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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2002
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From_______to________
Commission File Number: 0-16454
CIMETRIX INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada 87-0439107
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6979 South High Tech Drive, Salt Lake City, Utah 84047-3757
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (801) 256-6500
------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the registrant's common stock as
of August 14, 2002: Common stock, par value $.0001 - 24,054,093
CIMETRIX INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2002
INDEX
PART I Financial Information
Item 1. Financial Statements
a) Consolidated Condensed Statements of Operations...........................3
b) Consolidated Condensed Balance Sheets.....................................4
c) Consolidated Condensed Statements of Cash Flows...........................5
d) Notes to Consolidated Condensed Financial Statements......................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................11
Item 3. Quantitative and Qualitative Disclosures About Market Risk...........21
PART II Other Information
Item 1. Legal Proceedings....................................................21
Item 2. Changes in Securities................................................22
Item 3. Defaults Upon Senior Securities......................................22
Item 4. Submission of Matters to a Vote of Security Holders..................23
Item 5. Other Information....................................................23
Item 6. Exhibits and Reports on Form 8-K.....................................24
Signatures....................................................................26
-2-
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
CIMETRIX INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share and share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- -------------------------
2002 2001 2002 2001
----- ---- ---- ----
NET SALES $ 912 $ 970 $ 1,431 $ 2,507
---------- ---------- ----------- -----------
OPERATING EXPENSES
Cost of sales 203 242 307 374
Selling, marketing and customer support 409 466 857 891
Research and development 362 566 760 1,014
General and administrative 564 496 1,050 917
---------- ---------- ----------- -----------
Total operating expenses 1,538 1,770 2,974 3,196
---------- ---------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS (626) (800) (1,543) (689)
----------- ----------- ------------ ------------
OTHER INCOME (EXPENSES)
Interest income 21 128 36 160
Interest expense (69) (67) (137) (134)
Other Gain/(Loss) (49) (5) (49) (5)
----------- ----------- ------------ ------------
Total other income (expense) (97) 56 (150) 22
----------- ---------- ------------ -----------
INCOME (LOSS) BEFORE INCOME TAXES (723) (744) (1,693) (667)
CURRENT INCOME TAX EXPENSE
(BENEFIT) - - - -
NET INCOME (LOSS) $ (723) $ (744) $ (1,693) $ (667)
=========== =========== ============ ============
BASIC INCOME (LOSS) PER
COMMON SHARE $ (.03) $ (.03) $ (.07) $ (.03)
===== ===== ===== =====
DILUTED INCOME (LOSS) PER
COMMON SHARE $ (.03) $ (.03) $ (.07) $ (.03)
===== ===== ===== =====
WEIGHTED AVERAGE SHARES
OUTSTANDING, BASIC 24,026,000 24,026,000 24,026,000 24,159,000
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING, DILUTED 24,026,000 24,026,000 24,026,000 24,159,000
========== ========== ========== ==========
See notes to consolidated condensed financial statements
-3-
CIMETRIX INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except share amounts)
ASSETS
June 30, December 31,
2002 2001
------------ -----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 594 $ 743
Marketable Securities 1,382 1,785
Accounts receivable, net 782 1,712
Inventories 187 156
Prepaid expenses and other current assets 34 83
------------ ------------
Total current assets 2,979 4,479
Property and equipment, net 157 230
Technology, net 1,988 2,120
Other assets 64 25
------------ ------------
$ 5,188 $ 6,854
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 301 $ 262
Accrued expenses 268 504
Deferred revenue 351 181
Current portion, senior notes 2,224 2,224
------------ ------------
Total current liabilities 3,144 3,171
LONG TERM DEBT, net of current portion 442 439
------------ ------------
Total Liabilities 3,586 3,610
REEDEMABLE COMMON STOCK 224 224
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value: 100,000,000 shares
Authorized, 24,025,968 and 24,457,690 shares issued
and outstanding, respectively 2 2
Additional paid-in capital 27,977 27,926
Treasury stock, at cost (800) (800)
Accumulated deficit (25,801) (24,108)
------------ ------------
Net Stockholders' Equity 1,378 3,020
------------ ------------
$ 5,188 $ 6,854
============ ============
See notes to consolidated condensed financial statements
-4-
CIMETRIX INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands, except share amounts)
(Unaudited)
Six Months Ended
June 30,
2002 2001
---- ----
Cash Flows from Operating Activities:
Net income (loss) $ (1,693) $ (667)
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities:
Amortization and depreciation 217 374
Increase in receivables allowance account 166 100
Common stock issued for services 8 --
Options issued for services 43 --
Loss on sale of marketable securities 49 --
Bond discount related to warrants 3 --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 764 (188)
(Increase) decrease in inventory (31) (20)
(Increase) decrease in prepaid expenses 49 6
Increase (decrease) in accounts payable 39 66
Increase (decrease) in accrued expenses (236) (128)
Increase (decrease) in other assets (39) 20
Increase (decrease) in customer deposits 170 171
------------ -------------
Net cash flow (used in) operating activities (491) (266)
------------- -------------
Cash Flows from Investing Activities:
Purchase of property and equipment, net of retirements (12) (39)
Proceeds from sale of marketable securities 2,159 --
Purchase of marketable securities (1,805) --
Purchase of technology -- (215)
Payments received on note receivable -- 416
------------ -------------
Net cash flow (used in)
provided by investing activities 342 162
------------ -------------
Cash Flows from Financing Activities:
Purchase of treasury stock -- (49)
Net cash flow (used in) financing activities -- (49)
------------ -------------
Net (Decrease) Increase in Cash and Cash Equivalents (149) (153)
Cash and Cash Equivalents at the Beginning of Period 743 3,525
------------ -------------
Cash and Cash Equivalents at the End of Period $ 594 $ 3,372
============ =============
See notes to consolidated condensed financial statements
-5-
CIMETRIX INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands, except share amounts)
(Unaudited)
(CONTINUED)
Six Months Ended
June 30,
2002 2001
---- ----
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 134 $ 134
Income taxes -- 15
Supplemental Schedule of Non-cash Investing and Financing
Activities:
During the three months ended March 31, 2001, the -- 749
Company received back 400,000 shares of its common
stock that had been issued to acquire technology. This resulted in a
decrease of technology of $749 and a corresponding decrease in
stockholders' equity.
The Company acquired equipment in satisfaction of $ -- $ 76
accounts receivable.
See notes to consolidated condensed financial statements
-6-
CIMETRIX INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying unaudited condensed financial
statements of Cimetrix Incorporated have been prepared in accordance with
the Securities and Exchange Commission's instructions to Form 10-Q and,
therefore, omit or condense footnotes and certain other information
normally included in financial statements prepared in accordance with
generally accepted accounting principles. The accounting policies followed
for quarterly financial reporting conform with generally accepted
accounting policies disclosed in Note 1 to the Notes to Financial
Statements included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001. In the opinion of management, all adjustments
of a normal recurring nature that are necessary for a fair presentation of
the financial information for the interim periods reported have been made.
The results of operations for the three month period ended June 30, 2002
are not necessarily indicative of the results that can be expected for the
entire year ending December 31, 2002. The unaudited condensed financial
statements should be read in conjunction with the financial statements and
the notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2001.
NOTE 2 - GOING CONCERN
The accompanying consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The
Company has significant liabilities in the form of senior notes payable
that will come due in September 2002, (See Note 4 - Senior Notes, below).
Payment of the senior notes would substantially decrease the amount of
working capital available to fund ongoing operations. Historically, the
Company has not demonstrated the ability to generate sufficient cash flows
from operations to satisfy these liabilities and sustain operations. These
factors may indicate the Company's inability to continue as a going
concern.
The Company's continuation as a going concern is dependent on its
ability to generate sufficient income and cash flow to meet its obligations
on a timely basis and to obtain additional financing as may be required.
The Company is actively seeking options to obtain additional capital and
financing in the form of a new offering of Senior Notes (See Note 4 -
Senior Notes, below). There is no assurance the Company will be successful
in its efforts.
NOTE 3 - STOCK OPTIONS AND WARRANTS
As of June 30, 2002, the Company had a significant number of
derivative securities outstanding, in the form of stock options and
warrants representing a potential total of 4,833,750 shares of common
stock, which are summarized in the following table with detail of each in
the subsequent tables.
Strike
Description Price Quantity
----------------------------------------------------------------------
1998 Stock Option Plan $1.00-3.50 3,339,000
Directors Stock Option Plan $1.00-3.50 554,000
Warrants $1.00-2.50 940,750
------------
Total Options and Warrants 4,833,750
-7-
1998 Incentive Stock Option Plan
As of June 30, 2002, there were issued and outstanding to the
Company's employees, options for the purchase of 3,339,000 shares of the
Company's common stock, under the Company's 1998 Incentive Stock Option
Plan as amended. The following table summarizes the quantity and exercise
prices of the options.
Option
Price Quantity
----- --------
$1.00 2,037,500
$2.50 891,500
$3.00 360,000
$3.50 50,000
------
Total Options 3,339,000
Approximately 452,000 of the shares underlying these outstanding
options are registered for resale, pursuant to a Form S-3 Registration
Statement, which became effective December 9, 1998. A total of 4,000,000
shares of common stock have been reserved for issuance under the plan. The
existing options will begin to expire in December 2002, and continue to
expire through November 2006.
Directors Stock Option Plan
As of June 30, 2002, there were issued and outstanding options for the
purchase of 554,000 shares of the Company's common stock, under the
Company's Director Stock Option Plan. The following table summarizes the
quantity and exercise prices of the options.
Option
Price Quantity
------ --------
$1.00 200,000
$2.50 258,000
$3.50 96,000
------
Total Options 554,000
Approximately 162,000 of these options are registered for resale,
pursuant to the Form S-3 Registration Statement discussed earlier in this
note. In May 2002, 219,000 of the above options, which are held by former
Board of Directors of the Company, were extended for an additional five
years beyond their original expiration dates. The directors and former
directors options begin to expire in January 2003, and continue to expire
through January 2012.
-8-
Warrants
As of June 30, 2002, there were issued and outstanding warrants for
the purchase of 940,750 shares of the Company's common stock, that were
issued to holders of the Company's 10% Senior Notes due September 30, 2002,
and September 2004, respectively, which are discussed below in Note 4 -
Senior Notes. The following table summarizes the quantity and exercise
prices of the warrants.
Warrant Price Quantity Potential Shares
---------------------------------------------------------
$1.00 457 114,250
$2.50 3,306 826,500
----- -------
Totals 3,763 940,750
The $2.50 warrants were issued November 1997 to purchasers of the
Company's 10% Senior Notes due September 30, 2002. Any unexercised $2.50
warrants expire October 1, 2002. The $1.00 warrants were issued December
2001, in connection with the Company's 10% Senior Notes due September 30,
2004, discussed below in Note 4 - Senior Notes.The $1.00 warrants are
exercisable anytime after November 1, 2001 and on or before September 30,
2004. To date, none of the warrants have been exercised. The Company
intends to use its best efforts to prepare and file a Registration
Statement with the Securities and Exchange Commission to register the
shares issuable pursuant to the exercise of the $1.00 warrants.
NOTE 4 - SENIOR NOTES
Notes due September 30, 2002
In November 1997, the Company issued approximately $3.3 million of 10%
Senior Notes due September 30, 2002. For no additional consideration, each
purchaser also received one common stock purchase warrant for each $1,000
principal amount of Senior Notes purchased. Each warrant entitles the
holder to purchase 250 shares of the Company's common stock for $2.50 per
share. To date, none of the warrants have been exercised. Interest on the
Senior Notes has been paid on April 1 and October 1 of each year since
issuance. Approximately $600,000 of the Senior Notes were retired June
1998 in exchange for common stock of the Company, leaving an outstanding
principal balance of $2,681,000, which is due September 30, 2002.
As of June 30, 2002, there were 3,306 warrants outstanding that were
issued with the 10% Senior Notes due September 30, 2002, held by
approximately 50 warrant holders. The number of potential shares
represented by these outstanding warrants is 826,500, or 250 shares for
each warrant. The exercise price for the warrants is $2.50 per share, with
any unexercised warrants expiring October 1, 2002. The underlying shares
from the outstanding warrants were registered for resale pursuant to the
Form S-3 Registration Statement discussed in Note 3 - Stock Options and
Warrants.
-9-
Notes due September 30, 2004
In an effort to preserve its working capital, on October 8, 2001, the
Company made an offer to its 10% Senior Noteholders, to exchange their 10%
Senior Notes due September 30 2002 for 10% Senior Notes due September 30,
2004. These notes were not registered with the Securities and Exchange
Commission nor with any state securities commission. The offer of
replacement notes was made in reliance upon statutory exemptions available
under the Securities Act of 1933 and under applicable state securities
statutes.
Any Noteholder exchanging Senior Notes due September 30, 2002 for
Senior Notes due September 30, 2004 was also to receive at no additional
consideration one common stock purchase warrant for each $1,000 principal
amount of Senior Notes due 2002 that was exchanged. Each warrant entitles
the holder to purchase 250 shares of the Company's common stock for $1.00
per share.
The offer to exchange the Senior Notes due September 30, 2002 was
extended until April 30, 2002, and has now expired. As of that date, only
$457,000 of these Senior Notes had been exchanged for Senior Notes due
September 30, 2004, leaving a principal balance of $2,224,000 due September
30, 2002. Of the $457,000 of Senior Notes that were exchanged,
approximately $18,000 of the face value was attributable to the value of
the warrants issued. Therefore, the face value of these Senior Notes on the
Company's balance sheet is $442,000. This $18,000 is being amortized as
additional interest expense over the life of the Senior Notes, resulting in
approximately an additional $600 of interest expense monthly.
The 457 warrants that were issued in connection with the Senior Notes
due September 30, 2004, represent 114,250 potential shares, or 250 shares
for each warrant. The exercise price for these warrants is $1.00 per share,
with any unexercised warrants expiring October 1, 2004. These warrants are
exercisable anytime after November 1, 2001 and on or before September 30,
2004 as a whole, in part, or in increments.
Notes due September 30, 2005
Because a sufficient number of Noteholders did not accept the
Company's offer to exchange their 10% Senior Notes due September 30, 2002
for 10% Senior Notes due September 30, 2004, the Company has undertaken a
new Senior Note offering. On June 26, 2002, the Company issued a
confidential Private Placement Memorandum for an offering of an aggregate
principal amount of a minimum of $500,000 and a maximum of $5,000,000 in
unsecured 12% Senior Notes Due September 30, 2005, at 100% of face value,
coupled with warrants to purchase 500 shares of the Company's common stock
for each $1,000 principal amount of Senior Notes purchased, with the
warrants expiring on September 30, 2005. The securities are being offered
to existing noteholders in exchange for their current notes, and to new
investors. The offering is being made directly by the Company on a best
efforts basis and is not being underwritten. The new Senior Note offering
will close no later than August 31, 2002, unless extended by the Company,
without notice to investors.
These notes are not being registered with the Securities and Exchange
Commission nor with any state securities commission. The Company is relying
upon an exemption from registration available under Regulation D, Rule 506,
promulgated under the Securities Act of 1933 and also upon statutory
exemptions available under the Securities Act of 1933 and under applicable
state securities laws.
The proceeds of the offering will first be used to retire the Senior
Notes Due September 30, 2002 and 2004. Thereafter, proceeds, if any, will
be used for working capital and other general corporate purposes.
-10-
NOTE 5 - EARNINGS PER SHARE
A reconciliation of the shares used in the computation of the Company's
basic and diluted earnings per common shares is as follows (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
---- ---- ---- ----
Weighted average common shares
Outstanding 24,026 24,026 24,026 24,159
Dilutive effect of :
Stock options -- -- -- --
Warrants -- -- -- --
------ ------ ------ ------
Weighted average common shares
outstanding, assuming dilution 24,026 24,026 24,026 24,159
------ ------ ------ ------
Weighted average common shares outstanding, assuming dilution,
includes the incremental shares that would be issued upon the assumed
exercise of stock options and warrants (see Note 3 - Stock Options and
Warrants and Note 4 - Senior Notes). During the three and six months ended
June 30, 2002, stock options and warrants to exercise 4,833,750 shares were
excluded from the calculation of diluted earnings per share because they
were antidilutive. These options and warrants could be dilutive in the
future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- ------------------------------------------------------------------------
Following is a brief discussion and explanation of significant financial
data, which is presented to help the reader better understand the results of the
Company's financial performance for the second quarter of 2002. The information
includes discussions of sales, expenses, capital resources and other significant
items. Generally the information is presented in a two-year comparison format
using the second quarter data of 2002 and 2001.
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Company's Condensed Financial
Statements and Notes thereto included elsewhere in this Quarterly Report. The
ensuing discussion and analysis contains both statements of historical fact and
forward-looking statements. Forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, generally are identified by the
words "expects," "believes" and "anticipates" or words of similar import.
Examples of forward-looking statements include: (a) projections regarding sales,
revenue, liquidity, capital expenditures and other financial items; (b)
statements of the plans, beliefs and objectives of the Company or its
management; (c) statements of future economic performance; and (d) assumptions
underlying statements regarding the Company or its business. Forward-looking
statements are subject to certain factors and uncertainties that could cause
actual results to differ materially from the forward-looking statements,
including, but not limited to, those factors and uncertainties described below
under "Liquidity and Capital Resources" and "Factors Affecting Future Results."
-11-
Overview
The Company is the developer of the world's first open architecture,
standards-based, personal computer (PC) software for controlling motion-oriented
equipment that operates on the factory floor. The Company introduced its first
motion control products (CODE) in 1989, and has developed considerable expertise
through working with demanding original equipment manufacturer (OEM) customers.
In 2000, the Company introduced two new product families using the latest
in software technologies. Both products complement the Company's CODE motion
control family of products. CIMConnect is a next generation design for enabling
production equipment in the electronics industries to communicate data to the
factory's host computer using the SECS/GEM SEMI (Semiconductor Equipment and
Materials International) standard. CIM300 is a family of seven software products
that reduces the time required to connect new 300mm semiconductor tools to each
other and host computers into a factory by using the new SEMI 300mm standards.
Customers find CIM300 to be a technically stronger solution than competitive
products.
On October 23, 2001, Cimetrix introduced CODE 6 with Core Motion after six
months of field beta testing at customer sites. A press tour to major industry
publications was launched resulting in many online and print copies of the new
product. CODE 6 with Core Motion is the result of 18 months of research and
development effort resulting in new technology to move motion control from
proprietary motion boards onto the PC. This can result in up to a 50% savings in
hardware costs for our OEM customers and positions us for the evolution to
network based drives. This release also contains many new features such as
conveyor tracking and enhanced calibration routines.
Significant Accounting Policies
Management's discussion and analysis of the Company's financial
condition and results are based upon financial statements, which have been
prepared in accordance with generally accepted accounting principles (GAAP). The
following accounting policies significantly affect the way the financial
statements are prepared.
Revenue Recognition
The Company derives revenues from three primary sources: 1) sales of
software, 2) sales of application engineering services and 3) sales of technical
support services. Software sales are derived from the sale of the Company's
off-the-shelf software packages in the machine control and communications
product lines. Machine control products include items such as CODE 6.0(TM),
CIMControl(TM), and CIMulation(TM). Communications products include items such
as CIM300(TM), GEM Host Manager(TM) and CIMConnect(TM). Application engineering
sales are derived from the sale of services to design, develop and implement
custom software applications. Support sales are fixed annual contracts that
provide access to technical support personnel for help in the operation or
de-bugging of our software products.
Before the Company will recognize any revenue, the following criteria
must be met:
1) Evidence of a financial arrangement or agreement must exist between the
Company and its customer. Purchase orders and signed OEM contracts are two
examples of items accepted by the Company to meet this criteria.
-12-
2) Delivery of the products or services must have occurred. We treat either
physical or electronic delivery as having met this criteria.
3) The price of the products or services is fixed and measurable. It is the
policy of the Company to provide our customers a 30-day right to return.
However, because the amount of returns has been insignificant, the Company
recognizes revenue immediately upon the sale. If the number of returns were
to increase substantially, the Company would establish a reserve based on a
percentage of sales to account for any such returns.
4) Collectibility of the sale is reasonably assured, receipt is probable.
Collectibility of a sale is determined on customer by customer basis.
Typically the Company sells to large corporations which have a demonstrated
ability to pay. If it is determined that a customer may not have the
ability to pay, revenue is deferred until the payment is collected.
If a sale involves a bundled package of software, support and services at a
discounted price, revenue is allocated to each element based on the respective
list price of each. Assuming all of the above criteria have been met, revenue
from the software portion of the package is recognized immediately. Revenue from
material support contracts is recognized ratably over the term of the support
contract, which is generally 12 months. Revenue from services is recognized upon
delivery of major project milestones. Standard terms for sales are payments are
due net 30 (net 60 for foreign customers). On occasion extended payment terms
will be offered. Any revenues from sales with terms greater than 12 months are
recognized as payments become due.
Allowance for Doubtful Accounts
The Company maintains a reserve for doubtful accounts, which is for
estimated losses resulting from uncollectible accounts receivable. Generally the
Company records an allowance for doubtful accounts based on a percentage of
overall sales. In addition if collectibility becomes doubtful on any receivable,
a reserve is set up for the entire amount.
-13-
Statement of Operations Summary
The following table sets forth the percentage of costs and expenses to net
revenues derived from the Company's Condensed Statements of Operations for the
three and six months ended, June 30, 2002 and 2001, respectively:
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2002 2001 2002 2001
---- ---- ---- ----
NET SALES 100% 100% 100% 100%
---- ---- ---- ----
OPERATING EXPENSES
Cost of sales 22 25 21 15
Selling, marketing and customer support 45 48 60 36
Research and development 40 58 53 40
General and administrative 62 51 73 37
---------- --------- --------- --------
Total operating expenses 169 182 208 128
---------- --------- --------- --------
INCOME (LOSS) FROM OPERATIONS (69) (82) (108) (28)
Interest income 2 13 3 6
Interest expense (8) (7) (10) (5)
Other gain/loss (5) (1) (3) (1)
----------- ---------- ---------- --------
NET INCOME (LOSS) (79)% (77)% (118)% (27)%
----------- ---------- ---------- ---------
Results of Operations
Three and Six Months Ended June 30, 2002 Compared to the Three and Six Months
Ended June 30, 2001
Net Sales
Net sales decreased by $58,000, or 6%, to $912,000, for the three months
ended June 30, 2002, from $970,000, for the three months ended June 30, 2001.
Net sales for the three months ended June 30, 2002, consisted of sales of
software (57%), engineering services (25%), and support and training (18%). Net
sales for the same period in 2001 consisted of sales of software (71%),
engineering services (17%), and support and training (12%).
The decrease in second quarter sales was primarily the result of a drop in
software revenues. Sales to the Company's OEM customers in the robot, SMT and
semiconductor markets continue to be negatively impacted by the current economic
slowdown. However, during the period ended June 30, 2002, the Company entered
into a contract with a significant new OEM customer, bringing its total of OEM
contracts to 21.
-14-
Net sales decreased by $1,076,000 or 43%, to $1,431,000 for the six months
ended June 30, 2002, from $2,507,000 for the six months ended June 30, 2001.
Net sales for the six months ended June 30, 2002, consisted of sales of software
(52%), engineering services (26%), and support and training (22%). Net sales for
the same period in 2001 consisted of sales of software (77%), engineering
services (15%), and support and training (8%).
The decrease in year-to-date sales was primarily the result of a drop in
software revenues. Sales have been significantly below forecast since the second
quarter of 2001, due to a slowdown in the electronics industry. The electronics
industry has been very cyclical in nature with periods of double-digit growth
followed by periods of little or no growth. At the present time, orders for new
equipment in the robot, SMT and semiconductor markets, which would include the
Company's software products, remain significantly below prior periods.
Competitive pressures may also be contributing to the drop in revenues, but is
not quantifiable.
While the Company cannot predict market conditions for subsequent quarters,
it continues to market its products aggressively in order to broaden its
customer base. Management hopes that the electronics industry is starting to
recover and that orders for new equipment increase.
Major Customers
Sales to two non-affiliated customers accounted for 10% and 14% of the
Company's revenues for the three months ended June 30, 2002, respectively. Sales
to two different non-affiliated customers accounted for 14% and 21%,
respectively, of the Company's revenues for the three months ended June 30,
2001. No other single non-affiliated customer accounted for 10% or more of the
Company's revenues for the three months ended June 30, 2002 and 2001,
respectively.
Sales to one non-affiliated customer accounted for 11% of the Company's
revenues for the six months ended June 30, 2002, which is the same customer that
accounted for 14% of the Company's revenues for the three months ended June 30,
2002. Sales to three non-affiliated customers accounted for 10%, 10% and 11% of
the Company's revenues for the six months ended June 30 2001, respectively. No
other single non-affiliated customer accounted for 10% or more of the Company's
revenues for the six months ended June 30, 2002 and 2001, respectively.
Sales to Aries, Inc., the Company's Japanese affiliate, accounted for 13%
and 19% of the Company's revenues for the three months ended June 30, 2002 and
2001, respectively. Sales to Aries accounted for 12% and 16% of the Company's
revenues for the six months ended June 30, 2002 and 2001, respectively.
Export sales were approximately 39% and 45% of the Company's revenues for
the three months ended June 30, 2002 and 2001, respectively. Export sales were
approximately 38% and 48% for the six months ended June 30, 2002 and 2001,
respectively. All export sales were made in US dollars.
-15-
Export sales to countries that exceeded 10 percent of net sales were as
follows:
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
------------------ --------------------
Japan 24% 24% 21% 20%
Germany * * * 18%
------------------------------
* Less than 10%
Cost of Sales
Cost of sales decreased by $39,000, or 16%, to $203,000 for the three
months ended June 30, 2002, from $242,000 for the comparable period in 2001.
Cost of sales decreased by $67,000, or 18%, to $307,000 for the six months ended
June 30, 2002, from $374,000 for the comparable period in 2001. These decreases
were attributable in part to a reduction in the sale of outside engineering
services due to an overall slowdown in sales, and were within normal operating
fluctuations. While the Company's focus is on the sale of software products, it
does provide application and integration services to its customers that want to
purchase a complete turnkey system. These services are performed both internally
and through resellers and distributors. These decreases were also attributable
to the fact that the Company began classifying reserves taken for bad debt as a
General and Administrative expense in 2002, whereas in 2001 they were classified
as a Cost of Sales expense.
Selling, Marketing and Customer Support
Selling, marketing and customer support costs decreased by $57,000, or 12%,
to $409,000 for the three months ended June 30, 2002, from $466,000 for the
comparable period in 2001. The same expenses decreased by $34,000, or 4%, to
$857,000 for the six months ended June 30, 2002, from $891,000 for the
comparable period in 2001. These decreases were due to the consolidation of
operations from the Company's semiconductor division, which was located in Los
Gatos, California into its Salt Lake City, Utah headquarters in March 2002. The
Company continues to invest in general corporate marketing and outside public
relations services in an effort to expand the Company's customer base.
Selling, marketing and customer support expenses reflect the direct payroll
and related travel expenses of the Company's sales, marketing and customer
support staff, the development of product brochures and marketing material,
press releases, and the costs related to the Company's representation at
industry trade shows.
Research and Development
Research and development expenses decreased by $205,000, or 36%, to
$361,000 for the three months ended June 30, 2002, from $566,000 for the
comparable period in 2001. These same expenses also decreased by $254,000, or
25%, to $760,000 for the six months ended June 30, 2002, from $1,014,000 for the
comparable period in 2001. This decrease was due to a reduction in the number of
software development personnel. As the Company's products have matured, emphasis
has moved from development and software enhancements to providing services and
support to customers as they prepare for and begin to ship the Company's
products on their equipment.
-16-
While shifting its emphasis, significant investment in research and
development is still required for new product development and maintenance to
existing products. The Company expects to incur research and development
expenses of approximately $1,400,000 during 2002, compared to approximately
$1,900,000 during 2001. Research and development expenses include only direct
costs for wages, benefits, materials and education of technical personnel. All
indirect costs such as rents, utilities, depreciation and amortization are
reflected in general and administrative costs.
General and Administrative
General and administrative expenses increased by $68,000, or 14%, to
$564,000 for the three months ended June 30, 2002, from $496,000 for the
comparable period in 2001. These same expenses also increased by $133,000, or
15%, to $1,050,000 for the six months ended June 30, 2002, from $917,000 for the
comparable period in 2001. This increase was due in part to additional reserves
taken for bad debt, which beginning in 2002, were classified as General and
Administrative Expenses rather than as a Cost of Sales expense. Such reserves
have been accrued due to the slow economy. This increase was also due in part to
a one-time expense of $43,190 for the extension of the expiration dates of
219,000 stock options that are held by former Board of Directors of the Company
(See Note 3 - Stock Options and Warrants, to the Consolidated Condensed
Financial Statements above). All other general and administrative expenses,
taken as a whole, decreased slightly for the year, and are considered within
normal operating fluctuations.
It is important to note that General and Administrative expenses include
all direct costs for administrative and accounting personnel, and all rents and
utilities for maintaining company offices. These costs also include all indirect
costs such as depreciation of fixed assets and amortization of intangible
assets, such as capitalized software and technology. Amortization and
depreciation expense for the six months ended June 30, 2002 was approximately
$217,000, or 21%, of all general and administrative expenses, compared to
$374,000, or 42%, for the same period in 2001. This decrease was attributable to
the write-off of technology assets at December 31, 2001.
Other Income (Expenses)
Interest income decreased by $107,000, or 84%, to $21,000 for the three
months ended June 30, 2002, from $128,000 for the comparable period in 2001.
Interest income also decreased by $124,000, or 78%, to $36,000 for the six
months ended June 30, 2002, from $160,000 for the comparable period in 2001.
These decreases were due to a reduction in the Company's cash reserves that were
used to fund operations, and a reduction in the rate of interest the Company
earned on its cash reserves, due to market conditions and an overall drop in
interest rates.
Interest expense increased $3,000, or 2%, to $137,000 for the six months
ended June 2002, from $134,000 for the comparable period in 2001. All interest
expense is attributable to the Company's 10% Senior Notes, with interest expense
accrued monthly and being payable April 1 and October 1 of each year. This
increase was due to the amortization of bond discount, that is attributable to
the 457 warrants issued with the Senior Notes due 2004, resulting in additional
interest expense per month over the life of the securities. (See Note 4 - Senior
Notes, to the Consolidated Condensed Financial Statements above.)
-17-
Other gains/(losses) increased $44,000, or 880%, to $49,000 for the three
and six months ended June 30, 2002, from $5,000 for the comparable periods in
2001. This increase was due to the disposal of marketable securities. The
Company's marketable securities are held in conservative bond funds and can
fluctuate values from time to time. The Company believes that its current
marketable securities will increase in value and its unrealized gains will
offset any realized losses.
Other Items
The Company is involved in a legal action, which began April 12, 2002,
which is discussed in Item 1. Legal Proceedings of Part II, below in this
document.
Liquidity and Capital Resources
The Company's future liquidity is uncertain due to the following factors:
First, approximately $2,224,000 of the Company's 10% Senior Notes are
maturing on September 30, 2002, which could potentially consume all of the
Company's working capital.
Second, a contingent liability exists which amount is not estimable at the
present time, but will be known in December of 2002. As part of the settlement
of the Manley litigation, which litigation is discussed in Part I, Item 3, Legal
Proceedings, of the Company's Annual Report on Form 10-K, for the fiscal year
ended December 31, 2001, the Company may be required to purchase up to 80,000
shares of Cimetrix common stock from the Manleys at $2.80 per share, or a
maximum total repurchase cost of $224,000, beginning on December 1, 2002. The
Manley's also have the right to require the Company to redeem these shares at an
earlier date if the Company's average daily cash balance, computed on a monthly
basis, is at or below $1,250,000 or if Paul A. Bilzerian, who formerly served as
president and a director of the Company, becomes an officer, director, employee
or agent of the Company prior to December 31, 2002. The $224,000 potential
repurchase cost is reflected on the Company's balance sheet after the
liabilities section but before the stockholders' equity, as redeemable common
stock.
While management believes that the Company does have sufficient working
capital to maintain its current level of operations for the remainder of fiscal
2002, it does not have sufficient capital to maintain its current level of
operations and also retire the 10% Senior Notes due September 30, 2002.
Therefore, management is seeking to raise additional financing through a private
offering of debt securities in order to retire its current debt (See Note 4 -
Senior Notes, to the Consolidated Condensed Financial Statements above). While
management hopes that the private offering of notes will raise sufficient funds
to retire the Company's Seniors Notes due September 30, 2002, there can be no
assurance that this will be the case.
It is critical to the Company's cash flow that the Company succeed in
selling approximately $2,200,000 of the new Senior Notes due September 30, 2005
through either the exchange of existing notes that are due September 2002, or
through the sale of Senior Notes to new noteholders, or a combination of
exchanges and sales. This would free up that amount of working capital, which
will be needed to fund operations if the Company's operating results do not
improve.
-18-
Future liquidity will also be dependent upon the Company's ability to
generate cash flow from operations, management of its trade receivables. Since
inception, the Company has generated an operating deficit, making its liquidity
dependent on obtaining external financing through debt or equity securities. The
current operating deficit makes obtaining working capital through traditional
bank loans or credit lines more difficult.
At June 30, 2002, the Company had cash and other current assets of
$2,979,000, and current liabilities of $3,144,000, resulting in a working
capital deficit of $165,000, as compared to working capital of $1,308,000 at
December 31, 2001. This decrease in working capital of $1,473,000 was due to the
use of working capital to fund operations for the year.
Cash used in operating activities for the six months ended June 30, 2002
was $491,000, compared to cash used in operating activities of $266,000, for the
same period in 2001. The negative cash flow year to date resulted primarily from
the net loss from operations of $1,693,000. The Company's trade receivables also
decreased by $930,000 to $782,000 for the six months ended June 30, 2002, from
$1,712,000 at December 31, 2001, due to the collection of such receivables and
low sales volume.
Cash provided by investing activities for the period ended June 30, 2002
was $342,000, compared to cash provided by investing activities of $162,000 for
the same period in 2001. This increase resulted from the sale of marketable
securities held for investment.
The Company has not been adversely affected by inflation but does believe
that technological advances and competition within the software industry have
generally caused prices of the products sold by the Company to decline. The
Company's software represents a small portion of our customer's product costs
and therefore management remains optimistic that demand for the Company's
products will continue. However, there are continued economic risks inherent in
foreign trade, because sales to foreign customers accounted for 39% and 45% of
the Company's net sales for the three months ended June 30, 2002 and 2001,
respectively.
Factors Affecting Future Results
Second quarter revenues decreased slightly compared to the prior year,
coming in below the Company's target revenue of $1,000,000 for the quarter. The
economic slowdown has led to significant delays in placing orders by the
Company's OEM customers. As the end-user customers have cut back on capital
equipment expenditures, the Company's OEM customers have also cut back on their
orders for the Company's software products. Because of this, Management
continues to invest heavily in sales and marketing efforts in order to expand
its customer base. Management remains hopeful that these new customers will
provide the needed revenues to sustain operations.
The Company's future operating results and financial condition are
difficult to predict and will be affected by a number of factors. The markets
for the Company's products are emerging and specialized, and the Company's
technology has been commercially available for a relatively short time.
Accordingly, the Company has limited experience with the commercial use and
acceptance of its products and the extent of the modifications, adaptations and
custom applications that are required to integrate its products and satisfy
customer performance requirements. There can be no assurance that the emerging
markets for industrial motion control that are served by the Company will
continue to grow or that the Company's existing and new products will satisfy
the requirements of those markets and achieve a successful level of customer
acceptance. Because of this, the Company continues to devote significant
research and development resources to improve its existing products and to the
development of new products.
-19-
Because of these and other factors, past financial performance is not
necessarily indicative of future performance, historical trends should not be
used to anticipate future operating results, and the trading price of the
Company's common stock may be subject to wide fluctuations in response to
quarter-to-quarter variations in operating results and market conditions.
Certain Risk Factors
Statements regarding the future prospects of the Company must be evaluated
in the context of a number of factors that may materially affect its financial
condition and results of operations. Disclosure of these factors is intended to
permit the Company to take advantage of the safe harbor provisions of the
Private Securities Litigation Reform Act Of 1995. Most of these factors have
been discussed in prior filings by the Company with the Securities and Exchange
Commission. Although the Company has attempted to list several of the factors
that it is currently aware may have an impact on its operations, other factors
may in the future prove to be important and the following list should not
necessarily be considered comprehensive.
Risk of Default on Senior Notes Due September 30, 2002
There is a significant risk that the Company will not be able to pay the
10% Senior Notes due September 30, 2002. (See Note 4-Senior Notes, to the
Consolidated Condensed Financial Statements above.) This default could cause the
Company to become insolvent and may force the Company to consider seeking
bankruptcy protection under Federal bankruptcy law. This default could also
cause other material, adverse problems to the Company and could result in our
shareholders and noteholders receiving nothing in return for their investment in
the Company.
Operating Losses, Accumulated Deficit
The financial statements of the Company as of June 30, 2002, reflect a net
loss of $1,693,000, and an accumulated deficit of $25,801,000. As of that date,
the Company had a deficit of working capital of $165,000. Losses have resulted
principally from costs incurred in connection with research and development and
the selling and marketing of the Company's software products. CODE motion
control software was introduced commercially in October 1995. The Company's
communications products, GEM, CIMConnect and CIM300 were introduced during 1997,
2000, and 2000 respectively. The likelihood of success of the Company must be
considered in light of the problems, expenses, difficulties, complications and
delays frequently encountered in connection with the development of new products
and the competitive environments in the industry in which the Company operates.
There can be no assurance that the Company will not encounter substantial delays
and unexpected expenses related to research, development, production, marketing
or other unforeseen difficulties.
Dependence Upon Customers
A large percentage of the Company's sales is to only a few customers. (See
"Major Customers" under Item 2, Management's Discussion and Analysis, "Results
of Operations".) The loss of any customer's business could have a material
adverse effect on the Company. Additionally, the quantity of each customer's
business with the Company depends substantially upon market acceptance of the
customer's products that utilize the Company's software products and upon the
development cycle of the customer's products. The nature of the Company's
business is such that it will likely continue to have few customers accounting
for a significant portion of its business from time to time.
-20-
Risk of Technological Changes
The markets for the Company's products are new and emerging and as such
these markets are characterized by rapid technological change, evolving
requirements, developing industry standards, and new product introductions. The
dynamic nature of these markets can render existing products obsolete and
unmarketable within a short period of time. Accordingly, the life cycle of the
Company's products is difficult to estimate. The Company's future success will
depend in large part on its ability to enhance its products and develop and
introduce, on a timely basis, new products that keep pace with technological
developments and emerging industry standards and gain a competitive advantage.
Dependence Upon Key Personnel
The Company is highly dependent on the services of its key managerial and
engineering personnel, including, Robert H. Reback, President and CEO, David P.
Faulkner, Executive Vice President and Managing Director of Machine Control
Products, Michael D. Feaster, Vice President of Software Development and Steven
K. Sorensen, Vice President and Chief Engineer. The loss of any member of the
Company's senior management team could adversely affect the Company's business
prospects. The Company does not maintain key-man insurance for any of its key
management personnel.
For a more complete discussion of these risk factors, the reader should
refer to the Company's Annual Report filed on Form 10-K, for the period ended
December 31, 2001, filed March 31, 2002.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------
The Company has no activities in derivative financial or commodity
instruments. The Company's exposure to market risks, (i.e. interest rate risk,
foreign currency exchange rate risk, equity price risk) through other financial
instruments, including cash equivalents, accounts receivable, and lines of
credit, is not material.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
Litigation with Steven D. Hausle, et al,
On April 12, 2002, Steven D. Hausle, Daniel J. Garnett M.D., Stephanie A.
Garnett, Axcient Corporation, and Ronald Tripiano, as plaintiffs, filed suit
against the Company, Robert H. Reback and Randall A. Mackey, as defendants, in
United States District Court, Northern District of California, San Jose
Division, Case Number C02-01769. The complaint alleges breach of oral and
written contract, fraud, negligent misrepresentation, breach of privacy, unfair
competition, wrongful termination, negligence and shareholder derivative claims
for breach of fiduciary duties, constructive fraud, negligence, and seeks
injunctive and declaratory relief. The plaintiffs are demanding $16,000,000 and
a jury trial.
In response to the complaint, the Company filed a motion to dismiss and/or
transfer. Messrs. Reback and Mackey also filed a motion to dismiss and/or
transfer. Although the court issued "Tentative Rulings" granting and denying
various aspects of the motions, a final ruling on the motions has yet to be
issued. The Company still believes the complaint is without merit and intends to
continue to vigorously defend the action. On May 16, 2002, the Company filed an
action in the United States District Court, District of Utah, Case Number
2-02CV-0484K asserting certain claims against Mr. Hausle and Axcient
Corporation. No response has been filed, as the date to do so has not passed.
-21-
ITEM 2. CHANGES IN SECURITIES
On July 12, 2002, the Company entered into an agreement with Positio, Inc.,
which provides investor and public relations services for the Company, to pay
$4,500 per month of Positio's fees, in Company common stock. The agreement
extends from May through September 2002, for a total of $22,500 to be paid in
Company stock. The number of shares issued is based on the closing stock price
on the OTC Bulletin Board, on the 25th day of each month. On May 25th the
closing price for the Company's stock was $.32, resulting in 14,062 (4,500/.32)
shares being issued to Positio. On June 25, 2002, the closing price was $.28,
resulting in 16,071 (4,500/.28) shares being issued to Positio.
The shares being issued under this agreement have not been, and will not be
registered with the Securities and Exchange Commission nor with any state
securities commission. The shares are restricted securities, issued under
statutory exemptions available under the Securities Act of 1933 and under
applicable state securities statutes. This is an isolated transaction and is not
a public offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
-22-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The annual meeting of shareholders of the Company was held on Saturday,
June 1, 2002, with proxies for the meeting solicited by the Company's Board of
Directors, pursuant to Regulation 14A under the Securities and Exchange Act of
1934. Matters voted on at the meeting were as follows: the election of four
directors, the approval of amendment to the 1998 Stock Option Plan to authorize
an additional 1,000,000 shares of common stock to be made available for issuance
under the plan, and the ratification of Tanner + Co. as the Company's
independent public accountants. There was no proxy solicitation in opposition to
management's proposals or nominees for election as directors.
All three proposals were approved and adopted by the margins indicated below:
1. To elect four directors to the Company's Board of Directors to serve for
one-year terms.
Number of Shares
For Withheld
--- --------
Dr. Lowell K. Anderson 20,697,032 249,215
Richard Gommermann 20,843,332 102,915
Joe K. Johnson 20,847,139 99,108
Randall A. Mackey 20,847,557 98,690
2. To amend the Company's 1998 Stock Option Plan, to authorize an additional
1,000,000 shares of common stock to be made available for issuance under
the plan.
For: 20,389,109
Against: 498,306
Abstain: 58,832
3. To ratify the appointment of Tanner + Co. as the Company's independent
public accountants.
For: 20,881,656
Against: 23,890
Abstain: 40,701
ITEM 5. OTHER INFORMATION
None
-23-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibit listing
The following exhibits are provided with this report:
Exhibit
No. Description
- ------- -----------
3.1 Articles of Incorporation (1)
3.2 Articles of Merger of Cimetrix (USA) Incorporated with Cimetrix
Incorporated (2)
3.3 Amended Bylaws
10.1 Lease with Capitol Properties Four, L.C. (3)
10.2 1998 Incentive Stock Option Plan (4)
10.3 Security Agreement with Michael and Barbara Feaster (5)
10.4 Employment Agreement with Robert H. Reback, President and Chief
Executive Officer (6)
10.5 Employment Agreement with David P. Faulkner, Executive Vice President
and Managing Director of Machine Control Products (6)
10.6 Employment Agreement with Michael D. Feaster, Vice President of
Software Development (6)
10.7 Employment Agreement with Steven K. Sorensen, Vice President and Chief
Technical Officer (6)
10.8 Employment Agreement with Riley G. Astill, Vice President of Finance,
Chief Financial Officer, Treasurer and Secretary (6)
10.9 Amendment 1 to 1998 Incentive Stock Option Plan (7)
10.10 Amendment 2 to 1998 Incentive Stock Option Plan (8)
10.11 Form of Indemnification Agreement with directors and officers
10.12 Settlement Agreement and Mutual Release with Peter Manley and Jana
Manley
99.1 Certificate of Cimetrix Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
99.2 Certificate of Cimetrix Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
- --------------------------------------------
(1) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
ended December 31, 1993.
(2) Incorporated by reference to Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1995.
(3) Incorporated by reference from the Registration Statement on Form S-2,
File No. 333-60, as filed on July 2, 1997.
(4) Incorporated by reference to Proxy Statement on Schedule 14A dated
April 20, 1998.
(5) Incorporated by reference to Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, filed April 2, 2001.
(6) Incorporated by reference to Quarterly Report on Form 10-Q for the quarter
ended March 31, 2002, filed May 15, 2002.
(7) Incorporated by reference to Proxy Statement on Schedule 14A dated
April 30, 2001, as filed on May 14, 2001.
(8) Incorporated by reference to Proxy Statement on Schedule 14A dated
April 30, 2002, as filed on April 30, 2002.
-24-
(b) Reports on Form 8-K
No Current Report on Form 8-K was filed by Cimetrix, Incorporated during
the quarter ended June 30, 2002.
Subsequent to quarter end, on July 17, 2002, the Company filed an 8-K
announcing the appointment of Robert H. Reback, the Company's President and CEO,
as a director of the Company. Mr. Reback will remain as President and CEO and
serve as a director until the next shareholder's meeting at which directors are
elected.
-25-
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.
REGISTRANT
CIMETRIX INCORPORATED
Dated: August 14, 2002 By: /s/ Robert H. Reback
------------------------
ROBERT H. REBACK
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Riley G. Astill
-----------------------
RILEY G. ASTILL
Vice President of Finance, Treasurer
and Chief Financial Officer
(Principal Financial and Accounting Officer)
-26-