAM AGREEMENT
                                    EXHIBIT A


<TABLE>
<CAPTION>
                                                                                              $1 for $1
          Employee                                  Payroll Owed                           Stock Certificate
------------------------       ---------------------------------------------------        -------------------
<S>                            <C>                                                        <C> 
Felix Balderas                 Last day Dec. 19th.  Due last week worked                         1076
                               less vacation hours that were taken in advance
                               of accruing them.
Diane Campbell                 Last day Jan. 16th.  Due contractual agreement                    5884
                               of one month.
Greg Glover                    Last day Jan. 2nd.  Due contractual agreement                     2900
                               of three weeks pay.  Received $850 cash towards
                               that amount.
Mark Orr                       Last day Jan 16th.  Due contractual agreement of                  4716
                               five weeks pay.  Received $1,000 cash towards
                               that amount.
Daryl Allison                  Last day Jan. 26th.  Due contractual agreement                    6990
                               of six weeks.  Received $1,000 cash towards
                               that amount.
Craig Hamilton                 Last day worked Feb. 6th.  Due contractual                        8721
                               agreement of eight weeks.  Received $1,000
                               towards that amount.
Mike Burdeos                   Last day worked Jan. 26th.  Due contractual                       8438
                               agreement of six weeks.  Received $1,000
                               towards that amount.
Bob Tucker                     Last day worked Jan. 26th.  Due contractual                       9731
                               agreement of six weeks.
Leslie Vargas                  Still employed by Synaptix Systems Corporation.                   3669
                               Due contractual agreement of one month in back
                               pay.  Received $1,000 towards that amount.
Total Owed                                                                                     52,125
</TABLE>





                                       21

<PAGE>



                                                                  Exhibit 10(b)
                        SETTLEMENT AGREEMENT AND RELEASE
                                    EXHIBIT B

         This Release  Agreement (this  "Agreement") is made and entered into as
of the ____ day of  ________________,  1998,  by and  between  SYNAPTIX  SYSTEMS
CORPORATION,       a      Colorado       corporation       ("Synaptix")      and
_____________________________, an individual ("Employee").

                                    RECITALS

         A.       Synaptix is a company engaged in the business of developing 
and marketing computer programs.  Employee is an employee of Synaptix.

         B. The  parties  to this  Agreement  intend  and  desire to effect  and
accomplish a full and final settlement of the claims and issues existing between
them arising out of the termination of Employee's employment by Synaptix.

         C. The  parties to this  Agreement  now desire to enter into a full and
complete  settlement  of all  disputes by  providing  certain  payments,  taking
certain  actions  and  entering  into  certain  covenants  as set forth below to
completely discharge any and all claims and potential claims between them.

                                    AGREEMENT

         NOW THEREFORE, it is agreed by and between the parties as follows:

         1.       Resignation of Employee.  Employee hereby resigns as an 
employee of Synaptix, effective as of _________________, 1998.

         2. Development Team Agreement. Synaptix and Employee shall enter into a
development  team  agreement  (the  "Development  Team  Agreement")  in the form
attached hereto as Exhibit A and incorporated herein by this reference.

         3.  Representations  and  Warranties  of  Parties.  Each  party  hereby
represents and warrants to each other party as follows:

                  3.1 He, she, or it has not transferred,  assigned or otherwise
subrogated  or  conveyed  any of his,  her or its  interest in any of the claims
which are the  subject  matter of this  Agreement  to any person or entity not a
party to this Agreement;

                  3.2  He,  she  or it  has  obtained  all  such  approvals  and
authorizations  as are necessary or appropriate  to the execution,  delivery and
performance  of this  Agreement by it,  including the consents of  shareholders,
directors, partners or joint venturers, where applicable, and this Agreement has
been validly  executed  and  delivered by him, her or it and is binding upon and
enforceable against him, her or it in accordance with its terms; and

                  3.3 Except for the  parties to this  Agreement,  he, she or it
has no knowledge that any other person or entity has any right or interest in or
to the subject matter of this Agreement.




                                       22

<PAGE>



                  3.4 Each party to this Agreement hereby  indemnifies and holds
the other party harmless from and against any liability,  loss, claims, demands,
damages, costs or expenses incurred, or attorneys' fees paid, by the other party
as a result of the incorrectness of any of their respective  representations and
warranties contained in paragraphs 6.1 through 6.3, inclusive, of this Section.

         4. Covenants and Releases.  For valuable consideration as recited above
and the receipt of which is hereby  acknowledged,  the parties to this Agreement
covenant and promise as follows:

                  4.1      Definitions.

                           (a) For purposes of this section, the term "party" or
"parties" shall mean:

                  (i)      on the one hand, Employee, together with his 
                           respective agents, heirs,
                           successors, personal representatives and assigns; and

                  (ii)     on  the  other  hand,  Synaptix,  together  with  its
                           respective  past and  present  officers  (other  than
                           Employee),  directors,  agents, employees,  servants,
                           successors and assigns.

                           (b)      The use of the term "party" or "parties" 
herein shall be inclusive, and usage of the  singular  shall in every  case  
also  incorporate  the  collective meaning set forth above.

                  4.2  Mutual  Releases.  Except  for  the  performance  of  the
undertakings  set forth herein and in the  Development  Team Agreement  attached
hereto as  Exhibit A, each  party to this  Agreement  does  hereby  release  and
forever  discharge each other party from any and all claims,  demands,  damages,
actions,  causes of action,  defenses and  liabilities,  of any kind whatsoever,
whether  in  law or in  equity,  whether  contractual,  common  law,  statutory,
federal,  state or  otherwise,  whether known or unknown,  whether  suspected to
exist or not,  which the parties now have, had or hereafter may have or claim to
have, by reason of any acts,  omissions,  transactions,  or occurrences prior to
the date hereof arising out of Employee's employment by Synaptix and his actions
as an officer and director of the company.

                  4.3 General  Release.  Each of the parties to this release may
have claims by reason of acts,  omissions,  transactions or occurrences prior to
the date hereof against the other party, of which, at the time this agreement is
executed,  the  releasing  party has no knowledge or  suspicion.  Except for the
performance  of  the  undertakings   expressly  set  forth  herein  and  in  the
Development  Team  Agreement,  each party hereby agrees and represents that this
Agreement  is  specifically  intended  to, and does,  extend to any and all such
claims  that are  based  upon or arise  out of the  employment  of  Employee  by
Synaptix and his actions as an officer and  director of the company,  whether or
not known, claimed, or suspected by such party and, therefore, each party hereby
expressly  waives any statutory  protection  with respect to the limited  claims
described in this sentence  against unknown claim,  regardless of whether or not
knowledge  of such  unknown  claims may have  materially  affected  such party's
decision.

                  4.4 No Admission of Liability.  The parties to this Agreement,
and  each  of  them,  agree  and  acknowledge  that  nothing  contained  in this
Agreement,  nor the settlement  which led to it, is intended to be, nor shall it
be deemed, construed or treated in any respect as, an admission of liability.




                                       23

<PAGE>



                  4.5 Scope of  Release.  This  Agreement  shall apply to and be
binding upon the respective officers,  directors,  agents, employees,  servants,
successors,  attorneys,  heirs  and  assigns,  if  any,  of each  party  to this
Agreement.

         5.       Miscellaneous.

                  5.1 Attorneys' Fees. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute,  breach, default or misrepresentation in connection with any
of the  provisions of this  Agreement,  the  successful  or prevailing  party or
parties shall be entitled to recover reasonable  attorneys' fees and other costs
incurred in that action or proceeding,  in addition to any other relief to which
it or they may be entitled.

                  5.2 Authority.  Each person signing this document on behalf of
a party hereto warrants that he has been duly authorized by such party to do so.

                  5.3      Legal Counsel.  Each party hereto hereby acknowledges
 the receipt of advice of legal counsel prior to the execution hereof.

                  5.4 Counterparts. This Agreement may be executed in any number
of  counterparts,  each of which shall be deemed an  original,  but all of which
shall together  constitute a single  agreement,  and this agreement shall become
effective  upon the  execution  of a  counterpart  hereof by each of the parties
hereto.

                  5.5  Continuing  Obligations.  None of the releases  contained
herein  shall be  construed  to release  any party from any  obligation  arising
hereunder or under the Development Team Agreement.

                  5.6  Confidentiality.  The parties  agree that they shall each
keep the terms of this Settlement Agreement confidential, and shall not disclose
the  same to any  third  party  except  as may be  required  by law or  judicial
process.

                  5.7 Fees and  Expenses.  Each party will pay their  respective
fees, expenses and disbursements  incurred in connection with the subject matter
of this Agreement and any amendments thereto.

                  5.8  Notices.   All  notices  of  communication   required  or
permitted  hereunder  must be in  writing  and will be  deemed to have been duly
given if delivered  personally,  mailed by United States certified or registered
mail, postage prepaid, return receipt requested, mailed by overnight courier, or
sent by facsimile transmission (provided that any such facsimile transmission is
promptly  confirmed by delivering or mailing the original executed notice by one
of the other  methods  provided for in this  Subsection),  to the parties at the
following addresses:





                                       24

<PAGE>



                  (a)      If to Synaptix, addressed to:

                           Synaptix Systems Corporation
                           2450 South Shore Blvd., Suite 210
                           League City, Texas 77573
                           Attn:  Edward S. Fleming, President
                           Facsimile No.:  (281) 334-0307

                  (b)      If to Employee, addressed to:

                           -------------------------------------

                           -------------------------------------

                           -------------------------------------

                           Facsimile No.:_______________________

Any  such  notice  or  communication  that  is  addressed  as  provided  in this
Subsection will be deemed given (a) upon delivery, if delivered personally,  (b)
on the third  business day after  deposit in a regular  depository of the United
States mail, if delivered by United States mail, (c) on the day of transmission,
if delivered by facsimile  transmission,  provided that confirmation is promptly
sent,  unless  such  transmission  is sent after  3:00  p.m.,  local time of the
receiving party, or on a day which is not a business day of the receiving party,
in which case such  transmission  will be deemed given on the first business day
after the transmission, and (d) on the first business day of the receiving party
after the delivery to the courier, if delivered by overnight courier.  Any party
from time to time may change its address for the  purpose of this  provision  by
furnishing a notice in accordance with this Subsection,  but no such notice will
be deemed to have been given until it is actually  received by the party  sought
to be charged with the contents thereof.

                  5.9  Governing  Law.  This  Agreement  shall be  construed  in
accordance with the laws of the State of Texas, without regard to the principles
of  conflicts  of law embodied  therein  that might refer  construction  of such
provisions to the laws of another jurisdiction.

                  5.10  Captions.   The  captions  in  this  Agreement  are  for
convenience  of reference  only, and shall not be considered a part hereof or be
given any effect in the construction or interpretation of this Agreement.
                  5.11  Severability.  If any  provision  of this  Agreement  is
invalid, illegal or unenforceable, the balance of this Agreement shall remain in
full force and effect and this  Agreement  shall be construed in all respects as
if such invalid, illegal or unenforceable provision were omitted.

                  5.12 Entire  Agreement.  This  Agreement  contains  the entire
understanding of the parties and supersedes any prior written or oral agreements
or  understandings  between them  concerning the subject matter set forth above.
There  are no  representations,  warranties,  covenants,  promises,  agreements,
arrangements, or understandings, oral or written, express or implied between the
parties  hereto  relating to the  subject  matter set forth above which have not
been fully expressed  herein.  The terms and provisions of this Agreement may be
altered,  amended or modified only by a written instrument executed by the party
sought to be bound by such alteration, amendment or modification.



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<PAGE>




                  5.13 Binding  Effect.  This Agreement shall be binding on, and
shall inure to the benefit  of, the  parties to it and their  respective  heirs,
legal  representatives,  successors,  and  assigns.  No party shall  transfer or
assign any rights or obligations  hereunder without the prior written consent of
the other party thereto.

         IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
and Release on the date first set forth above.

"Synaptix:"                                   "Employee:"

SYNAPTIX SYSTEMS CORPORATION


                                             _____________________________
By:___________________________
   Edward S. Fleming, President                           (Print Name)




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<PAGE>

                                                                    Exhibit 17
                                  MARK F. WALZ
                               1127 GLOURIE DRIVE
                              HOUSTON, TEXAS 77055



February 3, 1998



Mr. Matthew Hutchins
Chairman of the Board
Synaptix Systems Corporation
1900 Preston Road, Suite 267
Plano, Texas 75093

Mr. Daniel A. Gillett
Director and Chief Executive Officer
Synaptix Systems Corporation
1900 Preston Road, Suite 267
Plano, Texas 75093

Colonel Edward S. Fleming
Director and Acting President
Synaptix Systems Corporation
2450 South Shore Boulevard, Suite 210
League City, Texas 77573

VIA CERTIFIED MAIL

Dear Gentlemen:

As you may know,  I have  assumed a new  position  and  consequently,  effective
immediately,  I am no longer able to devote the time  necessary to function as a
board member of Synaptix.  I trust that each of you will fulfill your  fiduciary
duties to the  shareholders  of  Synaptix,  including  filing  of Form  8-K,  if
necessary,  reflecting my resignation  from the Board. I wish each you continued
success.

Sincerely,

/s/ Mark F. Walz
Mark F. Walz




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