SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) APRIL 14, 2000
CIMNET, INC.
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EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-22597 52-2075851
---------------------------- ------------- -------------------
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF FORMATION) FILE NUMBER) IDENTIFICATION NO.)
946 WEST PENN AVENUE, ROBESONIA, PA 19551
---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (610) 693-3114
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(FORMER NAME OR FORMER ADDRESS, IF CHANGES SINCE LAST REPORT)
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<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired. See pages F-1 through
F-11 below.
(b) Pro Forma Financial Information. See pages P-1 through P-4 below.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly authorized and caused the undersigned to sign this
Report on the Registrant's behalf.
CIMNET, INC.
By: /s/ JOHN D. RICHARDSON, III
---------------------------------
Name: John D. Richardson, III
Title: Chief Executive Officer
Dated: June 28, 2000
3
<PAGE>
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
REALTIME INFORMATION SYSTEMS PTY LIMITED
JUNE 30, 1999 AND 1998
F-1
<PAGE>
C O N T E N T S
PAGE
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS
BALANCE SHEETS 4
STATEMENTS OF OPERATIONS 5
STATEMENT OF SHAREHOLDERS' EQUITY 6
STATEMENTS OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8
F-2
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Realtime Information Systems Pty Limited
We have audited the accompanying balance sheets of Realtime Information
Systems Pty Limited as of June 30, 1999 and 1998 and the related statements of
operations, shareholders' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Realtime Information
Systems Pty Limited, as of June 30, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ Grant Thornton LLP
-----------------------------
Philadelphia, Pennsylvania
May 12, 2000
F-3
<PAGE>
Realtime Information Systems Pty Limited
BALANCE SHEETS
June 30,
<TABLE>
<CAPTION>
ASSETS 1999 1998
--------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash $ 132 $ --
Accounts 112,102 40,555
Inventories 1,441 11,572
Other assets 3,507 3,273
--------- ---------
Total current assets 117,182 55,400
PROPERTY AND EQUIPMENT, NET 4,808 2,165
--------- ---------
$ 121,990 $ 57,565
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 30,363 $ 26,439
Cash overdraft 45,189 11,904
--------- ---------
Total liabilities 75,552 38,343
SHAREHOLDERS' EQUITY
Share capital, par value, $0.75 per share; authorized,
10,000,000 shares; issued, 119 at June 30,1999 and 1998 89 89
Additional paid in capital 38,342 38,342
Retained earnings (accumulated deficit) 14,512 (14,949)
Translation adjustment (6,505) (4,260)
--------- ---------
46,438 19,222
--------- ---------
$ 121,990 $ 57,565
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
Realtime Information Systems Pty Limited
STATEMENTS OF OPERATIONS
Years ended June 30,
1999 1998
--------- ---------
Sales $ 402,036 $ 280,428
Cost of goods sold 21,972 40,404
--------- ---------
Gross profit 380,064 240,024
--------- ---------
Operating expenses
Selling, general and administrative 384,503 291,136
--------- ---------
Operating loss (4,439) (51,112)
Other income (expense) 33,900 (1,752)
--------- ---------
NET INCOME (LOSS) $ 29,461 $ (52,864)
========= =========
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
Realtime Information Systems Pty Limited
STATEMENT OF STOCKHOLDERS' EQUITY
Years ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
Retained
Additional Earnings Comprehensive
Common Paid in (Accumulated Translation Income
Stock Capital Deficit) Adjustment (loss) Total
-------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at July 1, 1997 $ 78 $ -- $ 37,915 $ -- $ -- $ 37,993
Issuance of share capital 11 38,342 -- -- -- 38,353
Net loss -- -- (52,864) -- (52,864) (52,864)
Translation adjustment -- -- -- (4,260) (4,260) (4,260)
-------- -------- -------- -------- -------- --------
Total comprehensive loss $(57,124)
========
Balance at June 30, 1998 89 38,342 (14,949) (4,260) -- 19,222
Net income -- -- 29,461 -- 29,461 29,461
Translation adjustment -- -- -- (2,245) (2,245) (2,245)
-------- -------- -------- -------- -------- --------
Total comprehensive income $ 27,216
========
Balance at June 30, 1999 $ 89 $ 38,342 $ 14,512 $ (6,505) $ 46,438
======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
F-6
<PAGE>
Realtime Information Systems Pty Limited
STATEMENTS OF CASH FLOWS
Years ended June 30,
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 29,461 $(52,864)
Adjustments to reconcile net income (loss) to net cash used
in operating activities
Depreciation and amortization 1,392 1,910
(Increase) decrease in assets
Accounts receivable (71,546) (12,707)
Inventories 10,131 2,569
Deposits (234) 636
Increase (decrease) in accounts payable 3,923 2,397
-------- --------
Net cash used in operating activities (26,873) (58,059)
-------- --------
Cash flows from investing activities
(Purchase) disposal of property and equipment (4,034) 288
-------- --------
Net cash provided by (used in) investing activities (4,034) 288
-------- --------
Cash flows from financing activities
Increase in bank overdrafts 33,020 11,904
Proceeds from issuance of share capital -- 38,353
-------- --------
Net cash provided by financing activities 33,020 50,257
-------- --------
Effect of exchange rate changes on cash and cash equivalents (2,245) (2,882)
NET INCREASE (DECREASE) IN CASH 132 (10,396)
Cash at beginning of year -- 10,396
-------- --------
Cash at end of year $ 132 $ --
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-7
<PAGE>
Realtime Information Systems Pty Limited
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. NATURE OF BUSINESS
Realtime Information Systems Pty Limited (the Company) is in the
business of the development, sale, and maintenance of manufacturing execution
systems (MES) which enables factories to monitor work flows and manufacturing
processes. During fiscal year 1999, the Company initiated operations in the
United States. The Company's offices are located in Parramatta, Australia and
Raleigh, North Carolina.
2. REVENUE RECOGNITION
The Company generates revenue principally from the following sources.
SOFTWARE AND HARDWARE
Revenues are recorded on a monthly basis based upon the percentage
of work completed.
MAINTENANCE AGREEMENTS
Maintenance agreements generally require the Company to provide
technical support and certain software updates to customers.
Revenue on technical support and software update rights is
recognized ratably over the term of the maintenance agreement.
3. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out
method) or market.
4. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed
using accelerated methods over the useful life.
Improvements to leased property are amortized over the lesser of the
life of the lease or the lives of the improvements. Software is amortized over
three years under the straight-line method.
Expenditures for betterments and additions are capitalized, while
maintenance and repairs are charged to expense when incurred. When depreciable
property is retired or otherwise disposed of, the related assets and accumulated
depreciation are removed from the accounts and any resultant gain or loss is
reflected in earnings.
5. INCOME TAXES
The Company is taxed under the Australian tax laws.
(Continued)
F-8
<PAGE>
Realtime Information Systems Pty Limited
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999 and 1998
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
6. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
7. SOFTWARE DEVELOPMENT COSTS
Under the criteria set forth in Statement of Financial Accounting
Standards (SFAS) No. 86, Accounting for the Costs of Computer Software to be
Sold, Leased or Otherwise Marketed, capitalization of software development costs
begins upon the establishment of technological feasibility of the product. The
establishment of technological feasibility and the ongoing assessment of the
recoverability of these costs require considerable judgment by management with
respect to certain external factors, including but not limited to, anticipated
future gross product revenue, estimated economic product lives, and changes in
software and hardware technology. Amounts that would have been capitalized under
this statement after consideration of the above factors were immaterial and,
therefore, no software development costs have been capitalized by the Company.
Costs incurred internally to develop computer software products and the
costs to acquire externally developed software products (which have no
alternative future use) to be sold, leased, or otherwise marketed are charged to
expense as research and development until the technological feasibility of the
product has been established. Costs incurred after technological feasibility has
been established for software development, maintenance, and product enhancements
and acquisition costs are included in cost of goods sold.
Research and development costs of approximately $53,000 and $51,500
were charged to operations for the years ended June 30, 1999 and 1998,
respectively.
8. ADVERTISING COSTS
The Company expenses the cost of advertising the first time advertising
takes place.
9. FOREIGN CURRENCY TRANSLATION
The financial statements of the company are translated from Australian
dollars into U.S. dollars as follows:
o Balance sheet at period end rates except for share capital and
share premium reserved at historical rates and retained earnings at
the accumulated historical opening rate.
o Statement of operations at the weighted average exchange rate for
the period.
(Continued)
F-9
<PAGE>
Realtime Information Systems Pty Limited
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999 and 1998
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
The following is a summary of exchange rates in relation to U.S.
Dollars:
Weighted Average
Year End Rates Rates for the Years Ended
At June 30, June 30,
----------------------- -------------------------
1999 1998 1999 1998
-------- -------- --------- ---------
AUS 1= .66108 .62114 .6271 .6815
10. COMPREHENSIVE INCOME
On January 1, 1998, the Company adopted the provisions of SFAS No. 130,
Reporting Comprehensive Income. This new standard establishes standards for
reporting comprehensive income, which includes net income as well as certain
other items, which results in a change to equity during the period. These
financial statements have been reclassified to reflect the provisions of SFAS
No. 130.
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment consist of the following at June 30,
1999 1998
---------- ----------
Plant and equipment $ 24,367 $ 18,849
Partitions in office 4,706 4,423
Technical equipment 418 393
---------- ----------
Less accumulated depreciation 24,683 21,500
---------- ----------
$ 4,808 $ 2,165
========== ==========
Depreciation amounted to $1,392 and $1,910 for the years ended June 30,
1999 and 1998, respectively.
NOTE C - BANK OVERDRAFTS
The Company maintained an overdraft line of credit totaling $30,000 for
the years ended June 30, 1999 and 1998. The interest rate is the Bank's
Indicator Rate plus 2.50% annually. Interest rates for the years ended June 30,
1999 and 1998 were 11.25%.
NOTE D - COMMITMENTS
The Company leases office space. The lease expires December 31, 1999.
The Company is required to pay common maintenance expenses. Total rent expense
amounted to $19,840 and $21,561 for the years ended June 30, 1999 and 1998
respectively. The minimum rental commitment under the operating lease is $9,920
for fiscal year 2000.
F-10
<PAGE>
Realtime Information Systems Pty Limited
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 and 1998
NOTE E - SHAREHOLDERS' EQUITY
During fiscal year 1998, the Board of Directors approved the issuance
of 11 shares of common stock to two of its officers at par plus a premium per
share totaling $38,353.
NOTE F - CREDIT RISK
CUSTOMERS
The Company had three customers which accounted for 58% of total sales
in 1999 and two customers which accounted for 30% of total sales in 1998 of
which each accounted for at least 10% of sales.
NOTE G - SUBSEQUENT EVENTS
On April 16, 2000, the Company completed its merger with Cimnet, Inc.
(Cimnet). Under the terms of the Stock Purchase Agreement, the Company exchanged
its outstanding stock for $10,000 and 1,194,131 shares of Cimnet's common stock.
The acquisition was accounted for under the purchase method of accounting.
F-11
<PAGE>
Item 7(b) - Pro forma Financial Statements
PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION
(unaudited)
The following statements set forth certain selected financial information for
Cimnet, Inc. (Cimnet) and Realtime Information System Pty Limited (Realtime) on
an unaudited pro forma condensed combined basis giving effect to the acquisition
as if the acquisition had become effective on March 31, 2000, in the case of
balance sheet information presented, and as if the acquisition had become
effective at the beginning of the periods indicated, in the case of operations
information presented.
The unaudited pro forma condensed combined financial information set forth in
the following tables is presented for information purposes only and is not
necessarily indicative of the combined financial position or results of
operations that would have occurred had the acquisition been consummated on
March 31, 2000 or at the beginning of the periods indicated or which may occur
in the future.
P-1
<PAGE>
<TABLE>
<CAPTION>
PROFORMA CONDENSED COMBINED BALANCE SHEET
AS OF 3/31/00
(Unaudited)
CIMNET REALTIME
(historical) (historical) ADJUSTMENTS PROFORMA
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash 2,877 989 - 3,866
Accounts Receivable, Net of Allowance 571,839 24,721 - 596,560
Inventories 42,351 - - 42,351
Prepaid Expenses 103,220 443 - 103,663
Deferred Tax asset 53,123 - - 53,123
TOTAL CURRENT ASSETS 773,410 26,153 - 799,563
Goodwill - - 2,686,402 (1) 2,686,402
PROPERTY AND EQUIPMENT, NET 224,512 2,646 - 227,158
------------- --------- ----------- -----------
TOTAL ASSETS 997,922 28,799 2,686,402 3,713,123
============= ========= =========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Line of Credit 235,000 - 10,000 (1)(2) 245,000
Current portion of long term debt 18,306 - - 18,306
Accounts payable 164,266 18,406 - 182,672
Accrued expenses 58,884 - - 58,884
Due to related party 40,023 - - 40,023
Deferred income 483,706 - - 483,706
------------- --------- ----------- -----------
TOTAL CURRENT LIABILITIES 1,000,185 18,406 10,000 1,028,591
Long-Term Debt, net of current portion 3,339 - - 3,339
SHAREHOLDERS EQUITY (DEFICIENCY)
Common Stock 490 89 (89) (3) 609
119 (1)(3)
Additional Paid in Capital 1,031,384 38,342 (38,342) (3) 3,718,060
2,686,676 (3)
Accumulated deficit (746,043) (26,066) 26,066 (1)(3) (746,043)
Translation adjustment (1,972) 1,972 (3) -
Deferred Compensation (291,433) - (291,433)
------------- --------- ----------- -----------
(5,602) 10,393 2,676,402 2,681,193
------------- --------- ----------- -----------
997,922 28,799 2,686,402 3,713,123
============= ========= =========== ===========
</TABLE>
(1) The proforma condensed combined balance sheet reflects the $10,000 of cash
and the issuance of 1,194,131 shares of Cimnet common stock used to purchase 119
shares of the outstanding common stock of Realtime resulting in $2.7 million of
goodwill which is being amortized over a 15 year period. No other purchase
accounting adjustments were made to the assets and liabilities of Realtime as of
the acquisition date since there was no material difference between the fair
values and carrying values on that date.
(2) The Company borrowed funds from their line of credit to fund the cash
balance.
(3) Elimination of Realtime equity and to restate Cimnet common stock oustanding
using the exchange ratio. Historical and proforma common stock outstanding as of
March 31, 2000 was as follows:
<TABLE>
<CAPTION>
Cimnet Realtime Adjustments Proforma
------------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Common Stock - Cimnet 4,899,000 4,899,000
Common Stock - Realtime:
Common Stock outstanding 119 (119) -
Common Stock issued 1,194,131 1,194,131
------------- --------- ----------- -----------
Common Stock - Proforma Total 4,899,000 119 1,194,012 6,093,131
============= ========= =========== ===========
</TABLE>
P-2
<PAGE>
<TABLE>
<CAPTION>
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Three months ended March 31, 2000
(unaudited)
CIMNET INC, REALTIME(1)
(HISTORICAL) (HISTORICAL) ADJUSTMENTS PROFORMA
------------ ------------ ----------- --------
<S> <C> <C> <C> <C>
Net Sales 719,884 52,497 - 772,381
Cost of Goods Sold 144,784 - - 144,784
------------- -------- --------- --------
Gross Profit 575,100 52,497 - 627,597
------------- -------- --------- --------
Operating Expenses 713,098 101,827 - 814,925
Operating loss (137,998) (49,330) - (187,328)
Non-operating interest expense 4,108 - 231 (2) 4,337
Goodwill amortization - - 44,773 (3) 44,773
Other income (expense) - (1,953) - (1,953)
------------- -------- --------- --------
(Loss) Income before
income taxes (benefit) (137,998) (51,283) (45,004) (238,391)
Income taxes (benefit) - - - -
------------- -------- --------- --------
Net Loss (137,998) (51,283) (45,004) (238,391)
============= ======== ========= ========
Per share data
Net income (loss) per common share - Basic (0.03) NM (0.04)
Average number of common shares - Basic 4,899,000 NM 1,194,131 6,093,131
Net income (loss) per common share - Diluted (0.03) NM (0.04)
Average number of common shares - Diluted 4,899,000 NM 1,194,131 6,093,131
</TABLE>
(1) Realtime has a fiscal year ending June 30. For proforma purposes the
March 31, 2000 income statement reflects balances for Realtime for the 3
months ended March 31, 2000.
(2) Interest expense on proforma borrowings of $10,000 from the line of
credit utilizing an interest rate of 9.25%.
(3) Amortization of goodwill over a fifteen year period.
P-3
<PAGE>
<TABLE>
<CAPTION>
PROFORMA CONDENSED COMBINED STATEMENT OF INCOME
Year ended December 31, 1999
(unaudited)
CIMNET INC, REALTIME(1)
(HISTORICAL) (HISTORICAL) ADJUSTMENTS PROFORMA
------------ ------------ ----------- --------
<S> <C> <C> <C> <C>
Net Sales 3,475,258 452,759 3,928,017
Cost of Goods Sold 635,828 18,593 654,421
----------- -------- ---------- -----------
Gross Profit 2,839,430 434,166 3,273,596
----------- -------- ---------- -----------
Operating Expenses 2,659,829 400,780 3,060,609
Operating income 179,601 33,386 212,987
Non-operating interest expense 36,198 - 36,198
Goodwill amortization 179,093 (2) 179,093
Other income (expense) - 26,032 26,032
----------- -------- ---------- -----------
Income before
income taxes 143,403 59,418 (179,093) 23,728
Income taxes 54,766 - 54,766
----------- -------- ---------- -----------
Net Income (loss) 88,637 59,418 (179,093) (31,038)
=========== ======== ========== ===========
Per share data
Net income (loss) per common share - Basic 0.02 NM (0.01)
Average number of common shares - Basic 4,968,722 NM 1,194,131 6,162,853
Net income (loss) per common share - Diluted 0.02 NM (0.01)
Average number of common shares - Diluted 5,122,013 NM 1,194,131 6,162,853
(153,291) (3)
</TABLE>
(1) Realtime has a fiscal year ending June 30. For proforma purposes,
the six month period of January 1, 1999 through June 30, 1999 has
been combined with the six month period July 1, 1999 through
December 31, 1999.
(2) Amortization of goodwill over a fifteen year period.
(3) Common stock equivalents become anti-dultive due to the loss after
proforma adjustments, therefore, they are not included in the
calculation of proforma diluted earnings per share.
P-4
