U.S. SECURITIES AND EXCHANGE
                                   COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB

(Mark One)
[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934
             For the fiscal quarter ended           June 30, 2004
                                                    -------------

[   ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
             For the transition period from             to

             Commission file number                0-17580
                                                   -------

                              SYNERGX SYSTEMS INC.
        (Exact name of small business issuer as specified in its charter)

       Delaware                                              11-2941299
--------------------------------------                  -----------------------
(State or jurisdiction of incorporation            (IRS employer identification
or organization)                                           Number)


                  209 Lafayette Drive, Syosset, New York 11791
               (Address of Principal Executive Offices) (Zip code)


                                 (516) 433-4700
                           (Issuer's telephone number)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act during the  preceding 12 months (or for
such shorter period that registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days.
Yes[ X ] No[ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 4, 2004, 4,896,862
shares of Registrant's Common Stock were issued and outstanding.

Transitional Small Business Disclosure Format (check one) Yes[   ]     No[ X ]
<PAGE>

                                      INDEX


Part I - Financial Information (unaudited)                                 Page

     Item 1.  Financial Statements.

     Condensed Consolidated Balance Sheet at June 30, 2004                   3

     Condensed Consolidated Statements of Operations for the Three and
          Nine Month Periods Ended June 30, 2004 and 2003                    5

     Condensed Consolidated Statements of Cash Flows for the Three and
          Nine Month Periods Ended June 30, 2004 and 2003                    6

     Notes to Condensed Consolidated Financial Statements                    7

     Item 2.  Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                      12

     Item 3.   Controls and Procedures                                      16

Part II - Other Information

     Item 1.  Legal Proceedings.                                            17

     Item 2.  Changes in Securities.                                        17

     Item 3.  Defaults Upon Senior Securities.                              17

     Item 4.  Submission of Matters to a Vote of Security Holders.          17

     Item 5.  Other Information.                                            17

     Item 6.  Exhibits and Reports on Form 8-K                              17

     Signatures                                                             18


<PAGE>
                         Part I - FINANCIAL INFORMATION

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)



                                                                  June 30,
                                                                    2004
                                                               -------------
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                    $   408,618
  Accounts receivable, principally trade, less allowance
     for doubtful accounts of $411,541                           6,582,537
  Inventories                                                    3,220,590
  Deferred taxes                                                   307,400
  Prepaid expenses and other current assets                        520,118
                                                                -----------
               TOTAL CURRENT ASSETS                             11,039,263
                                                                -----------


PROPERTY AND EQUIPMENT -at cost, less
   accumulated depreciation and amortization of $1,485,671         358,487

OTHER ASSETS                                                       660,929

                                                                         -

                                                                         -
                                                                -----------
               TOTAL ASSETS                                    $12,058,679
                                                                -----------

See accompanying Notes to the Condensed Consolidated Financial Statements
<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  (Unauditied)


                                                                  June 30,
                                                                    2004
                                                                -----------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

   Notes and capital leases payable - current portion         $    31,357
   Accounts payable and accrued expenses                        3,014,238
   Deferred revenue                                               490,604
                                                                ----------
               TOTAL CURRENT LIABILITIES                        3,536,199



   Note payable to bank                                         2,180,676
   Notes and capital leases payable - less current portion         27,157
   Deferred taxes                                                  19,900
                                                                ----------
               TOTAL LIABILITIES                                5,763,932
                                                                ----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

  Preferred stock, 2,000,000 shares authorized-
     none issued and outstanding
  Common stock, 10,000,000 shares authorized, $.001
     par value; issued and outstanding 4,896,862 shares             4,897
  Capital in excess of par                                      6,564,262
  Accumulated deficit                                            (274,412)
                                                                ----------
                                                                6,294,747
                                                                ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $12,058,679
                                                               ===========

See accompanying Notes to the Condensed Consolidated Financial Statements

<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                             For the  Three Months Ended June 30,
                                                                                 2004                 2003
                                                                              ----------            -----------
<S>                                                                           <C>                   <C>
Product sales                                                                 $4,808,106            $3,442,433
Subcontract sales                                                                117,338                65,250
Service revenue                                                                1,155,628             1,150,175
                                                                               ----------            ----------
Total revenues                                                                 6,081,072             4,657,858
                                                                               ----------            ----------


Cost of product sales                                                          3,007,134             2,280,600
Cost of subcontract sales                                                         95,110                59,736
Cost of service                                                                  812,035               810,267
Selling, general and administrative                                            1,579,157             1,367,466
Interest expense                                                                  18,823                20,191
Depreciation and amortization                                                     44,223                43,530
Loss on equity  investment                                                        20,000
                                                                               ----------            ----------
                                                                               5,576,482             4,581,790
                                                                               ----------            ----------
Income before provision for
  income taxes                                                                   504,590                76,068
                                                                               ----------            ----------
Provision for income taxes:
   Current                                                                       195,800                34,000
   Deferred                                                                        7,200
                                                                               ----------            ----------
                                                                                 203,000                34,000

                                                                               ----------            ----------
Net Income                                                                    $  301,590            $   42,068
                                                                               ==========            ==========
Earnings per common share
  Basic earnings per share                                                         $0.06                 $0.01
                                                                                   =====                 =====
  Diluted earnings per share                                                       $0.06                 $0.01
                                                                                   =====                 =====

Weighted average number of common shares outstanding                           4,788,312             3,851,048

Weighted average number of common and dilutive
  common shares outstanding                                                    5,116,631             4,519,456
</TABLE>

See accompanying Notes to the Condensed Consolidated Financial Statements

<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                              For the Nine Months Ended June 30,
                                                                                 2004                 2003
                                                                              ----------            -----------
<S>                                                                          <C>                   <C>
Product sales                                                                $11,987,372           $10,247,462
Subcontract sales                                                                260,873               508,433
Service revenue                                                                3,424,804             3,328,246
                                                                              -----------           -----------
Total revenues                                                                15,673,049            14,084,141
                                                                              -----------           -----------


Cost of product sales                                                          7,925,411             6,816,016
Cost of subcontract sales                                                        214,778               415,444
Cost of service                                                                2,447,012             2,320,164
Selling, general and administrative                                            4,449,676             4,103,325
Interest expense                                                                  59,318                47,583
Depreciation and amortization                                                    132,670               131,104
Loss on equity  investment                                                        52,000
                                                                              -----------           -----------
                                                                              15,280,865            13,833,636
                                                                              -----------           -----------

Income before provision for income taxes                                         392,184               250,505
                                                                              -----------           -----------
Provision for income taxes:
   Current                                                                       168,000               122,000
   Deferred                                                                      (10,000)                3,000
                                                                              ------------          -----------
                                                                                 158,000               125,000

                                                                              -----------           -----------
Net Income                                                                      $234,184              $125,505
                                                                              ===========           ===========
Earnings Per Common Share
  Basic Earnings Per Share                                                         $0.05                 $0.03
                                                                                   =====                 =====
  Diluted Earnings Per Share                                                       $0.05                 $0.03
                                                                                   =====                 =====

Weighted average number of common shares outstanding                           4,555,944             3,782,916

Weighted average number of common and dilutive
   common share equivalents outstanding                                        5,064,697             4,284,851
</TABLE>

See accompanying Notes to the Condensed Consolidated Financial Statements

<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                              For the Nine Months Ended June 30,
                                                                                  2004                 2003
                                                                                -------               ---------
OPERATING ACTIVITIES
<S>                                                                             <C>                   <C>
Net income                                                                    $  234,184            $  125,505
 Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:
         Depreciation and amortization                                           132,670               131,104
         Deferred (benefit) tax                                                  (10,000)                3,000
         Provision for doubtful accounts                                               -                (7,483)
         Loss on equity investment                                                52,000
  Changes in operating assets and liabilities:
    Accounts receivable                                                         (788,616)             (281,962)
    Inventories                                                                 (772,020)             (404,535)
    Prepaid expenses and other current assets                                    (64,922)              (58,208)
    Other assets                                                                 (18,875)              (64,288)
    Accounts payable and accrued expenses                                         87,974                36,140
    Deferred revenue                                                              55,713                57,175
                                                                               ----------            ----------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                           (1,091,892)             (463,552)
                                                                               ----------            ----------
INVESTING ACTIVITIES
  Purchases of property and equipment                                            (67,426)             (130,875)
                                                                               ----------            ----------
NET CASH USED IN INVESTING ACTIVITIES                                            (67,426)             (130,875)
                                                                               ----------            ----------
FINANCING ACTIVITIES
  Principal payments on notes payable and capital lease obligations              (98,620)             (122,676)
  Payments and proceeds from revolving line of credit - net                      925,173
  Proceeds from exercise of stock options and warrants                           448,197               657,283
                                                                               ----------            ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                            1,274,750               534,607
                                                                               ----------            ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             115,432               (59,820)

Cash and cash equivalents at beginning of period                                 293,186               200,201
                                                                               ----------            ----------
Cash and cash equivalents at end of period                                    $  408,618            $  140,381
                                                                               ==========            ==========
SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid during the period for:
     Income taxes                                                             $  130,519            $   67,476
     Interest                                                                 $   70,416            $   48,511
</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the nine  months  ended June 30, 2004 and 2003,  the Company  incurred no
capital lease obligations for the acquisition of equipment.

In the quarter ended June 30, 2003,  Synergx purchased from Nafund Inc. a 24.99%
investment  in Secure 724 in  exchange  for 300,000  shares of Common  Stock and
warrants to purchase  50,000 shares of Common Stock,  with an aggregated  market
value of $432,500, which is included in OTHER ASSETS (See Note 7)

See accompanying Notes to the Condensed Consolidated Financial Statements


<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         NINE MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

1. BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
for interim financial information.  Accordingly,  they do not include all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered  necessary in order to make the financial  statements  not misleading
have been  included.  Results for the three and nine months  ended June 30, 2004
are not  necessarily  indicative  of the results  that may be  expected  for the
fiscal year ending  September 30, 2004.  For further  information,  refer to the
consolidated  financial  statements  and footnotes  thereto  included in Synergx
Systems Inc.  ("Synergx" or "the  Company") and  Subsidiaries'  annual report on
Form 10-KSB for the year ended September 30, 2003.

2. REVENUE RECOGNITION

Product sales include sale of systems, which are similar in nature, that involve
fire alarm,  life safety and security (CCTV and card access),  transit (on board
systems) and  communication  (paging,  announcement and  audio/visual).  Product
sales  represent  sales of  product  along  with the  integration  of  technical
services at a fixed price under a contract with an electrical  contractor or end
user customer or customer  agent.  Product sales are allocated  using a constant
gross profit  percentage over the entire  contract,  and  recognized,  using the
percentage-of-completion   method  of   accounting.   The  Company   utilizes  a
units-of-work  performed method to measure  progress  towards  completion of the
contract.  The  effects  of  changes  in  contract  terms are  reflected  in the
accounting period in which they become known. Contract terms provide for billing
schedules  that  differ  from  revenue  recognition  and give  rise to costs and
estimated  profits in excess of  billings,  and  billings in excess of costs and
estimated  profits.  Costs and  estimated  profits in excess of billing were not
material  at June  30,  2004  and  2003  and  have  been  included  in  accounts
receivable.  There were no billing in excess of costs and  estimated  profits at
June 30, 2004 and 2003.

Subcontract   sales  principally   represents   revenue  related  to  electrical
installation  of wiring and piping  performed by others for the Company when the
Company  acts  as the  prime  contractor  and  sells  its  products  along  with
electrical  installation.  Subcontract  revenue  is also  recognized  during the
entire  project  using  the  percentage-of-completion  method of  accounting  as
electrical installation is performed at the job site.

Service  revenue  from  separate  maintenance   contracts  is  recognized  on  a
straight-line basis over the term of the respective contract, which is generally
one  year.   Non-contract  service  revenue  is  recognized  when  services  are
performed.

<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

                         NINE MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

3. INVENTORIES

Inventories are priced at the lower of cost (first-in, first-out) or market and
consist primarily of raw materials.

4. LONG TERM DEBT

On October 9, 2003, the Company entered into a new $3 million  revolving  credit
facility with Hudson United Bank (the "Credit  Facility").  The Credit  Facility
has an interest rate of prime plus 1/4% on outstanding  balances  (4.25% at June
30,  2004) and expires in October  2005.  The Credit  Facility is secured by all
assets of the Company and all of its operating subsidiaries. Advances under this
Credit  Facility are measured  against a borrowing  base  calculated on eligible
receivables and inventory.

Initial  proceeds  from the new  Credit  Facility  were used to pay off a former
credit facility with Citizens Business Credit. At June 30, 2004, the full amount
of the Credit  Facility was available  under the borrowing base  calculation and
$2,181,000 was outstanding under this facility.

The Credit Facility includes certain  restrictive  covenants,  which among other
things, impose limitations on declaring or paying dividends,  acquisitions,  and
capital expenditures. The Company is also required to maintain certain financial
ratios and tangible net worth covenants. At June 30, 2004 the Company was not in
default with any of its financial covenants.

5. EXERCISE OF WARRANTS AND STOCK OPTIONS

Genterra Inc. (formerly  Mirtronics Inc.) the largest stockholder of the Company
had  outstanding  warrants to purchase  620,000  shares of the Company's  Common
Stock,  which  were  issued  in 1998,  and were  exercisable  at any time  until
December  31, 2003 at an exercise  price of $.51 per share.  Genterra  exercised
these warrants in December 2003 for a total consideration of $316,200.

On June 15,  2004,  an  unaffiliated  investor  exercised  warrants  to purchase
100,000  shares of the Company's  Common Stock at an exercise  price of $70,000.
These  warrants were part of a private  placement of 340,000 units sold for $.70
per Unit.  Each unit  consists  of one share of Common  Stock and one warrant to
purchase an  additional  share of Common Stock at $.70 per share for a period of
24  months  from  September  30,  2002.  The  remaining   240,000  warrants  are
outstanding as of June 30, 2004.

During the nine months ending June 30, 2004,  employees  exercised stock options
to purchase 115,718 shares of Common Stock for a total consideration of $61,997.

<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

                         NINE MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

6. EARNINGS (LOSS) PER SHARE

The Financial  Accounting Standards Board ("FASB") issued Statement of Financial
Accounting  Standards  ("SFAS")  No. 128  "Earnings  Per Share"  which  requires
companies to report basic and diluted  earnings per share ("EPS")  computations.
Basic EPS excludes dilution and is based on the  weighted-average  common shares
outstanding  and diluted EPS gives  effect to potential  dilution of  securities
that could  share in the  earnings of the  Company.  Diluted  EPS  reflects  the
assumed  issuance of shares with respect to the Company's  employee stock option
plan and  warrants.  The Company did not have stock based  compensation  for the
three and nine months ended June 30, 2004 or 2003.
<TABLE>
<CAPTION>

                                              Three Months ended June 30,              Nine Months ended June 30,
Basic EPS Computation                            2004                 2003               2004                   2003
                                       -------------------------------------         ----------------------------------
<S>                                          <C>                  <C>                <C>                   <C>
    Net Income available to common
       stockholders                            $301,590             $42,068            $234,184              $125,505
Weighted average outstanding shares           4,788,312           3,851,048           4,555,944             3,782,916
    Basic EPS                                      $.06                $.01                $.05                  $.03
                                                   ====                ====                ====                  ====


Diluted EPS Computation

Net Income available to common
         stockholders                          $301,590             $42,068            $234,184              $125,505
                                               ========             =======            ========              ========

Weighted-average shares-basic                 4,788,312           3,851,048           4,555,944             3,782,916
                                              ---------           ---------           ---------             ---------
   Plus: Incremental shares from
            assumed conversions
         Employee Stock Options *                87,863             122,795             125,746                96,135
         Warrants                               240,456             545,613             383,007               405,800
                                                -------             -------             -------               -------
    Dilutive potential common shares            328,319             668,408             508,753               501,935
                                                -------             -------             -------               -------
    Adjusted weighted average shares diluted  5,116,631           4,519,456           5,064,697             4,284,851
                                              ---------           ---------           ---------             ---------

    Diluted EPS                                    $.06                $.01                $.05                  $.03
                                                   ====                ====                ====                  ====
</TABLE>

*50,000 warrants were antidilutive in the nine month period ending June 30, 2003
and therefore not included in the above calculation.

<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

                         NINE MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

7. INVESTMENT IN SECURE 724 L.P.

On May 29, 2003, the Company (through a special purpose Nova Scotia  subsidiary)
acquired  25% of the  equity of Secure  724 LP  ("Secure  724 LP"),  an  Ontario
limited partnership, from Nafund Inc. ("Nafund") in consideration of (a) 300,000
shares of Common Stock;  (b) warrants to purchase  50,000 shares of Common Stock
at $1.15 per share for 24 months; (c) agreeing to provide secured loans of up to
Cdn$300,000  (which was approximately  $229,000 U.S. at June 30, 2004) to Secure
724 LP pro rata with  equity/loans  to be provided by Nafund and tied to certain
development  milestones  and (d) 150,000  shares of Common Stock to be issued in
the future upon Secure 724 LP satisfying the milestones and Nafund providing the
funding.  Either the Company  and/or  Nafund can elect not to provide all or any
part of the above funding  (regardless  of whether the milestones are attained).
If  milestones  are attained and either the Company  and/or Nafund elects not to
provide all or part of the above funding it would have its equity  reduced based
on a formula.

The 25%  investment  in Secure 724 L.P.  for 300,000  shares of Common Stock and
warrants to purchase 50,000 shares of Common Stock was valued at $432,500.  This
investment is accounted for utilizing the equity method and is included in OTHER
ASSETS.  The underlying equity of this investment on the date of the transaction
was  approximately  $73,000;  resulting in goodwill of  approximately  $359,500;
which will not be amortized but will be tested for impairment. For the three and
nine  months  ended June 30,  2004,  a $20,000  and  $52,000,  respectively,  an
adjustment  to the equity  investment  was recorded to reflect the Company's 25%
portion of the operating loss of Secure 724 LP.

In connection with initial capital  contribution per the partnership  agreement,
the Company advanced $18,158  (Cdn$25,000) to Secure 724 LP in May 2003 and upon
reaching milestones advanced $125,089  (Cdn$175,000) in August 2003. These notes
receivable bear interest at a rate of 4% and mature in May 2006 and August 2006,
respectively.

This  transaction was submitted to the stockholders of Synergx (as two directors
of Synergx are directors of Secure 724 LP) and approved at its Annual Meeting on
March 26, 2003.

Secure 724 LP is proceeding with the UL  certification  process and developing a
GSM/GPRS version for communication with any standard  monitoring station as well
as all functionality of the 724 interactive.

There  can be no  assurance  that  the  investment  in  Secure  724 LP  will  be
profitable.

8. OTHER EVENTS

RePort Business Solutions

On November 20, 2003, the Company's Board of Directors approved entering into a
revised agreement to organize a new Ontario limited partnership to acquire and
operate the business of RePort Business Solutions ("RePort") in partnership with
NSC Holdings Inc. ("NSCH") and Nafund Inc. ("Nafund").
<PAGE>

                      SYNERGX SYSTEMS INC. AND SUBSIDIARIES

      NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

                         NINE MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

8. OTHER EVENTS (Continued)

This  transaction  was originally  submitted to the  stockholders of Synergx for
approval  at its Annual  Meeting on March 26,  2003  because  two  directors  of
Synergx are  directors  of Nafund and one is also a director  and  principal  of
NSCH.  Management  believes  that the revised  structure and  consideration  are
within the scope of the stockholder  approval  received at the annual meeting in
March 2003.

Pursuant to the revised  agreement  (which is subject to approval by NSCH's bank
and completion of definitive documentation),  the Company, through a subsidiary,
would  acquire  from  Nafund,  25% of the  Class B  equity  units of  RePort  in
consideration of the issuance to Nafund of 150,000 shares of Common Stock.

RePort  which  is  currently  a  division  of  NSCH,  provides  software  to the
independent  international  investment  counseling,   portfolio  management  and
brokerage  community.  Located in  Toronto,  Ontario,  RePort's  software  links
external or outsourced trading,  custodian,  broker and bank systems in internal
diverse security and asset management  systems and contact  information  systems
and electronic filing and documentation  systems.  RePort will provide these and
related  back office  services to NSCH (which is an  investment  counselor/money
manager) and to other third party investment counselors,  money managers,  funds
and similar entities.

There can be no assurance however that this transaction will take place.

9. STOCK SPLIT

On July 7, 2003, the Company's Board of Directors declared a 2-for-1 stock split
of its  outstanding  common  stock.  The stock split took the form of a dividend
whereby the  Company  issued on July 25th to each  shareholder  of record at the
close of business on July 18, 2003 one additional  share for every share held on
that date.  The  financial  statements  and  footnotes  have been  retroactively
adjusted to reflect this stock split.

10. 2004 NON-QUALIFIED STOCK OPTION PLAN

At the Company's  annual meeting of  stockholders  on March 10, 2004 the Company
and its stockholders adopted a new nonqualified stock option plan ("2004 Plan").
Under the 2004  Plan,  the Board of  Directors  may grant  options  to  eligible
employees at exercise  prices not less than 100% of the fair market value of the
common shares at the time the option is granted.  The number of shares of Common
Stock  that may be issued  shall not  exceed  an  aggregate  of up to 10% of its
issued and  outstanding  shares.  Options vest at the discretion of the Board of
Directors at such time as the options are granted.  Issuances under the new 2004
Plan are to be reduced by options  outstanding under a 1997  nonqualified  stock
option plan (replaced by the new 2004 Plan).  Options outstanding under the 1997
Plan will expire from June 2004 though  December 31, 2005.  As of June 30, 2004,
there were 75,580 options  outstanding  under the 1997 Plan and none outstanding
under the 2004 Plan.
<PAGE>




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


Liquidity and Capital Resources

In October  2003,  the Company  entered into a new $3 million  revolving  credit
facility with Hudson United Bank.  (the "Credit  Facility") This credit facility
has an  interest  rate of prime plus 1/4% and expires in October  2005.  Initial
proceeds  from the new credit  facility  were used to pay off a credit  facility
with Citizens  Business Credit.  Advances under the Credit Facility are measured
against a borrowing base calculated on eligible  receivables and inventory.  The
Credit Facility is secured by all assets of the Company and all of its operating
subsidiaries.

The Credit Facility includes various covenants, which among other things, impose
limitations  on  declaring  or  paying   dividends,   acquisitions  and  capital
expenditures.  The Company is also required to maintain certain financial ratios
and  tangible  net worth  covenants.  At June 30,  2004,  the Company was not in
default with any of its financial  covenants and at such time the full amount of
the Credit Facility was available under the borrowing base calculation.  At June
30, 2004, $2,181,000 was owed under the Credit Facility.

Net cash used by operations  for the nine months ended June 30, 2004 amounted to
$1,091,890 as compared to cash used by operations of $463,552 for the comparable
prior year period.  The increase in cash being used by operations  was due to an
increase  in  working  capital  requirements  in  order to fund an  increase  in
accounts  receivable that resulted from  significantly  higher sales in 2004 and
from an increase in inventory for projects expected to be shipped after June 30,
2004.  The net cash outflow of $1,091,890  from  operations  during 2004 coupled
with  equipment  purchases  of $67,426 were funded by an increase of $925,176 in
bank  borrowing  and from  $316,200  of  proceeds  from  exercise of warrants to
purchase common stock by Genterra Inc.  (formerly  Mirtronics Inc.),  $70,000 of
proceeds from exercise of warrants to purchase  common stock by an  unaffiliated
investor  and $61,997  from  exercise of stock  options by employees to purchase
common stock.

The ratio of the Company's  current assets to current  liabilities  increased to
approximately 3.12 to 1 at June 30, 2004 compared to 2.77 to 1 at June 30, 2003.
The increase in the current  ratio is due to an  improvement  in cash flow since
June 30, 2003 due to the continued profitable  operations through June 30, 2004,
from  $448,197 of proceeds  from the  exercise of warrants and  employees  stock
options, and from a increase of $789,000 of accounts receivable in 2004. Working
capital  increased by $1.7 million to $7.5 million at June 30, 2004  compared to
$5.8 million at June 30, 2003;  while bank borrowing  increased by only $734,000
since June 30, 2003.

<PAGE>

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


Results of Operations

Revenues and Gross Profit
<TABLE>
<CAPTION>

                                              Three Months Ended       Nine Months Ended
                                                   June 30,                June 30,
                                              2004        2003         2004       2003
                                              ----        ----         ----       ----
                                                    (In thousands of dollars)
<S>                                         <C>        <C>           <C>        <C>
               Product Revenue              $ 4,808    $ 3,443       $11,987    $10,248
               Subcontract Revenue              117         65           261        508
               Service Revenue                1,156      1,150         3,425      3,328
               Total Revenue                  6,081      4,658        15,673     14,084

               Gross Profit Product           1,801      1,161         4,062      3,431
               Gross Profit Subcontract          22          5            46         93
               Gross Profit Service             344        340           978      1,008
               Total Gross Profit             2,167      1,506         5,086      4,532

               Gross Profit Product %            37%        34%           34%        33%
               Gross Profit Subcontract %        18%         8%           18%        18%
               Gross Profit Service %            30%        30%           29%        30%
</TABLE>

Revenues

The Company's  product  revenues during the three and nine months ended June 30,
2004 increased 40% and 17%  respectively  from the comparable prior year periods
due to improved economic activity in both the Company's  principal New York City
market and its  Dallas,  Texas  market.  The Company  experienced  exceptionally
strong  improvement  in  Dallas  compared  to very low 2003  levels  and  higher
revenues from New York City transit projects that resulted from product releases
from our  customers.  In the  Dallas,  Texas  market,  higher  product  revenues
resulted from certain costs reduction  initiatives  implemented  during the last
eighteen  months,  which  allowed  the  Company  to price  aggressively  in that
competitive  market.  We are continuing to quote business  aggressively  in both
that area and in the New York City metropolitan area.

Subcontract  revenue  increased  during the current three month period due to an
increase  in the number of small  jobs where the  Company  was  responsible  for
electrical  installation.  Subcontract revenue decreased during the current nine
month  period as the  Company  was  responsible  for  various  small  electrical
installations  during the 2004 period which in the aggregate  were less than two
large electrical installation projects in 2003.

Service  revenues  increased  slightly  during the current  three and nine month
periods of 2004 due to an increase in service  contracts as the Company expanded
its fire alarm  service base into the Long Island,  NY market.  The Company also
secured  several new fire alarm  customers  in the New York City  market.  These
increases  in service  contract  revenue  more than offset a decrease in call-in
service revenue.

<PAGE>


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


Gross Profit

Gross  profit on product  revenues  for the three and nine months ended June 30,
2004, increased 55% and 18%, respectively, compared to the respective prior year
periods.  The increase in absolute  gross profit is primarily  related to higher
product  sales (noted  above) and related  gross  margin.  The increase in gross
profit  percentage  during the current three and nine month periods is primarily
due to higher sales on which to absorb  overhead in both our Dallas and New York
City market areas.  The higher sales in Dallas resulted from aggressive  pricing
in order to book new business.

Gross profit related to subcontract revenues for the three months ended June 30,
2004  increased in absolute  terms as the Company was  responsible  for a larger
amount of electrical installations.  In contrast, the three months of 2003 had a
lower gross profit  percentage due to the  competitive  environment  during this
period.  However,  gross profit for the nine months ended June 30, 2004 declined
due to the reduction in subcontract  work  (electrical  installation by others).
The gross profit  percentage  during the three and nine months of 2004 were back
to normal markups on electrical installation.

Gross  profit on service  revenues  for the three months ended June 30, 2004 was
basically  unchanged as service  revenues were only up slightly  compared to the
prior year period.  Gross profit and the gross  profit  percentage  from service
revenues  during the nine months  ended June 30, 2004  decreased  in spite of an
increase in service revenues. The gross profit decline was due to an increase in
technicians  to  support  higher  service  revenues,   salary   increases,   and
technicians  moving up to higher paying  categories.  These cost increases could
not be fully absorbed by price increases due to competitive market pricing.

Income Before Tax

The  increase in income  before  income  taxes  during the three and nine months
ended June 30,  2004 of 563 % and 57%,  respectively,  is  primarily  due to the
higher gross profit margins  resulting from increased  product sales in New York
and Dallas. In addition,  selling, general and administrative expenses increased
(15% and 8%  during  the three and nine  months  of 2004,  respectively)  due to
higher insurance costs in 2004 and from additional management and sales staff to
support product expansion  directed at increased sales levels.  Interest expense
increased  during 2004 due to higher  borrowing  levels.  For the three and nine
month  periods  of 2004 the  Company  recorded a loss of  $20,000  and  $52,000,
respectively, on its equity in the operating loss of Secure 724 LP.

Tax Provision

The Company's current income tax provision  represents federal,  state and local
income taxes. Deferred taxes represent the net change in deferred tax assets and
non current  deferred tax liability as it related to certain timing  differences
of book and tax deductions.

<PAGE>

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


Order Position

The Company's order position,  excluding  service,  at June 30, 2004 amounted to
$15,155,000 as compared to $16,500,000 at September 30, 2003 and  $14,800,000 at
June 30, 2003.  These strong levels of order position  reflects recent large new
orders  received for several subway  complexes  which will be  deliverable  over
several  years as the projects are released and reflects  recent  increased  new
orders in our Dallas, Texas Market area.. In addition, the backlog includes $2.1
million  of orders for  communication  and  announcement  systems  from  several
transit car manufacturers, that will be shippable over the next 24 month period.
While  quotation  activity is brisk,  there is no assurance  when orders will be
received and whether the order position will increase.  Due to the fact that the
Company's  products  are sold  and  installed  as part of  larger  mass  transit
construction  projects,  there is  typically a delay  between the booking of the
contract  and its  revenue  realization.  The order  position  includes  and the
Company   continues  to  bid  on  projects   that  might   include   significant
subcontractor labor (electrical  installation  performed by others). The Company
expects to be active in seeking  orders  where the Company  would act as a prime
contractor  and  be  responsible  for  management  of the  project  as  well  as
electrical installation.

<PAGE>


                         Item 3. Controls and Procedures

Evaluation  of  disclosure  controls and  procedures.  At the period end of this
Quarterly  Report  on Form  10-QSB,  the  Company's  management,  including  the
Company's Chief  Executive  Officer and Chief  Financial  Officer  evaluated the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures.  Based on that evaluation, the Company's Chief Executive Officer
and Chief Financial Officer have concluded, as of the end of the quarter covered
by this report, that:

The Company's  disclosure  controls and  procedures  are designed to ensure that
information  required to be  disclosed by the Company in the reports it files or
submits  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized and reported within the time periods specified.

That Company's  disclosure  controls and procedures are effective to ensure that
such  information is accumulated and  communicated to the Company's  management,
and made known to the  Company's  Chief  Executive  Officer and Chief  Financial
Officer, to allow timely decision regarding the required disclosure.

There have been no changes in the Company's  internal  controls  over  financial
report that have  materially  affected,  or is  reasonably  likely to materially
affect the Company's  internal  controls  over  financial  reporting  during the
period covered by this Quarterly Report.


<PAGE>

                           Part II - OTHER INFORMATION

Item 1.  Legal Proceedings.

     Not Applicable

Item 2.  Changes in Securities.

     Genterra  Inc  (formerly  Mirtronics  Inc) the largest  stockholder  of the
Company had  outstanding  warrants to purchase  620,000  shares of the Company's
Common Stock,  which were issued in 1998, and were exercisable at any time until
December 31, 2003 at an exercise price of $.51 per share. Genterra Inc.exercised
these warrants in December 2003 for a total consideration of $316,200.

     On June 15, 2004, an unaffiliated  investor  exercised warrants to purchase
100,000  shares of the Company's  Common Stock at an exercise  price of $70,000.
These  warrants were part of a private  placement of 340,000 units sold for $.70
per Unit.  Each unit  consists  of one share of Common  Stock and one warrant to
purchase an  additional  share of Common Stock at $.70 per share for a period of
24  months  from  September  30,  2002.  The  remaining   240,000  warrants  are
outstanding as of June 30, 2004.

     During the nine months  ending June 30,  2004,  employees  exercised  stock
options to purchase 115,718 shares of Common Stock for a total  consideration of
$61,997.

Item 3.  Defaults Upon Senior Securities.

     Not applicable

Item 4.  Submission of Matters to a Vote of Security Holders.

     None

Item 5.   Other Information.

Item 6.  Exhibits and Reports on form 8-K.

(a) Exhibits

31.1 Certification  of Daniel S. Tamkin  pursuant to 18 U.S.C.  Section 1350, as
     adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification  of John A. Poserina  pursuant to 18 U.S.C.  Section 1350, as
     adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certifications of Daniel S. Tamkin and John A. Poserina pursuant to Section
     906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

     None

Other

     The information in Item 2 and Item 6 regarding  shares of Common Stock have
been  adjusted  for a 2 for 1 stock split that took the form of a dividend  that
was distributed on July 25, 2003.

<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                            SYNERGX SYSTEMS INC
                                            (Registrant)


                                            /s/ John A. Poserina
                                            ------------------------------
                                            John A. Poserina,
                                            Chief Financial Officer
                                            (Principal Accounting and
                                            Financial Officer), Secretary
                                            And Director
Date:  August 4, 2004