SOFTWARE RECALL TESTING MAKER'S REBOUND ABILITY.

Byline: Dawn Yoshitake Daily News Staff Writer

Syncronys Softcorp, once a high-flying maker of top-selling memory software SoftRAM, is running low on cash as it struggles to revamp its recalled product and get it back on store shelves. But can its top executives pull it off?

"We feel we're on track and have sufficient confidence that we can release SoftRAM on the timetable we announced," said Daniel Taylor, chairman.

"Our approach is like a Broadway play. . . . Critics will either love it or pan it. But we won't be ignored."

But a number of hurdles stand in the way as the Culver City company gears up for opening night.

Virtually no cash has come into the company since mid-December, when it recalled SoftRAM, its main product.

The company had touted SoftRAM as a cheap solution to memory problems when using the RAM-hungry Windows 95 operating system. SoftRAM supposedly could double a computer's random access memory, which is used to operate programs, at a fraction of the cost of buying additional RAM chips for several hundred dollars.

That claim and being the only Windows 95 memory manager on the market at the time made SoftRAM the No. 1 selling software title in PC Magazine for several weeks last fall. But the product didn't work and Syncronys initiated a recall in mid-December.

For now, sufficient funds to cover the company's needs are expected to last another two to four months, unless new products are shipped or new cash-raising plans found.

Syncronys is also facing five customer class-action lawsuits claiming false and misleading advertising plus one class-action shareholder suit claiming that the company misrepresented its products to inflate the stock price.

Competitors are preparing their own Windows 95 memory management software programs for spring, eliminating the clear field that Syncronys enjoyed when it launched its Windows 95 version in August.

And questions remain whether anyone will buy future Syncronys products in light of the controversy that developed as customers, industry product testers and, eventually, the company said SoftRAM did not work.

Last week, Syncronys also reported a second-quarter net loss of $2.9 million for the period ending Dec. 31, compared to a profit of $16,876 last year. Sales increased nearly ninefold to $2.8 million, compared with a year earlier.

Its stock price closed Friday at 3-1/2, well off a 52-week high of 32.

Syncronys Chief Executive Rainer Poertner knows about troubled companies.

He and the vice president of technology, Wendell Brown, have a bankruptcy under their belt from when they ran computer component hardware developer Hydra Systems Inc.

The company filed for a Chapter 7 bankruptcy in 1993 when it was determined that it could not remain viable, said Poertner, who added that he was hired to evaluate the company and close it down.

The bankruptcy and Brown's affiliation with Hydra, however, were not mentioned in Syncronys' prospectus given to shareholders. Poertner said he could not explain why the information was left out.

Despite the tight cash flow and other challenges the company faces, Poertner and Taylor remain upbeat when discussing the future.

"We're not in a survival mode, we're in a planning mode," Taylor said.

Syncronys expects to roll out several new products, such as SoftRAM for Macintosh, Windows NT and IBM's OS2 within the next four months, in addition to a network accelerator called NETSpeed.

Syncronys also anticipates entering a couple of joint ventures within a few months to exclusively develop and market new utility programs.

"Research and development on these products are almost concluded, so they could be ready for us to market and package by the third quarter," Taylor said.

The turnaround time between a sale and payment is usually 60 to 90 days. That means products shipped by April or May will bring in revenue around June - the outer window before the company's working capital becomes inadequate.

And rather than enter expensive litigation that would further erode its funds, Syncronys is currently negotiating settlements with parties in the lawsuits, Poertner said.

A sale of the company's wholly owned subsidiary, Autoship Systems Corp., may soon be reached and would reap a quick $195,000 profit.

Syncronys' board will vote Feb. 29 on selling the naval ship computer design program maker for $440,000. And the prospective buyer is the same Canadian company that originally sold Autoship to Syncronys in April for a mere $245,000.

Despite his previous experience with a bankrupt company, Poertner said it's not in the works for Syncronys.

"Absolutely not. There's no reason to," he said. "We have a viable product."

CAPTION(S):

PHOTO[ordinal indicator, masculine]CHART

Box SYNCRONYS' UPS AND DOWNS Chart Syncronys Shares Bradford Mar/Daily News Photo (Color) Syncronys Softcorp executives Rainer Poertner, left, and Daniel Taylor say things are running smoothly to get their fixed product back on the shelves. Bob Halvorsen/Daily News