SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
Date of Report (Date of earliest event reported): February 18, 2003
CIMETRIX, INCORPORATED
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(Exact name of Registrant as specified in its charter)
Nevada 0-16454 87-0439107
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State of Incorporation Commission File No. IRS Employer
Identification No.
6979 South High Tech Drive, Salt Lake City, Utah 84047-3757
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(Address of principal executive offices)
Registrant's telephone number, Including Area Code: (801) 256-6500
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Item 5. Other Events
Although the effect of each of the following items, by itself, may not be
material, management believes that the aggregate effect of these events may be
of importance to security holders.
In Item 2, "Management's Discussion and Analysis of Financial Condition and
Results of Operations", of the Company's Form 10-Q report for the quarter ended
September 30, 2002, the Company reported that its future liquidity was uncertain
due to several factors, including (1) the fact that $982,000 of the Company's
10% Senior Notes that matured on September 30, 2002 were unpaid; and (2) the
contingent liability which existed as of December 31, 2002 with respect to the
settlement of the Manley litigation. This report on Form 8-K provides an update
regarding these two factors as follows:
1. $982,000 of 10% Senior Notes. As requested by the Company, the Receiver,
appointed by the United States District Court for the District of Columbia in
2000 in the case of The Securities and Exchange Commission v. Paul A. Bilzerian,
et al. (Civil Action No. 89-1854 (SSH)), has filed with the court a motion to
accept the Company's proposal to receive 50% payment in cash with respect to two
Senior Notes and to roll over the other 50% into new Cimetrix 12% Senior Notes
due 2005. One is a $110,000 note owned by the Receiver, the other is a $372,000
note under the Receiver's control. Consequently, with respect to these two notes
totaling $482,000, the Company expects to pay $241,000 in cash and expects to
issue new notes for the other $241,000.
The only other outstanding 10% Senior Note certificate that matured on
September 30, 2002 and remains unpaid is a $500,000 note submitted to the
Company for payment by Puma Foundation. The assets of Puma Foundation were
unfrozen in the District of Columbia court action referenced above and returned
to Puma Foundation on or about December 30, 2002. The President of Puma
Foundation is Terri L. Steffen, wife of the former President and CEO of the
Company, Paul A. Bilzerian. During September 2002, the Company had been in
negotiations with Puma Foundation and believed that once the assets of the
foundation became unfrozen, Puma Foundation would accept the Company's proposal
to receive 50% payment in cash and roll over the other 50% into new Cimetrix 12%
Senior Notes due 2005, provided that no other holder of Cimetrix 10% Senior
Notes received payment of more than 50% in cash. Since that time, Puma
Foundation has issued several letters to the Company demanding payment in full.
While the Company has tried to negotiate acceptable payment terms, Puma
Foundation's recent position has been non-negotiable and it has demanded cash
payment in full. On January 17, 2003, the Company was served with a summons and
complaint in a lawsuit filed against the Company in the United States District
Court in the Middle District of Florida (Case No. 8:03-CV-85-T-23-TGW) by the
Puma Foundation, as plaintiff, asking for judgment in the amount of $500,000
plus interest, attorney's fees, and costs. Since learning of this lawsuit,
current management has examined its files relating to the Senior Note
certificate that is the subject of the lawsuit and has discovered that this
certificate may, in fact, not be a valid Company 1997 Senior Note. The Company
will continue to examine this issue and is currently conducting an investigation
to determine its legal obligations prior to responding to the complaint.
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2. Contingent Liability. As part of the settlement of the Manley
litigation, the Company may have been required to purchase up to 80,000 shares
of Company common stock from the Manleys at $2.80 per share, or a maximum total
repurchase cost of $224,000, beginning on December 1, 2002. Of this contingent
liability, 53,214 shares of Company common stock were controlled by Jana Manley,
which at $2.80 per share represented a potential repurchase cost of $149,000.
The other 26,786 shares of Company common stock were controlled by the law firm
of Parr, Waddoups, Brown, Gee & Loveless, which represented the Manleys during
this litigation, which at $2.80 per share represented a potential repurchase
cost of $75,000. Due to the Company's low cash balance, it would have been very
difficult for the Company to pay the full redemption amounts in cash to either
Jana Manley or the law firm of Parr, Waddoups, Brown, Gee & Loveless. On
December 31, 2002, the Company and Jana Manley reached agreement that in
exchange for surrender and cancellation of the 53,214 shares of Company common
stock controlled by Ms. Manley, the Company would pay a one time cash payment of
$29,000 and deliver a Company 12% Senior Note due 2005 in the amount of
$120,000. All other terms and conditions contained in the Manley litigation
settlement agreement entered into effective June 26, 2001 remain as stated in
that agreement. On January 6, 2003, the Company also reached an agreement with
the law firm of Parr, Waddoups, Brown, Gee & Loveless providing that in exchange
for the surrender and cancellation of the 26,786 shares of Company common stock
owned by the law firm, the Company would pay a one time cash payment of $41,250
and be released from any further obligations with respect to the law firm's
stock repurchase option.
SIGNATURES
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Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CIMETRIX, INCORPORATED
(Registrant)
Dated: February 18, 2003 By:/s/ Robert H. Reback
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Robert H. Reback
President and Chief Executive Officer