U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-QSB
Mark one
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition period from _________to _________
Commission File No. 1-10623
Pamet Systems, Inc.
____________________________________________________________________
(exact name of small business issuer as specified in its charter)
Massachusetts 04-2985838
____________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Main Street, Acton, Massachusetts 01720
____________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (978) 263-2060
--------------
Check whether the issurer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the close of the period covered by this report:
Title of each class Number of share outstanding
------------------- ---------------------------
Common stock 4,186,110
($.01 par value)
Transitional Small Business Disclosure Format
YES NO X
------ ------
PAMET SYSTEMS, INC.
FORM 10-QSB TABLE OF CONTENTS
Part I - Financial Information
Item 1 - Financial Statements
Condensed Balance Sheets
March 31, 2001 and December 31, 2000
Condensed Statements of Operations
for the quarter ended March 31, 2001
and 2000
Condensed Statement of Cash Flows
for the three months ended March 31,
2001 and 2000
Item 2 - Management's Discussion and Analysis of
Financial Condition or Plan of Operations
Part II - Other Information
Item 1 - Legal Proceedings
Item 2 - Changes in Securities
Item 3 - Defaults Upon Senior Securities
Item 4 - Submission of Matters to a Vote of
Security Holders
Item 5 - Other Information
Item 6 - Exhibits and Reports on Form 8-K
Signature(s)
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Condensed Balance Sheets March 31, December 31,
2001 2000
--------- ------------
(unaudited)
CURRENT ASSETS
Cash $ 56,957 $ 1,507
Accounts receivable, net of allowance for
doubtful accounts of $147,198 and factored
receivables of $59,395 124,300 224,191
Accounts Receivable, factored 15,502 14,770
Inventory, net of reserve of $15,000 11,354 10,151
Prepaid expenses and other current assets 94,556 147,132
------- -------
TOTAL CURRENT ASSETS 302,669 397,751
PROPERTY AND EQUIPMENT, net 89,166 98,312
DEPOSITS 80,000 84,190
CAPITALIZED SOFTWARE DEVELOPMENT COSTS 48,916 65,221
------- -------
TOTAL ASSETS $520,751 $645,474
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $425,000 $425,000
Notes payable to related party 455,000 385,000
Due to Factor 79,048 36,199
Accounts payable, trade 850,008 795,226
Accounts payable, related party 26,024 19,945
Current portion of accrued interest payable
on long-term debt 81,257 143,538
Current portion of deferred gain on sale of
land and building 42,614 42,614
Accrued expenses 821,465 766,192
Deferred software maintenance revenue and
unearned revenue 446,941 601,505
--------- ---------
TOTAL CURRENT LIABILITIES 3,227,357 3,215,219
ACCRUED INTEREST PAYABLE on long-term debt,
net of current portion 84,929 --
DEFERRED GAIN on sale of land and building,
net of current portion 185,234 195,888
LONG TERM DEBT, net current portion 760,000 410,000
--------- ---------
TOTAL LIABILITIES 4,257,520 3,821,107
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, $.01 par value, 1,000,000
shares authorized, none issued -- --
Common Stock, $.01 par value, 30,000,000
shares authorized; issued and outstanding
4,186,110 at March 31, 2001 and 4,085,610
at December 31, 2000 respectively 41,861 40,856
Additional paid-in Capital 8,458,613 8,358,593
Accumulated deficit (12,237,243) (11,575,082)
---------- ---------
TOTAL STOCKHOLDERS DEFICIT (3,736,769) (3,175,633)
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS DEFICIT $520,751 $645,474
======= =======
See accompanying "Notes to Financial Statements (Unaudited)"
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Statements of Operations
(Unaudited)
Three Months Ended
March 31
------------------
2001 2000
Net sales $242,329 $395,861
Cost of product 41,305 131,762
------- -------
201,024 264,099
Operating expenses:
Personnel costs 520,739 551,342
Rent, utilities and telephone 54,826 58,220
Travel and entertainment 28,634 31,371
Professional fees 48,429 41,082
Depreciation and Amortization 28,355 28,963
Research and Development 84,731 223,372
Other operating expenses 47,404 79,911
------- --------
Total operating expenses 813,118 1,014,261
------- ---------
Income (loss) from operations (612,094) (750,162)
Interest Income (expense), Net (50,067) (38,154)
Net Income (loss) (662,161) (788,316)
======= =======
Earnings (loss) per weighted
average common share $(.16) $(.24)
=== ===
Weighted average shares used
in computing earnings per
share 4,130,715 3,286,939
See accompanying "Notes to Financial Statements (unaudited)"
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31, 2001 March 31, 2000
-------------- --------------
Net (loss) $(662,161) $(788,316)
Adjustments to reconcile net
loss to net cash used for
operating activities:
Deferred gain on sale of land and building (10,654) (10,654)
Depreciation and amortization 28,355 28,963
Change in assets and liabilities:
Accounts receivable, trade 99,891 404,774
Accounts receivable, factored (732) (3,142)
Inventory (1,203) (2,670)
Prepaid expenses and other current assets 52,576 41,112
Deposits 4,190 --
Due to factor 42,849 (57,496)
Accounts payable, trade 54,782 215,826
Accounts payable,related parties 6,079 (3,878)
Accrued expenses 55,273 149,635
Accrued interest payable on long-term debt 22,648 10,183
Deferred software maintenance revenue and
unearned support revenue (154,564) (124,640)
------- -------
Net cash (used for) operating activities (462,671) (123,997)
------- -------
Investing Activities
Expenditures for property and equipment (2,904) (7,016)
------ ------
Net cash provided by/(used for)
investing activities (2,904) (7,016)
------ ------
(continued on following page)
Item 1 - Financial Statements
PAMET SYSTEMS, INC.
Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31, 2001 March 31, 2000
-------------- --------------
Financing activities:
Proceeds from long-term debt-convertible
promissory notes 350,000 --
Proceeds from related party notes 70,000 --
Issuance of capital stock 101,025 240,000
Net change line of credit-vendor -- --
-------- -------
Net cash provided by financing
activities 521,025 240,000
------- -------
Net increase (decrease) in cash 55,450 92,681
Cash at beginning of period 1,507 40,207
------ -------
Cash at end of period 56,957 132,888
====== =======
Supplemental disclosure of cash
flow information:
Cash paid for interest: $15,623 $34,590
Summary of non-cash financing activites
Conversion of convertible promissory notes
to capital stock -- $250,000
See accompanying "Notes to Financial Statements (Unaudited)"
PAMET SYSTEMS, INC.
Notes to Condensed Financial Statements
(Unaudited)
Note (1) Statement Presentation
The accompanying unaudited financial statements have been prepared based
upon Securities and Exchange Commission (SEC) rules that permit reduced
disclosure for interim periods and, in the opinion of management, contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position as of March 31, 2001, the results of
operations for the three month period and changes in cash flows for the period
then ended. There were no material unusual charges or credits to operations
during the recently completed fiscal quarter.
The results reported for the three months ended March 31, 2001 are not
necessarily indicative of the results of operations which may be expected
for the entire year.
Note (2) Mortgage and Subsequent Sale and Lease Back of Corporate Training,
Development and Headquarters Facility
The Company entered into a second mortgage agreement on the headquarters
facility on June 16, 1999
with Area Realty, LLC, the eventual buyer of the building, for $100,000 at 11%
per annum. The principal and accrued interest were to be repaid in one
payment on the earlier of December 31, 1999 or the date upon which the
building was sold by the Company to Area Realty, LLC.
On August 6, 1999 the Company sold the facility to Area Realty, LLC for
$1,150,000 and signed a lease back agreement with the buyer for 7 years. As
part of the lease back agreement with the buyer of the facility, the Company
was required to place $80,000 on deposit with the buyer. The balance on the
first and second mortgages and all accrued interest were paid in full at the
time of the sale. The sale of the building resulted in a gain of
approximately $298,000 that the Company deferred and is recognizing as a
reduction to rent expense over the term of the lease. The monthly rent for
the first three years is $12,997. For years four through seven the monthly
base rent increases to $14,564. For the second through seventh year, rent may
be further increased by the percentage increase in the Consumer Price Index
for Urban Wage Earners and Clerical Workers for the preceding year up to a
maximum of three percent per annum.
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Overview
Pamet Systems, Inc. (the "Company" or "Pamet Systems"), founded in 1987,
designs and implements broad-based information technology solutions for public
safety agencies enabling them to realize cost efficiencies and provide better
service to the public. The foundation of the Company's fully integrated suite
of products is composed of three components: PoliceServer NT, FireServer NT,
and CADServer NT. The Company also offers several companion products
including Imaging, Mobile Access, Advanced Reporting, JailServer NT,
Investigator's Tool Kit and Mapping that are integrated with the police and
fire records management and computer-aided dispatch modules. Pamet Systems
total systems approach to public safety software allows the agency to enter
information once and have it available throughout the product suite. The
Company's revenues consist primarily of sales of these software applications,
the associated hardware and systems integration, and support and update
service fees.
The Company's revenues for the 3 month period ended March 31, 2001 (the 2001
period) decreased 38.8% to $242,329 from $395,861 for the 3 month period ended
March 31, 2000 (the 2000 period). In 2001, as in the past, the Company
experienced a slower first quarter due to the availability of municipal funds.
In the Northeast where the Company does the largest amount of its business,
the municipal fiscal year generally begins on July 1 which is when municipal
funds become available. In addition, the slowdown in the demand which the
Company began to feel in the second half of 2000 has continued into the first
quarter of 2001. Management believes that public safety agencies are
deferring decisions to replace aging and/or inadeqate technology
infrastructure and application software until economic conditions stabilize
and clear leadership emerges in the industry. Taking its cue from advances in
technology, the Company's core products were completely rebuilt using modern
design tools and databases, and the entire suite utilizes the Windows NT 32
bit technology and a GUI interface (graphical user interface). The Company
has spent over $4.9M during the past four years on the development of its
NT-based suite of products. Management believes that the magnitude of funding
required to develop new public safety software applications using state of the
art technologies will trigger a consolidation in the public safety
marketplace, which is dominated by small, privately held companies that will
have difficulty affording the development costs. Pamet System's NT product
development effort during the past four years positions the Company to be a
leader in the marketplace.
The Company's sales and marketing efforts are being focused in several areas.
First, using data gathered from marketing mailings, sales personnel are
actively pursuing public safety agencies using the software of weak
competitors. In most cases, these competitors have product lines employing
aging technology or lacking the ability to provide a complete solution for the
customer. The Company is also broadening the focus of its sales and marketing
efforts to reach new market segments. Pamet Systems is actively marketing to
larger, more technologically demanding agencies. The Company has submitted
several major proposals and has been selected as one of two or three finalists
in most cases. In addition, the NT product is being packaged and agressively
priced to meet the needs of smaller agencies. These efforts have resulted
in the largest pipeline of active prospects in the Company's history. The
Company includes in the pipeline prospective customers who have seen a product
demonstration, have expressed interest in the product, and expect to have
funding available.
Management continues to believe that significant market opportunities exist
for its suite of NT-based products. Major federal grant programs continue to
be announced that will allow agencies to update their computer systems. In
early 2001, the federal government announced COPSMore 2001, an $81M grant
program earmarked solely for public safety technology. Pamet Systems held
free grant seminars in the Northeast and Midwest to aid agencies in
understanding the grant application process and assisted approximately 200
agencies in preparing their applications, which is estimated to be about 10%
of the applications the Justice Department will receive. Management also
believes that it is possible that additional grant programs will be announced
as federal funding becomes available. In addition, the continuing growth in
the number of E911 centers, heightened emphasis on crime in most communities
and the awareness by municipalities that computer systems can improve the
efficiency and effectiveness of their public safety resources support the
belief that the market for the Company's products will continue to grow. The
Company has also seen increased emphasis on the coordination of public safety
systems between neighboring town, county, and state police organizations. The
Company's products are designed and marketed with the option to be used in
this type of regional application.
The primary challenges facing the Company during the year 2001 are to
capitalize on the design efforts that have resulted in a integrated suite of
NT-based products and to acquire adequate financing to fund immediate needs
and future growth. The Company has launched a major financing program with
the goal of raising $10M to $15M. The program is composed of a $1.5M private
placement to meet immediate cash needs with the remainder planned in a
secondary offering later in 2001 or in 2002. To date, the Company has secured
$550,625 of working capital from its private placement offering. However,
there are no assurances that the Company will be successful in completing its
fundraising program, in light of, among other things, the state of the
financial markets and the Company's historical financial performance. During
early 2001, the Company released major product enhancements and extensions
based, in part, on feedback from its NT customers. These releases improve the
product's ease of use and substantially extend its capabilities. As a result,
the Company has received certification from three states for our police
records system's incident-based reporting (NIBRS) capabilities and
certification from the Massachusetts Fire Marshall for the fire records
system's advanced national reporting (NIFRS 5.0) capabilities. The Company has
also developed utilities to convert customer data files from older systems,
which will ease the transition for agencies. As a result of these
improvements, the Company has a long list of current users waiting to migrate
to the NT system.
Despite what the Company believes are numerous growth opportunities, the
Company remains hampered by undercapitalization and the fact that its primary
market is the government sector, which is characterized by long lead times and
political influence in the decision making process. As a consequence, the
Company is pursuing an analysis of complementary markets and adaptations for
its products.
Three Months Ended March 31, 2001 vs. Three Months Ended March 31, 2000
Net sales in the 2001 period declined 38.8% or $153,532 to 242,329 from
$395,861 for the 2000 period. The revenues for the 2001 period were comprised
almost entirely of software support revenues as compared to 2000 revenues
which included one FireServer NT system, one Imaging system, and fourteen
add-on Mobile units in addition to support revenues. Support revenues
increased 27.3% to $230,693 for the 2001 period from $181,269 for the 2000
period reflecting the increase in the customer base from the 2000 period and
the increased rates billed for NT support. The contribution from support will
continue to increase in future periods as new customers, as well as those
existing customers that migrate to the NT product, will be charged higher
support fees. Current customers who migrate to the NT product previously paid
14% of the original VMS purchase price, but will now pay 19% of the current
list price for the new NT products at the time of conversion. Cost of product
decreased 68.7% or $90,457 to $41,305 for the 2001 period from $131,762 for
the 2000. The resulting increase in gross margin from from 66.7% in the 2000
period to 83.0% in the 2001 period can be attributed to the consistently high
margins delivered by support revenues.
Operating expenses decreased $201,143 or 19.8% to $813,118 for the 2001 period
compared to $1,014,261 for the 2000 period primarily due to decreases in
personnel spending and external research and development costs. Personnel
costs decreased 5.6% to $520,739 for the 2001 period from $551,342 for the
2000 period. The decrease in personnel spending is due to attrition and the
retirement of one employee. Due to the working capital constraints facing the
Company, certain non-key positions are not being immediately filled. Rent,
utilities and telephone decreased 5.8% to $54,826 for the 2001 period from
$58,220 for the 2000 period due primarily to decreases in telephone spending
as a result of lower rates. Travel and entertainment expenses decreased
$2,737 or 9.0% to $28,634 for the 2001 period from $30,371 for the 2000 period
reflecting slightly less spending in all areas. Professional fees increased
17.9% to $48,429 for the 2001 period from $41,082 for the 2000 period due to
increased legal fees resulting from an increase in services associated with
the ongoing private placement of debt and equity financing and joint ventures.
Depreciation and amortization expense remained constant at $28,355 for the
2001 period compared to $28,963 for the 2000 period.
External research and development costs during the 2001 period decreased
$138,641 or 62.1% to $84,731 from $223,372 in the 2000 period. However, gross
expenditures on research and development spending including the costs of
outside resources and the deployment of current staff to product development
and testing decreased only 30.1% to $275,691 in the 2001 period from $394,335
for the 2000 period. Due to cash constraints during the final stages of the
development cycle of the NT products, the Company continues to utilize outside
resources and employees hired on short-term contracts only on a selective
basis to accomplish product development goals. The Company is utilizing its
internal team of engineering and support resources to provide product
enhancements and extensions including interfaces to companion products,
utilities to migrate current customers from the VMS-based system to the
NT-based system, and advanced product capabilities.
Other operating expenses decreased 40.7% to $47,404 for the 2001 period from
$79,911 for the 2000 period primarily due to a decrease in the reserve for
doubtful accounts resulting from payment of some old invoices.
Net interest expense for the 2001 period increased to $50,067 from $38,154 in
the 2000 period. The 2000 period included the reversal of accrued interest
expense on $250,000 of convertible promissory notes converted to equity during
the period. As specified in the convertible promissory notes, the accrued
interest was not payable since the note was converted. There were no notes
converted in the 2001 period.
The net loss for the 2001 period was $(662,161) or $(.16) per share compared
to net loss of $788,316 or $(.24) per share for the 2000 period based on
weighted average shares outstanding for the period. The loss is due primarily
to decreased sales.
Liquidity and Capital Resources
The Company had working capital deficit of $(2,924,688) at March 31, 2001
compared to $(2,817,468) at December 31, 2000. The most significant reason
for this deterioration is the impact on receivables from lower sales in the
first quarter of 2001.
During the 2001 period, the Company secured $100,625 of additional equity
financing and $350,000 of long term debt financing. In addition, the Company
used an additional $70,000 on lines of credit from officers and directors
bringing the total drawn on lines of credit to $455,000 at March 31, 2001. At
March 31, 2001, $1,185,000 of convertible promissory notes and $166,186 of
related interest remained outstanding as liabilities. In general, the
outstanding convertible debt funding accrues interest at 11%; has a two year
term; carries the option of conversion of the principal to common stock by the
debt holder at conversion prices ranging from $0.75 to $2.50 per share, or
repayment of principal and accrued interest by the Company; and has 100%
warrant coverage attached that allows for the purchase of additional shares of
common stock at exercise prices ranging from $2.00 to $2.50 per share. The
Company's ability to repay the outstanding convertible promissory notes with
accrued interest on the due dates is at risk, especially the $425,000 due in
the current year. Failure of the Company to repay or renegotiate the notes
due in the current year could have a material adverse affect on the Company.
Cash increased to $56,957 at March 31, 2001 from $1,507 at December 31, 2000.
Accounts receivable decreased to $124,300 at March 31, 2001 from $224,191 at
December 31, 2000 due to the decrease in sales during the first quarter of
2001 as compared to the same period in 2000. The resources necessary to fund
the enhancements and extensions to the NT product and provide working capital
for operations continue to be a major concern for the Company. In the fourth
quarter of 2000, the Company launched a $1.5M private placement financing
program to meet immediate cash needs. The Company received $450,625 during
the 2001 period. Subsequent to the end of the period, the Company received an
additional $100,000 bringing the total received to date to $550,625. Late in
2000, the Company felt the effects of a slowdown in the general economic
conditions and within the public safety marketplace. However, with the newly
announced federal grant program COPSMore 2001 and the strong sales pipeline
resulting from the addition of sales and marketing resources, the Company is
optimistic about revenues in the second half of 2001. If additional funds are
required, the Board of Directors is willing to seek additional financing.
Nevertheless, the Company continues to be hampered by insufficient cash
resources. As noted in the Auditor's Report for 2000 included in the
Company's Annual Report on Form 10K, there can be no assurances that the
Company will be able to generate adequate cash either through operations or
additional financing to continue as a going concern. Failure to acquire the
necessary financing could have a material adverse effect on the Company.
Backlog at May 14, 2001 was approximately $820,000. The Company is continuing
to consider projects to increase its cash position such as activities to raise
capital, mergers, acquisitions or other business combinations.
As of March 31, 2001, the Company had accumulated approximately $11,600,000 of
federal net operating loss carryforwards that expire beginning in the year
2005. In addition, the Company has state net operating losses to carryforward
of $7,900,000 which expire between the years 2002 and 2005. Under the
Internal Revenue Code of 1986, as amended, the rate at which a corporation may
utilize its net operating losses to offset income for federal tax purposes is
subject to specified limitations during periods after the corporation has
undergone an "ownership change". It has been determined that an ownership
change did take place at the time of the Company's initial public offering.
However, the limitations on the loss carryforward exceed the accumulated loss
at the time of the "ownership change". Thus there is no restriction on its
use.
Seasonality
The majority of the Company's installed base has a fiscal year that
commences on July 1 and, therefore, the Company bills its customers for
their annual software support and update service on July 1 of each year.
Consequently, cash flow representing software support revenues has tended
to be higher in the second half of the Registrant's fiscal year, although
software support revenues are recognized ratably throughout the fiscal
year.
Revenue Recognition
Revenues from software license fees are recognized when a contract
has been executed, the product has been delivered, all significant
contractual obligations have been satisfied and collection of the related
receivable is probable. Maintenance revenues, including those bundled with
the initial license fee, are deferred and recognized ratably over the
service period. Consulting and training service revenues are recognized as
the services are performed.
Inflation
Inflation has not had a significant impact on the Company's
operations to date.
Forward Looking Statements
This Form 10-QSB contains statements that are not historical facts.
These statements may constitute "forward-looking statements" within the
meaning of the Securities Act of 1933 and the Securities and Exchange Act of
1934 as amended. Certain, but not necessarily all, of such forward-looking
statements can be identified by the use of such words as "believes",
"expects", "may", "will", "should", or "anticipates" or the negative thereof
or other variations thereon of similar terminology, and/or which include,
without limitation, statements regarding the following: competition and
consolidation in the public safety marketplace; market expectation for the NT
operating environment and customer acceptance of the Company's NT products;
ability of the NT product to meet market needs; volatility in sales and cash
flow; growth potential in the year 2001; law enforcement trends; availability
of grant funding for customers; adequacy of funding and corporate
infrastructure to support operations and anticipated growth; economic and
competitive factors affecting the public safety market; and discussions of
strategies involving risk and uncertainties that reflect management's current
views. These statements are based on many assumptions and factors and may
involve risks and uncertainties. The actual results of the Company or
industry results may be materially different from any future results expressed
or implied by such forward-looking statements because of factors such as
insufficient capital resources to operate the Company; inability to
successfully market and sell the NT product; changes in the marketplace
including variations in the demand for public safety software; and changes in
the economic and competitive environment. These factors and other information
contained in this Form 10-KSB could cause such views, assumptions and factors
and the Company's results of operations to be materially different. We
undertake no obligation to update publicly any forward-looking statements for
any reason even if new information becomes available or other events occur in
the future.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
c. Sales of Securities
The Company issued the following securities in transactions that were
exempt from the registration requirements of the Securities Act of
1933, as amended, pursuant to the exemptions afforded by Sections
4(2) or 3(a)(9) therof or Regulation S thereunder, because they did
not constitute sales under the Securities Act:
On February 21, 2001, the Company sold 80,500 shares of Pamet Systems
Common Stock for an aggregate price of $100,625 or $1.25 per share.
In connection with this agreement, the investor was granted a five
year warrant to purchase 28,175 shares of common stock at a price of
$2.50 per share.
Item 3 - Defaults Upon Senior Securities
Not applicable.
Item 4 - Submission of Matters to a vote of Security Holders
None
Item 5 - Other Information
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibits
4.30 Warrant issued to Alexandra O. Bjorklund Trust dated 2/21/01
b. Reports on form 8-K
None
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
Pamet Systems, Inc.
-------------------------
(Registrant)
May 15, 2001 (s) Richard C. Becker
_______________________________ ______________________
Date Richard C. Becker
Vice President
Principal Financial Officer