Exhibit 99.3
Cimetrix Incorporated
EFS Solutions, Inc.
Unaudited Pro Forma
Combined Condensed Financial Information
On October 4, 2005, Cimetrix Incorporated (“the Company”) completed its previously announced acquisition of EFS Solutions, Inc. (“EFS”), a privately held company that provides specialty engineering services to semiconductor companies. Pursuant to the terms of the merger agreement, the Company paid approximately $1,254,000 in consideration to the shareholders of EFS, consisting of $640,000 of the Company’s common stock and $614,000 in cash and had approximately $65,000 in transaction costs.
The unaudited pro forma combined condensed statements of operations for the year ended December 31, 2004 and the six months ended June 30, 2005 have been prepared in accordance with accounting principles generally accepted in the United States to give effect to the October 4, 2005 acquisition of EFS as if the transaction occurred on January 1, 2004. Pro forma adjustments related to the acquisition include additional compensation expense to the former shareholders of EFS for portions of amounts reported by EFS as S Corporation distributions, additional amortization expense of intangible assets acquired, and elimination of depreciation expense on property and equipment retained by the former shareholders of EFS.
The unaudited pro forma combined condensed balance sheet as of June 30, 2005 has been prepared in accordance with accounting principles generally accepted in the United States to give effect to the October 4, 2005 acquisition of EFS as if the transaction occurred on June 30, 2005. Pro forma adjustments related to the acquisition include the elimination of the assets and the liabilities retained by the shareholders of EFS, the allocation of the purchase price to the assets acquired, and the elimination of the remaining retained earnings of EFS.
The unaudited pro forma combined condensed financial statements are prepared for informational purposes only and are not necessarily indicative of future results or actual results that would have been achieved had the acquisition of EFS been consummated as of the dates specified above.
1
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2004
| | Historical | | Pro Forma | | | | | |
| | Company | | EFS | | Adjustments | | | | Pro Forma | |
Sales: | | | | | | | | | | | |
Software | | $ | 2,841,000 | | $ | — | | $ | — | | | | $ | 2,841,000 | |
Services and support | | 1,701,000 | | 472,000 | | — | | | | 2,173,000 | |
| | | | | | | | | | | |
Total net sales | | 4,542,000 | | 472,000 | | — | | | | 5,014,000 | |
| | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | |
Cost of sales | | 844,000 | | 305,000 | | 74,000 | | (1) | | 1,223,000 | |
General and administrative | | 1,247,000 | | 19,000 | | 285,000 | | (2) | | 1,549,000 | |
| | | | | | (2,000 | ) | (3) | | | |
Selling, marketing and customer support | | 1,182,000 | | — | | — | | | | 1,182,000 | |
Research and development | | 978,000 | | — | | — | | | | 978,000 | |
Provision for doubtful accounts | | (100,000 | ) | — | | — | | | | (100,000 | ) |
| | | | | | | | | | | |
Total costs and expenses | | 4,151,000 | | 324,000 | | 357,000 | | | | 4,832,000 | |
| | | | | | | | | | | |
Income from operations | | 391,000 | | 148,000 | | (357,000 | ) | | | 182,000 | |
| | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | |
Interest and other income | | 42,000 | | — | | — | | | | 42,000 | |
Interest expense | | (269,000 | ) | — | | — | | | | (269,000 | ) |
| | | | | | | | | | | |
Total other expense | | (227,000 | ) | — | | — | | | | (227,000 | ) |
| | | | | | | | | | | |
Income (loss) before taxes | | 164,000 | | 148,000 | | (357,000 | ) | | | (45,000 | ) |
| | | | | | | | | | | |
Provision for income taxes | | — | | — | | — | | | | — | |
| | | | | | | | | | | |
Net income (loss) | | $ | 164,000 | | $ | 148,000 | | $ | (357,000 | ) | | | $ | (45,000 | ) |
| | | | | | | | | | | |
Income (loss) per share: | | | | | | | | | | | |
Basic | | $ | 0.01 | | $ | — | | $ | (0.01 | ) | (4) | | $ | 0.00 | |
Diluted | | $ | 0.01 | | $ | — | | $ | (0.01 | ) | (4) | | $ | 0.00 | |
| | | | | | | | | | | |
Weighted average number of shares outstanding | | | | | | | | | | | |
Basic | | 27,730,000 | | — | | 1,394,000 | | (5) | | 29,124,000 | |
Diluted | | 28,311,000 | | — | | 813,000 | | (5) | | 29,124,000 | |
2
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
| | Historical | | Pro Forma | | | | | |
| | Company | | EFS | | Adjustments | | | | Pro Forma | |
Sales: | | | | | | | | | | | |
Software | | $ | 1,445,000 | | $ | — | | $ | — | | | | $ | 1,445,000 | |
Services and support | | 853,000 | | 857,000 | | — | | | | 1,710,000 | |
| | | | | | | | | | | |
Total net sales | | 2,298,000 | | 857,000 | | — | | | | 3,155,000 | |
| | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | |
Cost of sales | | 239,000 | | 320,000 | | 50,000 | | (1) | | 609,000 | |
General and administrative | | 686,000 | | 20,000 | | 142,000 | | (2) | | 842,000 | |
| | | | | | (6,000 | ) | (3) | | | |
Selling, marketing and customer support | | 851,000 | | — | | — | | | | 851,000 | |
Research and development | | 586,000 | | — | | — | | | | 586,000 | |
| | | | | | | | | | | |
Total costs and expenses | | 2,362,000 | | 340,000 | | 186,000 | | | | 2,888,000 | |
| | | | | | | | | | | |
Income (loss) from operations | | (64,000 | ) | 517,000 | | (186,000 | ) | | | 267,000 | |
| | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | |
Interest and other income | | 27,000 | | — | | — | | | | 27,000 | |
Interest expense | | (98,000 | ) | (1,000 | ) | 1,000 | | (6) | | (98,000 | ) |
| | | | | | | | | | | |
Total other expense | | (71,000 | ) | (1,000 | ) | 1,000 | | | | (71,000 | ) |
| | | | | | | | | | | |
Income (loss) before income taxes | | (135,000 | ) | 516,000 | | (185,000 | ) | | | 196,000 | |
| | | | | | | | | | | |
Provision for income taxes | | — | | — | | — | | | | — | |
| | | | | | | | | | | |
Net income (loss) | | $ | (135,000 | ) | $ | 516,000 | | $ | (185,000 | ) | | | $ | 196,000 | |
| | | | | | | | | | | |
Income (loss) per share: | | | | | | | | | | | |
Basic | | $ | 0.00 | | $ | — | | $ | 0.01 | | (4) | | $ | 0.01 | |
Diluted | | $ | 0.00 | | $ | — | | $ | 0.01 | | (4) | | $ | 0.01 | |
| | | | | | | | | | | |
Weighted average number of shares outstanding | | | | | | | | | | | |
Basic | | 29,808,000 | | — | | 1,394,000 | | (5) | | 31,202,000 | |
Diluted | | 29,808,000 | | — | | 3,063,000 | | (5) | | 32,871,000 | |
3
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF JUNE 30, 2005
| | Historical | | Pro Forma | | | | | |
| | Company | | EFS | | Adjustments | | | | Pro Forma | |
Assets | | | | | | | | | | | |
| | | | | | | | | | | |
Current assets: | | | | | | | | | | | |
Cash and cash equivalents | | $ | 2,819,000 | | $ | 316,000 | | $ | (316,000 | ) | (7) | | $ | 2,140,000 | |
| | | | | | (679,000 | ) | (8) | | | |
Accounts receivable, net | | 987,000 | | 314,000 | | — | | | | 1,301,000 | |
Prepaid expenses and other | | 33,000 | | — | | — | | | | 33,000 | |
| | | | | | | | | | | |
Total current assets | | 3,839,000 | | 630,000 | | (995,000 | ) | | | 3,474,000 | |
| | | | | | | | | | | |
Intangible assets, net | | 206,000 | | — | | 997,000 | | (8) | | 1,203,000 | |
Property and equipment, net | | 140,000 | | 57,000 | | (49,000 | ) | (7) | | 148,000 | |
Other assets | | 25,000 | | — | | — | | | | 25,000 | |
| | | | | | | | | | | |
| | $ | 4,210,000 | | $ | 687,000 | | $ | (47,000 | ) | | | $ | 4,850,000 | |
| | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | |
| | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | |
Accounts payable | | $ | 101,000 | | $ | 16,000 | | $ | (16,000 | ) | (7) | | $ | 101,000 | |
Accrued expenses | | 282,000 | | 138,000 | | (138,000 | ) | (7) | | 282,000 | |
Deferred revenue | | 532,000 | | — | | — | | | | 532,000 | |
Current portion of long-term debt | | 910,000 | | 7,000 | | (7,000 | ) | (7) | | 910,000 | |
| | | | | | | | | | | |
Total current liabilities | | 1,825,000 | | 161,000 | | (161,000 | ) | | | 1,825,000 | |
| | | | | | | | | | | |
Long-term debt, net of current portion | | 699,000 | | 33,000 | | (33,000 | ) | (7) | | 699,000 | |
| | | | | | | | | | | |
Total liabilities | | 2,524,000 | | 194,000 | | (194,000 | ) | | | 2,524,000 | |
| | | | | | | | | | | |
Stockholders’ equity: | | | | | | | | | | | |
Common stock | | 3,000 | | — | | 1,000 | | (8) | | 4,000 | |
Additional paid-in capital | | 30,797,000 | | — | | 639,000 | | (8) | | 31,436,000 | |
Treasury stock, at cost | | (49,000 | ) | — | | — | | | | (49,000 | ) |
Retained earnings (accumulated deficit) | | (29,065,000 | ) | 493,000 | | (171,000 | ) | (7) | | (29,065,000 | ) |
| | | | | | (322,000 | ) | (8) | | | |
| | | | | | | | | | | |
Total stockholders’ equity | | 1,686,000 | | 493,000 | | 147,000 | | | | 2,326,000 | |
| | | | | | | | | | | |
| | $ | 4,210,000 | | $ | 687,000 | | $ | (47,000 | ) | | | $ | 4,850,000 | |
4
UNAUDITED PRO FORMA ADJUSTMENTS
(1) Records portion of S Corporation distributions to the shareholders of EFS as compensation expense.
(2) Records amortization of intangible assets acquired using the straight-line method over the following estimated useful lives: customer relationships – 5 years; covenant not to compete – 2 years.
(3) Reduces depreciation expense for the property and equipment that will be retained by the shareholders of EFS.
(4) Records changes in basic and diluted income (loss) per share to reflect the pro forma adjustments and to include the effect of the issuance of common shares as part of the acquisition cost.
(5) Reflects the additional shares of common stock of the Company issued to the shareholders of EFS as part of the acquisition cost, eliminating common stock equivalents where a net loss is reported on a pro forma basis.
(6) Reduces interest expense for the interest related to the long-term debt retained by the shareholders of EFS.
(7) Eliminates the assets and the liabilities retained by the shareholders of EFS
(8) Records the consideration paid to the shareholders of EFS and the allocation of the purchase price to the assets acquired and eliminates the remaining retained earnings of EFS. The total consideration is summarized as follows:
Cash | | $ | 614,000 | |
Issuance of 1,394,336 shares of common stock of the Company valued at $0.46 per share | | 640,000 | |
Transaction costs | | 65,000 | |
| | | |
Total | | $ | 1,319,000 | |
Allocated to the acquired assets as follows:
Accounts receivable | | $ | 314,000 | |
Property and equipment | | 8,000 | |
Intangible assets: | | | |
Customer relationships | | 356,000 | |
Covenant not to compete | | 427,000 | |
Goodwill | | 214,000 | |
| | | |
Total | | $ | 1,319,000 | |
5
