<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
 
<TABLE>
<S>        <C>
/X/        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                  SECURITIES EXCHANGE ACT OF 1934
 
                     FOR THE FISCAL QUARTER ENDED MARCH 31, 1998, OR
 
/ /        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                  SECURITIES EXCHANGE ACT OF 1934
</TABLE>
 
            FOR THE TRANSITION PERIOD FROM           TO           .
                         COMMISSION FILE NUMBER 0-26952
 
                            ------------------------
 
                              SYNC RESEARCH, INC.
 
             (Exact name of Registrant as specified in its charter)
 
           DELAWARE                             33-0676350
 (State or other jurisdiction                (I.R.S. Employer
              of                           Identification No.)
incorporation or organization)
 
                                   40 PARKER
                                IRVINE, CA 92618
                    (Address of principal executive offices)
       registrant's telephone number, including area code: (949) 588-2070
 
                            ------------------------
 
    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (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 ___
 
    As of April 30, 1998, 17,363,631 shares of the Registrant's Common Stock
were issued and outstanding.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                              SYNC RESEARCH, INC.
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                             ---------
<S>          <C>                                                                                             <C>
Part I.      Financial Information.........................................................................          3
 
  Item 1     a)  Condensed consolidated balance sheets at March 31, 1998 (unaudited) and December 31,
                 1997......................................................................................          3
 
             b)  Condensed consolidated statements of operations (unaudited) for the three months ended
                 March 31, 1998 and March 31, 1997.........................................................          4
 
             c)  Condensed consolidated statements of cash flows (unaudited) for the three months ended
                 March 31, 1998 and March 31, 1997.........................................................          5
 
             d)  Notes to condensed consolidated financial statements......................................          6
 
  Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.........          9
 
Part II.     Other Information.............................................................................         19
 
  Item 1.    Legal Proceedings.............................................................................         19
 
  Item 2.    Changes in Securities and Use of Proceeds.....................................................         19
 
  Item 3.    Defaults upon Senior Securities...............................................................         20
 
  Item 4.    Submission of Matters to a Vote of Security Holders...........................................         20
 
  Item 5.    Other Information.............................................................................         20
 
  Item 6.    Exhibits and Reports on Form 8-K..............................................................         20
</TABLE>
 
                                       2
<PAGE>
PART I.  FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
                                SYNC RESEARCH, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                               MARCH 31,    DECEMBER 31,
                                                                 1998           1997
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
Current assets:
  Cash and cash equivalents.................................   $ 19,469       $ 21,734
  Accounts and other receivables, net.......................      4,854          4,657
  Inventories...............................................      7,256          7,371
  Prepaid expenses and other current assets.................        891            522
                                                              -----------   ------------
Total current assets........................................     32,470         34,284
Furniture, fixtures and equipment, net......................      4,120          4,167
Other assets................................................         47             44
                                                              -----------   ------------
Total assets................................................   $ 36,637       $ 38,495
                                                              -----------   ------------
                                                              -----------   ------------
 
                          LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
  Accounts payable and accrued liabilities..................   $  3,006       $  2,688
  Accrued compensation and related costs....................        788            949
  Severance and related liabilities.........................        161            372
  Deferred revenue..........................................      1,357          1,507
  Bank borrowings and current maturities of capitalized
    lease obligations.......................................      1,551             50
                                                              -----------   ------------
Total current liabilities...................................      6,863          5,566
Capitalized lease obligations, less current maturities......         92            111
Stockholders' equity:
  Common stock, $.001 par value:
    Authorized shares--50,000
    Issued and outstanding shares--17,364 at March 31, 1998
    and 17,288 at December 31, 1997.........................         17             17
  Additional paid-in capital................................     71,866         71,786
  Deferred compensation.....................................        (27)           (34)
  Accumulated deficit.......................................    (42,174)       (38,951)
                                                              -----------   ------------
Total stockholders' equity..................................     29,682         32,818
                                                              -----------   ------------
Total liabilities and stockholders' equity..................   $ 36,637       $ 38,495
                                                              -----------   ------------
                                                              -----------   ------------
</TABLE>
 
                            See accompanying notes.
 
                                       3
<PAGE>
                              SYNC RESEARCH, INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                  (UNAUDITED)
 
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                                                               THREE MONTHS ENDED
                                                                                                   MARCH 31,
                                                                                              --------------------
                                                                                                1998       1997
                                                                                              ---------  ---------
<S>                                                                                           <C>        <C>
Net revenues................................................................................  $   5,610  $   5,082
Cost of sales...............................................................................      3,871      3,469
                                                                                              ---------  ---------
  Gross profit..............................................................................      1,739      1,613
Operating expenses:
  Research and development..................................................................      1,741      2,198
  Selling and marketing.....................................................................      2,832      4,234
  General and administrative................................................................        642      1,297
  Severance and facility rationalization cost...............................................         --        506
                                                                                              ---------  ---------
  Total operating expenses..................................................................      5,215      8,235
                                                                                              ---------  ---------
Operating loss..............................................................................     (3,476)    (6,622)
Interest income, net........................................................................        255        443
                                                                                              ---------  ---------
Loss before income taxes....................................................................     (3,221)    (6,179)
Provision for income taxes..................................................................          2         --
                                                                                              ---------  ---------
Net loss....................................................................................  $  (3,223) $  (6,179)
                                                                                              ---------  ---------
                                                                                              ---------  ---------
Basic and diluted net loss per share........................................................  $   (0.19) $   (0.36)
                                                                                              ---------  ---------
                                                                                              ---------  ---------
Shares used in computing net loss per share.................................................     17,336     16,983
                                                                                              ---------  ---------
                                                                                              ---------  ---------
</TABLE>
 
                            See accompanying notes.
 
                                       4
<PAGE>
                              SYNC RESEARCH, INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                                  (UNAUDITED)
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                               THREE MONTHS ENDED
                                                                                                   MARCH 31,
                                                                                              --------------------
                                                                                                1998       1997
                                                                                              ---------  ---------
<S>                                                                                           <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................................................  $  (3,223) $  (6,179)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization...........................................................        461        405
    Provision for losses on accounts receivable.............................................        104        115
    Deferred compensation expense...........................................................          7         35
  Changes in operating assets and liabilities, net:
    Accounts and other receivables..........................................................       (301)     2,501
    Inventories.............................................................................        115        (28)
    Prepaid expenses and other current assets...............................................       (369)      (318)
    Accounts payable and other accrued liabilities..........................................        264     (1,159)
    Accrued compensation and related costs..................................................       (161)       568
    Accrued severance and restructuring.....................................................       (212)        --
    Deferred revenue........................................................................        (98)      (212)
                                                                                              ---------  ---------
Net cash used in operating activities.......................................................     (3,413)    (4,272)
CASH FLOWS FROM INVESTING ACTIVITIES
  Investments in marketable securities, net.................................................         --     (3,935)
  Purchases of furniture, fixtures and equipment, net.......................................       (414)      (820)
                                                                                              ---------  ---------
Net cash used in investing activities.......................................................       (414)    (4,755)
CASH FLOWS FROM FINANCING ACTIVITIES
  Net bank borrowings (payments)............................................................      1,500       (802)
  Payments on capitalized lease obligations.................................................        (18)       (22)
  Proceeds from common stock options exercised and employee stock purchase plan.............         80        253
                                                                                              ---------  ---------
Net cash provided by (used in) financing activities.........................................      1,562       (571)
                                                                                              ---------  ---------
Net decrease in cash and cash equivalents...................................................     (2,265)    (9,598)
Cash and cash equivalents at beginning of period............................................     21,734     35,874
                                                                                              ---------  ---------
Cash and cash equivalents at end of period..................................................  $  19,469  $  26,276
                                                                                              ---------  ---------
                                                                                              ---------  ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Interest paid.............................................................................  $      11  $      11
                                                                                              ---------  ---------
                                                                                              ---------  ---------
  Income taxes paid.........................................................................  $      21  $       1
                                                                                              ---------  ---------
                                                                                              ---------  ---------
</TABLE>
 
                            See accompanying notes.
 
                                       5
<PAGE>
                              SYNC RESEARCH, INC.
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
                                  (UNAUDITED)
 
ITEM 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
1.  BASIS OF PRESENTATION
 
    The condensed consolidated balance sheet as of March 31, 1998, the condensed
consolidated statements of operations for the three months ended March 31, 1998
and 1997 and the condensed consolidated statements of cash flows for the three
months ended March 31, 1998 and 1997 have been prepared without audit. In the
opinion of management, the unaudited financial statements include all
adjustments (consisting of normal recurring adjustments) necessary to present
fairly the Company's financial position at March 31, 1998, the results of its
operations for the three months ended March 31, 1998 and 1997 and its cash flows
for the three months ended March 31, 1998 and 1997. The condensed financial
statements should be read in conjunction with the audited financial statements
of Sync Research, Inc. and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997. The results of operations for
the three months ended March 31, 1998 are not necessarily indicative of the
operating results to be expected for the full year.
 
    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the accompanying financial
statements. Actual results could differ from those estimates.
 
    Certain prior period amounts have been reclassified to conform with the
current period presentation.
 
2.  CASH AND CASH EQUIVALENTS
 
    The Company invests its excess cash in money market funds and short-term
debt instruments of U.S. corporations with strong credit ratings. The Company
has established guidelines with respect to the diversification and maturities
that maintain safety and liquidity. The Company considers all highly liquid
investments with an original maturity of three months or less and money market
funds to be cash equivalents.
 
3.  FURNITURE, FIXTURES AND EQUIPMENT
 
    Furniture, fixtures and equipment are recorded at cost and consist of the
following (in thousands):
 
<TABLE>
<CAPTION>
                                                                       MARCH 31,   DECEMBER 31,
                                                                         1998          1997
                                                                      -----------  ------------
<S>                                                                   <C>          <C>
Equipment acquired under capital leases.............................   $     275    $      275
Furniture and fixtures..............................................         818           795
Computer equipment and software.....................................       6,698         6,326
Leasehold improvements..............................................       1,103         1,084
                                                                      -----------  ------------
                                                                           8,894         8,480
Accumulated depreciation and amortization...........................      (4,774)       (4,313)
                                                                      -----------  ------------
                                                                       $   4,120    $    4,167
                                                                      -----------  ------------
                                                                      -----------  ------------
</TABLE>
 
                                       6
<PAGE>
                              SYNC RESEARCH, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
4.  INVENTORIES
 
    Inventories consist primarily of computer hardware and components and are
stated at the lower of cost (first-in, first-out) or market, as follows (in
thousands):
 
<TABLE>
<CAPTION>
                                                                       MARCH 31,   DECEMBER 31,
                                                                         1998          1997
                                                                      -----------  -------------
<S>                                                                   <C>          <C>
Raw materials.......................................................   $   3,381     $   3,636
Work in process.....................................................         888           862
Finished goods......................................................       2,987         2,873
                                                                      -----------       ------
                                                                       $   7,256     $   7,371
                                                                      -----------       ------
                                                                      -----------       ------
</TABLE>
 
5.  PER SHARE INFORMATION
 
    In 1997, the Financial Accounting Standards Board issued Statement No. 128,
Earnings per Share. Statement No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. All earnings per share amounts for all periods have been
presented to conform with Statement No. 128.
 
    Net loss per common share is computed using the weighted average number of
common shares and common share equivalents outstanding during the periods
presented. Common share equivalents result from the dilutive effect, if any, of
outstanding options and warrants to purchase common stock.
 
6.  CREDIT AGREEMENT
 
    Under the Company's unsecured credit agreement with a bank, the Company may
borrow an amount not to exceed $5,000,000 at the Bank's prime rate (8.5% at
March 31, 1998). The agreement expires on October 5, 1998. There was $1.5
million outstanding under this agreement as of March 31, 1998.
 
7.  IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
 
    In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME
(Statement No. 130), which is effective for years beginning after December 15,
1997. Statement No. 130 establishes standards for reporting and displaying
comprehensive income and its components with the same prominence as other
financial statement information. The implementation of this statement did not
have a significant effect on the Company's reported results of operations or
financial position.
 
    In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION (Statement No. 131), which is effective for
years beginning after December 15, 1997. Statement No. 131 establishes standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports. It also establishes standards for related disclosures about products
and services, geographic areas, and major customers.
 
                                       7
<PAGE>
                              SYNC RESEARCH, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
7.  IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS (CONTINUED)
 
    The Company operates in one business segment. Accordingly, the adoption of
this statement did not have a significant effect on the Company's financial
statements.
 
8.  LITIGATION
 
    On November 5, 1997, an action entitled Dalarne Partners, Ltd. v. Sync
Research, Inc., et al., No SACV97-877 AHS(Eex) was filed against the Company and
certain of its directors and officers. The action was filed in the U.S. District
Court for the Central District of California, Southern Division. The action
purports to be a class action lawsuit brought on behalf of purchasers of the
Company's common stock during the period from November 18, 1996 through March
20, 1997. The complaint asserts claims for violation of the Securities Exchange
Act of 1934. The complaint seeks to recover damages in an unspecified amount. No
trial date or other deadline has been established. The Company intends to defend
this lawsuit vigorously.
 
                                       8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
    The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in Part
I--Item 1 of this Quarterly Report. In addition, except for the historical
statements contained herein, the following discussion contains forward-looking
statements. The Company wishes to alert readers that the factors set forth in
the Company's Annual Report on Form 10-K for the year ended December 31, 1997,
and in the section of this Item 2 titled "Risk Factors," as well as other
factors that could in the future affect, and in the past have affected, the
Company's results. The Company's actual results for future periods could differ
materially from those expressed in any forward-looking statements made by or on
behalf of the Company. Readers are cautioned not to place undue reliance on
these forward-looking statements which reflect management's analysis only as of
the date hereof. The Company assumes no obligation to update these
forward-looking statements to reflect actual results or changes in factors or
assumptions affecting such forward-looking statements.
 
OVERVIEW
 
    Sync commenced operations in 1981 and funded operations through 1988 with
revenue from communications software consulting and custom product development
for equipment vendors and large end-users. The Company shipped its first
commercial WAN product in 1989. In 1991, Sync released its first Conversion Node
and frame relay access products. The Company has historically emphasized the
identification of potential channel partners, educating potential and existing
channel partners and other resellers and supporting sales efforts of these
resellers in connection with the Company's direct sales efforts. The Company
currently maintains OEM, marketing and sales arrangements with communications
and networking companies such as IBM and 3Com, as well as carriers such as
Sprint, MCI, Ameritech, Intermedia Communications and PacBell, and systems
integrators such as Electronic Data Systems and Diebold.
 
    In March 1997, the Company implemented expense reduction initiatives with
the goal of enabling the Company to achieve profitability at lower revenue
levels. Additional cost reduction programs were initiated in September 1997.
There can be no assurance that Sync's products will achieve significant market
penetration, either through its channel partners and other resellers or its
direct sales force, or that the Company will successfully introduce new and
enhanced products or compete effectively in its market, or that its efforts to
implement expense reductions will enable it to become profitable at lower
revenue levels, if at all.
 
RESULTS OF OPERATIONS
 
    NET REVENUES
 
    The Company derives its revenues primarily from sales of advanced wide-area
networking products. Product revenues are recognized upon shipment and the
Company generally does not have any significant remaining obligations upon
shipment of its products. Product returns and sales allowances are provided for
at the date of sale. Service revenues from customer maintenance fees for ongoing
customer support and product updates are recognized ratably over the term of the
maintenance period, which is typically 12 months.
 
    Net revenues for the first quarter of 1998 were $5.6 million, compared to
net revenues of $5.1 million for the quarter ended March 31, 1997. The increase
in net revenues in the first quarter of 1998 compared to the first quarter of
1997 was due primarily to increased sales of frame relay access products and
higher service revenues, partially offset by a reduction in sales of
transmission products.
 
                                       9
<PAGE>
    Net revenues by product group for the three months ended March 31, 1998 and
1997 were as follows ($ in thousands):
 
<TABLE>
<CAPTION>
                                                             1998             %    1997             %
                                                           ---------        ---  ---------        ---
<S>                                                        <C>        <C>        <C>        <C>
Frame relay access products..............................  $   2,916         52% $   1,600         31%
Circuit management products..............................        752         13        939         19
Transmission products....................................        617         11      1,260         25
Other....................................................      1,325         24      1,283         25
                                                           ---------        ---  ---------        ---
                                                           $   5,610        100% $   5,082        100%
                                                           ---------        ---  ---------        ---
                                                           ---------        ---  ---------        ---
</TABLE>
 
    The increase in revenues from sales of frame relay access products was due
primarily to continued acceptance of the Company's 3600 frame relay access
device product line that was released in the first quarter of 1997. The decline
in revenues from sales of transmission products was due primarily to continued
uncertainties created as a result of the recent Asian currency crisis and the
increase in other revenue was due primarily to increased maintenance and
installation revenue, partially offset by lower sales of the Company's older
products.
 
    The percentage of net revenues represented by sales through channel partners
and other resellers declined to 65.4% in 1998 from 80.7% in 1997. The Company
expects that average selling prices may continue to decline and that sales
through channel partners and other resellers will continue to account for a
majority of net revenues; however, the mix of sales to channel partners and
other resellers may change from period to period.
 
    International sales represented approximately 6.5% of the Company's total
sales during the three months ended March 31, 1998 as compared to 19.1% during
the three months ended March 31, 1997. The decline was due to continued
sluggishness in the Company's sales to the Pacific Rim as a result of the
current Asian currency crisis. The near-term outlook on the Company's sales to
the Pacific Rim remains uncertain.
 
    GROSS PROFIT
 
    Cost of sales primarily consists of purchased materials used in the assembly
of the Company's products, fees paid to third party subcontractors for
installation and maintenance services, and compensation paid to employees in the
Company's manufacturing and service organizations.
 
    Gross profit increased to $1.7 million for the three months ended March 31,
1998 from $1.6 million in the corresponding prior year period. Gross profit as a
percentage of net revenues decreased to 31.0% for the three months ended March
31, 1998, as compared to 31.7% for the three months ended March 31, 1997. The
decrease in margin in the first quarter of 1998 as compared to the first quarter
of 1997 was due primarily to increased expenditures to support service
activities, increased sales to IBM at higher discounts than encountered in other
channels and lower average selling prices.
 
    OPERATING EXPENSES
 
    Research and development expenses primarily consist of compensation paid to
personnel, including consultants, engaged in research and development, amounts
paid for outside development services and costs of materials utilized in the
development of hardware products, including prototype units and the depreciation
and amortization of equipment and tools utilized in the development process. It
is the Company's policy to expense all research and development costs as
incurred and to capitalize certain software development costs subsequent to the
establishment of technological feasibility. To date, no significant costs have
been capitalized. Research and development expenses decreased to $1.7 million
for the first quarter of 1998, as compared to $2.2 million for the first quarter
of the prior year. The decrease in expenses in the first quarter of 1998 was
primarily due to the Company's 1997 cost reduction programs.
 
                                       10
<PAGE>
    Selling and marketing expenses consist primarily of base and incentive
compensation paid to sales and marketing personnel, travel and related expenses,
and costs associated with promotional and trade show activities. Selling and
marketing expenses decreased to $2.8 million for the quarter ended March 31,
1998, as compared to $4.2 million in the quarter ended March 31, 1997. The
decrease in expenses resulted primarily from sales and marketing headcount
reductions as part of the Company's 1997 cost reduction programs.
 
    General and administrative expenses consist primarily of compensation paid
to administrative personnel, payments to consultants, professional services and
costs related to public company activities. General and administrative
expenditures decreased to $642,000 for the three months ended March 31, 1998, as
compared to $1.3 million for the three months ended March 31, 1997. The expenses
were lower in the 1998 period because of the Company's cost reduction programs
in 1997.
 
    Severance and facility rationalization costs include expenses related to the
reduction in employees and the elimination or reduction of certain lease
obligations undertaken at the end of March 1997 and similar costs related to
Company's expense reduction efforts undertaken at the end of September 1997.
 
    Net interest income was $255,000 for the three months ended March 31, 1998
as compared to $443,000 for the three months ended March 31, 1997. The decrease
in net interest income was primarily due to the Company's lower cash balances
resulting from the utilization of cash to fund the Company's operating
activities.
 
    INCOME TAXES
 
    There was no provision for income tax in 1997. The provision for income
taxes in 1998 represents minimum state taxes.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    As of March 31, 1998, the Company's principal sources of liquidity consisted
of $19.5 million of cash and cash equivalents and a $5 million unsecured bank
line of credit which expires in October 1998. As of March 31, 1998, $1.5 million
was outstanding and $3.5 million was available under the line of credit. During
the three months ended March 31, 1998, cash utilized by operating activities was
$3.4 million, compared to $4.3 million for the three months ended March 31,
1997. Capital expenditures during the first three months of 1998, consisting
primarily of computer hardware and software purchases, were $414,000, compared
to $820,000 for the same period of 1997.
 
    The Company believes that its available cash and cash equivalents will be
sufficient to meet its working capital requirements at least through 1998.
 
YEAR 2000 COMPLIANCE
 
    The Company believes that its management information systems and
substantially all of its products are Year 2000 compliant or tolerant and that
the Year 2000 is not expected to materially impact the Company's business and
internal operations. However, Year 2000 considerations may have an effect on
certain of the Company's customers and suppliers, and thus may indirectly affect
the Company. Although the Company has not been advised of any significant
current or potential problems with its customers or suppliers that it believes
will have a material adverse effect on the Company's business, it is not
possible to quantify the effect of Year 2000 issues residing with the Company's
customers and suppliers.
 
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
 
    The Company desires to take advantage of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Specifically, the Company
wishes to alert readers that, except for the historical information contained
therein, the previous discussion under "Results of Operations", "Liquidity
 
                                       11
<PAGE>
and Capital Resources" and "Year 2000 Compliance" constitutes forward-looking
statements that are dependent on certain risks and uncertainties which may cause
actual results to differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company. The following is a description
of certain of the major risks and uncertainties.
 
    HISTORY OF LOSSES; SIGNIFICANT FLUCTUATIONS IN OPERATING RESULTS; UNCERTAIN
     PROFITABILITY
 
    The Company has experienced operating losses since inception, with, in
recent years, operating losses of $2.4 million in 1995, $11.7 million in 1996,
$18.0 million in 1997 and $3.2 million for the three months ended March 31,
1998. As of March 31, 1998, the Company had an accumulated deficit of
approximately $42.2 million. The Company has experienced, and may in the future
experience, significant fluctuations in revenues and operating results from
quarter to quarter and from year to year due to a combination of factors.
Factors that have in the past caused, or may in the future cause, the Company's
revenues and operating results to vary significantly from period to period
include: the timing of significant orders; the timing of customer implementation
plans; the relatively long length of the sales cycles for certain of the
Company's products; the market conditions in the networking industry; the timing
of capital expenditures by Sync's target market customers; competition and
pricing in the industry; the Company's success in developing, introducing and
shipping new products; new product introductions by the Company's competitors;
announcements by IBM relating to products, services or pricing relevant to the
Company; the rate of migration of large IBM customers to frame relay; production
or quality problems; changes in material costs; disruption in sources of supply;
changes in foreign currency exchange rates; and general economic conditions. In
addition, revenues and gross margins may fluctuate due to the mix of
distribution channels employed and the mix of products or services sold. For
example, the Company generally realizes a higher gross margin on direct sales
than on sales through its channel partners and other resellers. Accordingly, as
channel partners and other resellers continue to account for a majority of the
Company's net revenues, gross profit as a percentage of net revenues may
decline.
 
    The Company's future revenues are difficult to predict. Revenues and
operating results in any quarter depend on the volume and timing of, and the
ability to fulfill, orders received within the quarter. Sales of the Company's
products typically involve a sales cycle of several months or over a year from
the point of initial customer contact until receipt of the first system order,
and, in addition, the Company has in the past encountered, and may in the future
encounter, subsequent delays between initial orders and network-wide deployment.
There can be no assurance that average sales cycles will not increase in future
periods. Further, due to the Company's focus on its channel partner marketing
strategy, the Company's revenues in any period are highly dependent upon the
sales efforts and success of Sync's channel partners and other resellers, which
are not within the control of the Company. There can be no assurance that the
Company's channel partners and other resellers will give a high priority to the
marketing of the Company's products as compared to competitive products or
alternative networking solutions or that Sync's channel partners and other
resellers will continue to offer the Company's products. Significant portions of
the Company's expenses are relatively fixed in advance, based in large part on
the Company's forecasts of future sales. If sales are below expectations in any
given period, the adverse effect of a shortfall in sales on the Company's
operating results may be magnified by the Company's inability to adjust spending
to compensate for such shortfall. The Company has in the past and may in the
future reduce prices or increase spending to respond to competition or to pursue
new product or market opportunities. Accordingly, there can be no assurance that
the Company will be able to attain or sustain profitability on a quarterly or an
annual basis. In addition, if the Company's operating results fall below the
expectations of public market analysts and investors, the price of the Company's
common stock would likely be materially and adversely affected.
 
    UNCERTAIN MARKET ACCEPTANCE OF FRAME RELAY FOR MISSION-CRITICAL APPLICATIONS
 
    The market for SNA-over-frame relay products is relatively new and still
evolving. The success of the Company and its channel partners in generating
significant sales of frame relay access products will depend
 
                                       12
<PAGE>
in part on their ability to educate end users about the benefits of the
Company's technology and convince end users to switch their mission-critical
applications to frame relay. In addition, broad acceptance of frame relay
services will also depend upon the tariffs for such services, which are
determined by carriers. If the tariff structure for dedicated leased lines
becomes more favorable relative to tariffs for a comparable network utilizing
frame relay, the market for frame relay networking products could be adversely
affected. There can be no assurance that the market will adopt frame relay for
mission-critical applications to any significant extent. The failure of such
adoption to occur could have a material adverse effect on the Company's
business, operating results and financial condition.
 
    UNCERTAIN MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS; PRODUCT CONCENTRATION
 
    The Company currently derives substantially all of its revenues from its
frame relay access, circuit management, transmission and other products and
expects that revenues from these products will continue to account for
substantially all of its revenues for the foreseeable future. Broad market
acceptance of, and continuing demand for, these products, is, therefore,
critical to the Company's future success. Factors that may affect the market
acceptance of the Company's products include the extent to which frame relay
adopted for mission-critical applications, the availability and price of
competing products and technologies, announcements by IBM relating to products,
services or pricing relevant to the Company, the success of the sales efforts of
the Company and its resellers and tariff rates for carrier services. Moreover,
the Company's operating history in the WAN internetworking market and its
resources are limited relative to those of certain of its current and potential
competitors. The Company's future performance will also depend in part on the
successful development, introduction and market acceptance of new and enhanced
products. Failure of the Company's products to achieve market acceptance could
have a material adverse effect on the Company's business, operating results and
financial condition.
 
    DEPENDENCE ON CHANNEL PARTNERS AND OTHER RESELLERS
 
    The Company's channel partners and other resellers currently account, and
are expected to continue to account, for a majority of the Company's net
revenues. Sales through channel partners and other resellers accounted for
67.0%, 85.7%, and 88.1%, of net revenues of the Company in 1997, 1996 and 1995,
respectively. The Company currently maintains OEM, marketing and sales
arrangements with communications and networking companies such as IBM and 3Com,
as well as carriers such as Sprint, Ameritech, MCI, Intermedia Communications
and PacBell and system integrators such as Electronic Data Systems and Diebold.
The Company's agreements with its channel partners and other resellers do not
restrict the sale of products that compete with those of the Company. In
addition, these agreements generally provide for discounts based on expected or
actual volumes of products purchased or resold by the reseller in a given
period, do not require minimum purchases, and prohibit distribution of certain
products by the Company through certain categories of third parties under
certain conditions. The agreements also specify that the channel partners and
certain other resellers will be provided manufacturing rights and access to
certain of the Company's source code upon the occurrence of specified conditions
or defaults.
 
    Certain of the Company's channel partners offer alternative solutions,
designed by themselves or third parties, for SNA internetworking or have
pre-existing relationships with current or potential competitors of the Company.
Certain of the Company's channel partners have in the past developed competitive
products and terminated their relationships with the Company, and such
developments could occur in the future. Many of the Company's resellers offer
competitive products manufactured either by third parties or by themselves. For
example, NET and Racal, which accounted for, respectively, 6.6% and 4.4% of the
Company's net revenues in 1996, have developed competitive products and product
strategies and accordingly, did not account for a significant portion of 1997
revenues. Sales to 3Com accounted for 6.5%, 19.2% and 17.9% of net revenues of
the Company in 1997, 1996 and 1995, respectively. The Company believes the
amount of revenues derived from sales to 3Com will likely decline as competitive
products impact the conversion product business.
 
                                       13
<PAGE>
    The Company generally realizes a higher gross margin on direct sales than on
sales through its channel partners and other resellers. Accordingly, as channel
partners and other resellers continue to account for a majority of the Company's
net revenues, gross profit as a percentage of net revenues may decline. Each of
the Company's channel partners or other resellers can cease marketing the
Company's products at the reseller's option, under certain conditions, with
limited notice and with little or no penalty. There can be no assurance that the
Company will retain its current channel partners or other resellers or that it
will be able to recruit additional or replacement channel partners. The loss of
one or more of the Company's channel partners or other resellers could have a
material adverse effect on the Company's business, operating results and
financial condition. In addition, there can be no assurance that the Company's
channel partners and other resellers will give priority to the marketing of the
Company's products as compared to competitive products or alternative networking
solutions or that Sync's channel partners and other resellers will continue to
offer the Company's products. Any reduction or delay in sales of the Company's
products by its channel partners could have a material adverse effect on the
Company's business, operating results and financial condition.
 
    RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCTS
 
    The market for the Company's products is characterized by rapidly changing
technology, evolving industry standards and frequent new product introductions.
The Company's success will depend to a substantial degree upon its ability to
develop and introduce in a timely fashion enhancements to its existing products
and new products that meet changing customer requirements and emerging industry
standards. The development of new, technologically advanced products is a
complex and uncertain process requiring high levels of innovation, as well as
the accurate anticipation of technological and market trends. There can be no
assurance that the Company will be able to identify, develop, manufacture,
market or support new products successfully, that such new products will gain
market acceptance or that the Company will be able to respond effectively to
technological changes, emerging industry standards or product announcements by
competitors. In addition, the Company has on occasion experienced delays in the
introduction of product enhancements and new products. There can be no assurance
that in the future the Company will be able to introduce product enhancements or
new products on a timely basis. Further, from time to time, the Company may
announce new products, capabilities or technologies that have the potential to
replace or shorten the life cycle of the Company's existing product offerings.
There can be no assurance that announcements of product enhancements or new
product offerings will not cause customers to defer purchasing existing Company
products or cause resellers to return products to the Company. Failure to
introduce new products or product enhancements effectively and on a timely
basis, customer delays in purchasing products in anticipation of new product
introductions and any inability of the Company to respond effectively to
technological changes, emerging industry standards or product announcements by
competitors could have a material adverse effect on the Company's business,
operating results and financial condition.
 
    PRODUCT ERRORS
 
    Products as complex as those offered by the Company may contain undetected
software or hardware errors when first introduced or as new versions are
released. Such errors have occurred in the past, and there can be no assurance
that, despite testing by the Company and by current and potential customers,
errors will not be found in new or enhanced products after commencement of
commercial shipments. Moreover, there can be no assurance that once detected,
such errors can be corrected in a timely manner, if at all. Software errors may
take several months to correct, if they can be corrected at all, and hardware
errors may take even longer to rectify. The occurrence of such software or
hardware errors, as well as any delay in correcting them, could result in the
delay or loss of market acceptance of the Company's products, additional
warranty expense, diversion of engineering and other resources from the
Company's product development efforts or the loss of credibility with Sync's
channel partners and other resellers, any of which could have a material adverse
effect on the Company's business, operating results and financial condition.
 
                                       14
<PAGE>
    INTENSE COMPETITION
 
    The market for communications products is intensely competitive and subject
to rapid technological change and emerging industry standards. The Company's
current competitors include internetworking companies, such as Cisco and Bay
Networks; FRAD providers, such as Hypercom, Motorola ISG and Cabletron; and
circuit management and digital transmission providers such as Visual Networks
Digital Link, Racal, AT&T Paradyne and Adtran, among others. Potential
competitors include other internetworking and WAN access and transmission
companies, frame relay switch providers, IBM and the Company's other channel
partners. Certain of these companies have recently announced products and
intentions to enter the frame relay access or circuit management market. Many of
the Company's current and potential competitors have longer operating histories
and greater financial, technical, sales, marketing and other resources, as well
as greater name recognition and a larger customer base, than does the Company.
As a result, they may be able to respond more quickly to new or emerging
technologies and changes in customer requirements or may be able to devote
greater resources to the development, promotion, sale and support of their
products than the Company. Many also have long-standing customer relationships
with large enterprises that are part of the Company's target market, and these
relationships may make it more difficult to complete sales of the Company's
products to these enterprises. Further, certain of the Company's channel
partners have in the past developed competitive products and terminated their
relationships with the Company, and such developments could occur in the future.
As a consequence of all these factors, the Company expects increased
competition, particularly in the frame relay market. Increased competition could
result in significant price competition, reduced profit margins or loss of
market share, any of which could have a material adverse effect on the Company's
business, operating results and financial condition. There can be no assurance
that the Company will be able to compete successfully in the future.
 
    DEPENDENCE ON THE IBM CUSTOMER BASE
 
    The Company's frame relay access products are targeted at the large
installed base of IBM customers utilizing SNA networks. Thus, the Company faces
the risks associated with a relatively concentrated customer base, including the
possibility that larger IBM customers may migrate to frame relay at a slower-
than-expected rate, if at all, and the possibility that IBM customers may
purchase IBM-sponsored frame relay products other than Sync products. There can
be no assurance that IBM will continue to support frame relay, that IBM will not
develop or promote SNA-over-frame relay products competitive with the Company's
products, that the relationship between the Company and IBM will be successful,
that IBM will not terminate the relationship or that IBM will not endorse the
products of competitors or networking solutions not offered by the Company. Any
of these events could have a material adverse effect on the Company's business,
operating results and financial condition.
 
    DEPENDENCE ON CONTRACT MANUFACTURERS
 
    The Company's manufacturing operations consist primarily of materials
planning and procurement, light assembly, system integration, testing and
quality assurance. The Company entered into an arrangement with contract
manufacturers in 1995 and 1996 to outsource substantial portions of its
procurement, assembly and system integration operations. There can be no
assurance that these independent contract manufacturers will be able to meet the
Company's future requirements for manufactured products or that such independent
contract manufacturers will not experience quality problems in manufacturing the
Company's products. The inability of the Company's contract manufacturers to
provide the Company with adequate supplies of high quality products could have a
material adverse effect upon the Company's business, operating results and
financial condition. The loss of any of the Company's contract manufacturers
could cause a delay in Sync's ability to fulfill orders while the Company
attempts to identify a replacement manufacturer. Such an event could have a
material adverse effect on the Company's business, operating results and
financial condition.
 
                                       15
<PAGE>
    The Company's manufacturing procedures may in certain instances create a
risk of excess or inadequate inventory if orders do not match forecasts. The
Company increased manufacturing capacity in 1995 and 1996 through the expansion
of its relationships with contract manufacturers and internal manufacturing
resources. Any manufacturing delays, excess manufacturing capacity or
inventories or inability to increase manufacturing capacity, if required, could
have a material adverse effect on the Company's business, operating results and
financial condition.
 
    DEPENDENCE ON SUPPLIERS
 
    Certain key components used in the manufacture of the Company's products are
currently purchased only from single or limited sources. At present,
single-sourced components include programmable integrated circuits, selected
other integrated circuits and cables, custom-molded plastics and custom-tooled
sheet metal, and limited-sourced components include flash memories, DRAMs,
printed circuit boards and selected integrated circuits. The Company generally
relies upon contract manufacturers to buy component parts that are incorporated
into board assemblies. The Company buys directly final assembly parts, such as
plastics and metal covers, cables and other parts used in final configurations.
The Company generally does not have long-term agreements with any of these
single or limited sources of supply. Any loss in a supplier, increase in
required lead times, increase in price of component parts, interruption in the
supply of any of these components, or the inability of the Company to procure
these components from alternate sources at acceptable prices and within a
reasonable time, could have a material adverse effect upon the Company's
business, operating results and financial condition. If orders do not match
forecasts, the Company may have excess or inadequate inventory of certain
materials and components, and suppliers may demand longer lead times, higher
prices or termination of contracts. From time to time the Company has
experienced shortages of certain components and has paid above-market prices to
acquire such components on an accelerated basis or has experienced delays in
fulfilling orders while waiting to obtain the necessary components. Such
shortages may occur in the future and could have a material adverse effect on
the Company's business, operating results and financial condition.
 
    DEPENDENCE ON AND RISKS ASSOCIATED WITH INTERNATIONAL SALES
 
    Sales to customers outside of the United States accounted for approximately
6.5%, 19.1%, 12.7% and 10.7% of the Company's net revenues in the three months
ended March 31, 1998 and in fiscal years 1997, 1996 and 1995, respectively.
However, these percentages may understate sales of the Company's products to
international end users because certain of the Company's U.S.-based channel
partners market the Company's products abroad. The Company currently anticipates
that international sales may continue to account for a significant percentage of
the Company's net revenues in future periods. However, as a result of the recent
Asian currency crisis, the Company experienced project delays and order
cancellations during the fourth quarter of 1997 and has continued to experience
sluggishness in it sales to the Pacific Rim during the first quarter of 1998.
Sales to the Pacific Rim during the first quarter of 1998 represented 6.5% of
the Company's net revenue for such period.
 
    Historically, the Company's international sales have been conducted
primarily through independent country-specific distributors. The Company intends
to market its products in foreign countries in the future increasingly through
its channel partners. Failure of these resellers to market the Company's
products internationally or the loss of any of these resellers could have a
material adverse effect on the Company's business, operating results and
financial condition. In addition, the Company's ability to increase sales of its
products to international end users may be limited if the carrier services, such
as frame relay, or protocols supported by the Company's products are not widely
adopted internationally. A number of additional risks are inherent in
international transactions. The Company's international sales currently are U.S.
dollar-denominated. As a result, an increase in the value of the U.S. dollar
relative to foreign currencies, as has occurred recently in several Asian
markets, could make the Company's products less competitive in international
markets. International sales may also be limited or disrupted by the imposition
of governmental controls, export license requirements, restrictions on the
export of critical technology,
 
                                       16
<PAGE>
currency exchange fluctuations, political instability, trade restrictions and
changes in tariffs. In addition, sales in Europe and certain other parts of the
world typically are adversely affected in the third quarter of each year as many
customers and end users reduce their business activities during the summer
months. These international factors could have a material adverse effect on
future sales of the Company's products to international end users and,
consequently, the Company's business, operating results and financial condition.
 
    DEPENDENCE ON PROPRIETARY TECHNOLOGY
 
    The Company's future success depends, in part, upon its proprietary
technology. The Company does not hold any patents and currently relies on a
combination of contractual rights, trade secrets and copyright laws to establish
and protect its proprietary rights in its products. There can be no assurance
that the steps taken by the Company to protect its intellectual property will be
adequate to prevent misappropriation of its technology or that the Company's
competitors will not independently develop technologies that are substantially
equivalent or superior to the Company's technology. In the event that protective
measures are not successful, the Company's business, operating results and
financial condition could be materially and adversely affected. In addition, the
laws of some foreign countries do not protect the Company's proprietary rights
to the same extent as do the laws of the United States. The Company is also
subject to the risk of adverse claims and litigation alleging infringement of
intellectual property rights of others. There can be no assurance that third
parties will not assert infringement claims in the future with respect to the
Company's current or future products or that any such claims will not require
the Company to enter into license arrangements or result in litigation,
regardless of the merits of such claims. No assurance can be given that any
necessary licenses will be available or that, if available, such licenses can be
obtained on commercially reasonable terms. Should litigation with respect to any
such claims commence, such litigation could be extremely expensive and
time-consuming and could have a material adverse effect on the Company's
business, operating results and financial condition regardless of the outcome of
such litigation.
 
    TARIFF AND REGULATORY MATTERS
 
    Rates for public telecommunications services, including features and
capacity of such services, are governed by tariffs determined by carriers and
subject to regulatory approval. Future changes in these tariffs could have a
material effect on the Company's business. For example, should tariffs for frame
relay services increase in the future relative to tariffs for dedicated leased
lines, the cost-effectiveness of the Company's products could be reduced, which
could have a material adverse effect on the Company's business, operating
results and financial condition. In addition, the Company's products must meet
industry standards and receive certification for connection to certain public
telecommunications networks prior to their sale. In the United States, the
Company's products must comply with various regulations defined by the Federal
Communications Commission and Underwriters Laboratories. Internationally, the
Company's products must comply with standards established by telecommunications
authorities in various countries as well as with recommendations of the
Consultative Committee on International Telegraph and Telephony. In addition,
carriers require that equipment connected to their networks comply with their
own standards, which in part reflect their currently installed equipment. Some
public carriers have installed equipment that does not fully comply with current
industry standards, and this noncompliance must be addressed in the design of
the Company's products. Any future inability to obtain on a timely basis or
retain domestic or foreign regulatory approvals or certifications or to comply
with existing or evolving industry standards could have a material adverse
effect on the Company's business, operating results and financial condition.
 
    DEPENDENCE ON KEY PERSONNEL
 
    The Company's success depends, to a significant degree, upon the continued
contributions of its key management, sales, marketing, research and development
and manufacturing personnel. Four of the eight
 
                                       17
<PAGE>
current executive officers joined the Company since January 1995, and thus the
management team is still relatively new. The Company believes its future success
will also depend in large part upon its ability to attract and retain highly
skilled engineering, managerial, sales and marketing personnel, and development
engineers. Competition for such personnel is intense, and there can be no
assurance that the Company will be successful in attracting and retaining such
personnel. During 1997, the Company implemented significant expense reductions,
including reductions in force, with the goal of enabling the Company to achieve
profitability at lower revenues. The loss of the services of these or any of the
Company's other key personnel or the failure to attract or retain qualified
personnel in the future could have a material adverse effect on the Company's
business, operating results or financial condition.
 
    GENERAL ECONOMIC CONDITIONS
 
    Demand for the Company's products depends in large part on the overall
demand for communications and networking products, which has in the past and may
in the future fluctuate significantly based on numerous factors, including
capital spending levels and general economic conditions. There can be no
assurance that the Company will not experience a decline in demand for its
products due to general economic conditions. Any such decline could have a
material adverse effect on the Company's business, operating results and
financial condition.
 
    VOLATILITY OF STOCK PRICE
 
    Factors such as announcements of technological innovations or the
introduction of new products by the Company or its competitors, as well as
market conditions in the technology sector, may have a significant effect on the
market price of the Company's common stock. Further, the stock market has
experienced volatility which has particularly affected the market prices of
equity securities of many high technology companies and which often has been
unrelated to the operating performance of such companies. These market
fluctuations may have an adverse effect on the price of the Company's common
stock.
 
    ANTI-TAKEOVER PROVISIONS
 
    The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law, an anti-takeover law. In addition, certain provisions
of the Company's charter documents, including provisions eliminating cumulative
voting, eliminating the ability of stockholders to call meetings or to take
actions by written consent and limiting the ability of stockholders to raise
matters at a meeting of stockholders without giving advance notice, may have the
effect of delaying or preventing a change in control or management of the
Company, which could have an adverse effect on the market price of the Company's
common stock. Certain of the Company's stock option and purchase plans and
agreements provide for assumption of such plans, or, alternatively, immediate
vesting upon a change of control or similar event. In addition, the Company has
entered into severance agreements with its officers, pursuant to which they are
entitled to specified severance payments if they are actually or constructively
terminated within specified time periods following a change of control of the
Company. The Board of Directors has authority to issue up to 2,000,000 shares of
preferred stock and to fix the rights, preferences, privileges and restrictions,
including voting rights, of these shares without any further vote or action by
the stockholders. The rights of the holders of the common stock will be subject
to, and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire a majority of the outstanding voting stock of the
Company, thereby delaying, deferring or preventing a change in control of the
Company. Furthermore, such preferred stock may have other rights, including
economic rights senior to the common stock, and as a result, the issuance of
such preferred stock could have a material adverse effect on the market value of
the common stock. The Company has no present plan to issue shares of preferred
stock.
 
                                       18
<PAGE>
                              SYNC RESEARCH, INC.
 
PART II.  OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
    On November 5, 1997, an action entitled Dalarne Partners, Ltd. v. Sync
Research, Inc., et al., No. SACV97-877 AHS(EEx) was filed against the Company
and certain of its directors and officers. The action was filed in the U.S.
District Court for the Central District of California, Southern Division. The
action purports to be a class action lawsuit brought on behalf of purchasers of
the Company's common stock during the period from November 18, 1996 through
March 20, 1997. The complaint asserts claims for violation of the Securities
Exchange Act of 1934. The complaint seeks to recover damages in an unspecified
amount. No trial date or other deadline has been established. The Company
intends to defend this lawsuit vigorously.
 
ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS
 
    (d) USE OF PROCEEDS
 
    In connection with its initial public offering in 1995, the Company filed a
Registration Statement on Form S-1, SEC File No. 33-96910 (the "REGISTRATION
STATEMENT"), which was declared effective by the Commission on November 8, 1995.
Pursuant to the Registration Statement, the Company registered and sold
2,585,000 shares of its Common Stock, $0.001 par value per share, for its own
account. The offering was completed on November 9, 1995. The aggregate offering
price of the registered shares was $51,700,000. The managing underwriters of the
offering were BancAmerica Robertson, Stephens (formerly Robertson, Stephens &
Company), BT Alex. Brown (formerly Alex. Brown & Sons Incorporated) and Dain
Rauscher Wessels (formerly Wessels, Arnold & Henderson). From November 9, 1995
to March 31, 1998, the Company incurred the following expenses in connection
with the offering:
 
<TABLE>
<S>                                                               <C>
Underwriting discounts and commissions..........................  $3,619,000
Other expenses..................................................    912,471
                                                                  ---------
    Total Expenses..............................................  $4,531,471
                                                                  ---------
                                                                  ---------
</TABLE>
 
    All of such expenses were direct or indirect payments to others.
 
    The net offering proceeds to the Company after deducting the total expenses
above were $47,168,529. From November 9, 1995 to March 31, 1998, the Company
used such net offering proceeds, in direct or indirect payments to others, as
follows:
 
<TABLE>
<S>                                                              <C>
Construction of plant, building and facilities.................  $  848,138
Purchase and installment of machinery and equipment............   3,375,073
Acquisition of other business(es)..............................   5,338,000
Working capital................................................   3,482,486
Operating losses...............................................  25,921,543
                                                                 ----------
    Total......................................................  $38,965,240(1)
                                                                 ----------
                                                                 ----------
</TABLE>
 
------------------------
 
(1) Excludes operating losses, capital expenditures and working capital changes
    of Tylink Corporation ("Tylink") prior to the Company's acquisition of
    Tylink in August 1996.
 
                                       19
<PAGE>
    In addition, the Company used aggregate proceeds of $316,292 to make
departing payments to departing officers. This use of proceeds does not
represent a material change in the use of proceeds described in the prospectus
of the Registration Statement.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
    None.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    None.
 
ITEM 5.  OTHER INFORMATION
 
    None.
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
    (A) EXHIBITS
 
        10.27 1996 Non-Executive Stock Option Plan.
 
        27.1 Financial Data Schedule.
 
    (B) REPORTS ON FORM 8-K
 
        No Reports on Form 8-K were filed during the quarter ended March 31,
    1998.
 
                                       20
<PAGE>
                                   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, thereunto duly authorized.
 
                                SYNC RESEARCH, INC.
 
Date: May 15, 1998              By:            /s/ WILLIAM K. GUERRY
                                     -----------------------------------------
                                                 William K. Guerry
                                           VICE PRESIDENT OF FINANCE AND
                                                   ADMINISTRATION
                                            AND CHIEF FINANCIAL OFFICER
                                      (DULY AUTHORIZED SIGNATORY AND PRINCIPAL
                                         FINANCIAL AND ACCOUNTING OFFICER)
 
                                       21