SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    -------

                                  FORM 10-KSB

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES AND EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005       Commission File Number 0-22597

                                 CIMNET(R), INC.
             (Exact name of registrant as specified in its charter)

    Delaware                                             52-2075851
    (State or other jurisdiction                      (I.R.S. employer
    of incorporation or organization)                 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
Securities registered pursuant to Section 12(b) of the Act:
                                      None

Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $.0001 per share

     Check whether the issuer is not required to file reports pursuant to
Section 13 or 15 (d) of Exchange Act. [ ]

     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 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 [ ]

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form , and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 126b-2 pf the Exchange Act) Yes [ ] No [X]

     Revenues for the Issuer's most recent fiscal year are $3,501,918

     The aggregate market value of the voting stock held by non-affiliates of
the Issuer as of March 22, 2006 was approximately $4,429,421 (based on a closing
price of $1.30 per share)

     The number of outstanding shares of the Issuer's common stock as of March
22, 2006 was 7,293,859 shares.

                      DOCUMENTS INCORPORATED BY REFERENCE:
     Part III incorporates certain information by reference from the
Registrant's Definitive Proxy Statement for the Registrant's Annual Meeting of
Stockholders to be held during the second quarter of 2006.
<PAGE>

                                 CIMNET(R), INC.

                                Table of Contents

                                                                            Page
                                                                            ----


PART I........................................................................ 2

      Item  1.   BUSINESS..................................................... 2
      Item  2.   PROPERTIES...................................................17
      Item  3.   LEGAL PROCEEDINGS............................................17
      Item  4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS...........17

PART II.......................................................................18

      Item  5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                 STOCKHOLDER MATTERS..........................................18
      Item  6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS...20
      Item  7.   FINANCIAL STATEMENTS.........................................27
      Item  8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                 ACCOUNTING AND FINANCIAL DISCLOSURE..........................27
      Item  8.A. CONTROLS AND PROCEDURES......................................27
      Item  8.B. OTHER INFORMATION............................................28


PART III......................................................................28

      Item  9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                 PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT...28
      Item 10.   EXECUTIVE COMPENSATION.......................................28
      Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                 MANAGEMENT AND RELATED STOCKHOLDER MATTERS...................28
      Item 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............28
      Item 13.   EXHIBITS, LISTS AND REPORTS ON FORM 8-K......................29
      Item 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.......................29
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Certain statements contained in this Annual Report on Form 10-KSB
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements included in this Annual Report, other than statements of
historical facts, regarding our strategy, future operations, financial position,
estimated revenues, projected costs, prospects, plans and objectives are
forward-looking statements. When used in this Annual Report, the words
"believe," "anticipate," "intend," "estimate," "expect," "project" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We cannot
guarantee future results, levels of activity, performance or achievements, and
you should not place undue reliance on our forward-looking statements. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including the risks
described in Part I - Risk Factors, and elsewhere in this Annual Report. Our
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or strategic investments. In
addition, any forward-looking statements represent our expectation only as of
the day this Annual Report was first filed with the SEC and should not be relied
on as representing our expectations as of any subsequent date. While we may
elect to update forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so, even if our expectations change.
<PAGE>

                                     PART I
                                     ------

Item 1. BUSINESS

     CIMNET(R) is a leading developer and marketer of process improvement
software solutions for the global manufacturing industry. Since the Company's
founding in 1984, CIMNET(R) has provided manufacturers with information and
communication software solutions for their production environment. The Company's
software solutions manage the collaboration between process information on the
shop floor and financial/logistical information in the office and supply chain.
In addition, CIMNET's(R) software solutions control and enhance a company's
production process inputs, improving manufacturing flexibility and lowering
production costs.

     Factelligence(R) is the Company's lead software solution and is used for
both discrete and process manufacturing. Factelligence(R) has been designed for
the aerospace, automotive, assembly, metals manufacturing, pharmaceutical,
medical devices, biotech, food and beverage and consumer packaged goods
industries.

     Our products utilize Microsoft and Oracle database technology to
electronically manage production schedules, process control, documents, product
quality, machine efficiency, material yields and labor time and attendance. They
help drive manufacturing standards and enable production to eliminate
variability in complex manufacturing operations. CIMNET's(R) products operate on
Windows(R) 95, 98, 2000, XP and NT.

     CIMNET(R) is proud to report that many of its clients are leading
manufacturers, including GE Power Systems, Alcoa, Johnson & Johnson, Raytheon,
Timken, Nestle Foods, Barber Foods, Caterpillar and Coca Cola. During the year
ended December 31, 2005, one of our customers accounted for approximately 31% of
our total billings.

Recent Developments

     CIMNET returned to profitability in 2005, due to increased market awareness
and demand for MES software; our staff dedication to producing a world class
product and the release of Factelligence IP in the fourth quarter of 2004, which
is receiving good market acceptance. Cimnet started implementing Factelligence
IP in multiple metals manufacturing plants during the year under a global
contract with a Fortune 100 metals company. We also continued to increase the
number of worldwide partners for the sale and implementation of our software.
During the first quarter of 2006, CIMNET was selected by two US based food
companies to implement Factelligence in pilot facilities. If successful, this
could result in global roll-outs of Factelligence across both companies'
production facilities, over approximately a five year period. Due to customer
demand, CIMNET has committed to releasing a version of Factelligence for the
Chinese market during the third quarter of 2006. We anticipate continued growth
during 2006 as CIMNET extends its footprint in the Manufacturing Execution
Systems (MES) space.

                                       2
<PAGE>

Factelligence Industrial Portal

     Factelligence IP first introduced in November 2004 is the industry's first
comprehensive "Suite" of completely integrated Manufacturing Execution, Business
Intelligence and HMI/SCADA software built on Microsoft's .NET technology. We
believe Factelligence IP fills an unmet market need by bringing together, under
a single brand, an interoperable, feature-rich set of tools capable of
revolutionizing factory floor management, using the evolving industry-standard
Microsoft technology. Factelligence IP uses a modular approach to package
CIMNET's applications; Manufacturing Execution Systems (MES), Human Machine
Interface, Supervisory Control and Data Acquisition (HMI/SCADA), and Business
Intelligence (BI).

     Factelligence IP is highly configurable enhancing companies' abilities to
achieve rapid rollout and ROI in the make-to-order, lean, outsourced or
collaborative manufacturing markets. It enables customers to build a real-time,
web centric information system that enhances supply chain visibility. Using
direct links into manufacturing equipment, it provides current information on
each step of the manufacturing process. This information allows customers to
make decisions that help develop a more efficient factory and to meet aggressive
deadlines.

     DNC Professional(TM): DNC refers to the technology used to connect groups
of NC (Numerically-Controlled) or CNC (Computer-Numerically Controlled) machine
tools to computer systems. Using digital instructions, these machines produce a
wide variety of precision parts, such as engine components, aircraft parts,
joint prostheses, and molds for other parts. DNC allows the transmission of part
programs to and from computers and machine tools.

     DNC Professional(TM), is the company's DNC system that provides a wide
variety of features and benefits to its users, including the ability to view and
edit electronically all of the documents and data that are required to perform
certain manufacturing functions. It also organizes these documents and data
utilizing a database (Oracle, Microsoft SQL Server, or dBase) that allows shop
floor personnel the ability to easily locate pertinent information easily and
quickly.

     We believe that DNC Professional(TM) was the first networked DNC system
that functioned in a mixed database/operating system environment. This open
system approach provides companies with existing hardware and networks to
upgrade to our fully functional MES solutions.

Industry Analysis

     We believe the factory floor is one of the few remaining domains within
Corporate America that has not effectively been integrated with the rest of the
organization. Increasing pressure on manufacturers for mass customization, lean
production techniques and reduced product delivery times can only be
accomplished by better integrating the factory floor with the rest of the
company's "front-office" systems.

                                       3
<PAGE>

     CIMNET(R)'s Manufacturing Execution Systems and other software solutions
that address these challenges are more broadly known throughout the industry as
Collaborative Production Management (CPM) or Manufacturing Execution Systems
(MES) solutions.

     While the Company refers to its' solutions using more traditional
nomenclature, Manufacturing Execution System (MES) and Collaborative Production
Management (CPM) are used interchangeably. The CPM concept encompasses a suite
of applications that includes visibility of real-time production status,
traceability and genealogy of manufactured product, performance analysis of
production operations, paperless management of the production process, and
operator instructions in the form of routings, ECNs (Engineering Change
Notices), BOMs (Bill of Materials), engineering documentation, and assembly
drawings. Increasingly, CPM also plays a platform or infrastructure role,
pulling together all plant operations systems and synchronizing them with
business systems.

     CPM is the application of collaborative manufacturing principles to the
management of manufacturing processes. Collaborative Production Management
normally refers to the synchronizing, executing, tracking, reporting and
optimizing of manufacturing processes. Production management systems are not
standalone. While performing the production-centric functions of planning,
controlling, optimizing, and informing, they must integrate with plant floor
control systems and business systems.

     The transition in the nature of manufactured goods from one of long,
homogeneous production runs to shorter, more customized products has created the
need for new and improved manufacturing processes. To achieve this objective,
manufacturers must develop better links between the demand for its products on
the front end and the factory floor resources used to produce those products
(manufacturing plants, supply chain) on the other end. CPM products, and
specifically the Company's Suite of software solutions, are specifically
designed for this purpose. The complex CPM software is programmed to optimize
coordination between functions throughout the organization, and functions on the
factory floor. The coordination provided by CPM software is instrumental if
companies want to achieve their objective of mass customization of manufactured
products.

     The Company's software solution and implementation experience encompass a
wide variety of healthy manufacturing industries including food & beverage,
pharmaceutical, medical devices, automotive, aerospace and consumer packaged
goods. These industries are all under competitive pressures to reduce
manufacturing costs through better utilization of resources, reduction in
inventories, elimination of scrap/waste, and improvements in labor productivity
and the entire supply chain. In addition, certain industries, such as
pharmaceutical and food and beverage, are facing heightened regulation,
especially the FDA's 21 CFR Part 11 concerning Electronic Recordkeeping and
Electronic Signatures.

                                       4
<PAGE>

  [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR GRAPH IN THE PRINTED MATERIAL]

                                 CPM - Discrete
                                 CAGR  15.20%

(millions)
                   2005      2006      2007       2008        2009        2010
                   ----      ----      ----       ----        ----        ----
CPM - Discrete   $676.30   $779.30   $897.90   $1,034.60   $1,192.20   $1,373.80


Figure 1 Source: ARC Advisory Group

     According to the latest ARC Advisory Group statistics, the Company's total
addressable CPM discrete market is expected to increase to approximately $1.37
billion in 2010, a compound annual growth rate of 15.20% over the next several
years (See Figure 1).

     The United States has an extremely large manufacturing sector and, due to
constraints such as product shelf-life and transportation costs, certain
industries will always need to locate their factories close to their products'
end markets. While these factors ensure the continued existence of many
manufacturing industries, the survival of individual plants, and individual
companies for that matter, still depends on their ability to improve
productivity and efficiency. Companies are now realizing that a more competitive
plant is not simply a function of the latest equipment or the largest facility.
An efficient, effective plant is more likely the result of better coordination
with the supply chain, reduced waste and increased speed, among other reasons.

     Therefore, despite concerns about the demise of the United States
manufacturing sector, there is an abundant, growing and accessible market for
the Company's factory floor automation software solutions both domestically and,
as the Company's business grows, internationally.

                                       5
<PAGE>

  [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR GRAPH IN THE PRINTED MATERIAL]

                                 CPM - Process
                                 CAGR  11.80%

(millions)
                   2005       2006       2007       2008       2009       2010
                   ----       ----       ----       ----       ----       ----
CPM - Process   $1,307.00  $1,450.00  $1,623.80  $1,835.10  $2,052.80  $2,278.30


Figure 2 Source: ARC Advisory Group

     According to the latest ARC Advisory Group statistics, the Company's total
addressable CPM Process market is expected to increase to approximately $2.27
billion in 2010, a compound annual growth rate of 11.80% over the next several
years (See Figure 2).

     The fragmented nature of the market arose as result of the diverse
information technology needs of various manufacturing industries, and there
remains less standardization across products than what is typically found in
many other applications. Historically, many solutions were originally developed
by industry generalists, such as food and beverage, or pharmaceuticals software
programmers that developed various customized products for their clients in
response to specific requests. They then packaged their factory automation
product and sold it to other companies in the same industry. Solutions providers
also tended to develop products for specific applications, such as HMI/SCADA or
CPM. Therefore, having come at the market from a variety of different
directions, no one company, or group of companies, has been able to dominate the
market.

                                       6
<PAGE>

     Figures 1 and 2 illustrate how the Company's core Manufacturing Execution
System (or Collaborative Production Management) solutions address an existing
$1.98 billion market that is expected to grow to $3.65 billion by 2010. The
Company's integrated HMI/SCADA solution addresses a separate $500 million Human
Machine Interface Market that according to ARC Research is expected to grow
better than 4% per year over the next several years. In the first quarter of
2005, the Company released its Business Intelligence module, a new solution
targeted at the $2.2 billion Enterprise Performance Management market. While
these markets have traditionally been served by their own set of focused
solutions providers, the Company's unified Factelligence IP Suite has the
potential to capture a small percentage of these markets. With the manufacturing
sector recovering and competitive pressures continuing to mount, overall
spending on total factory floor automation software spending is expected to
increase.

     The Manufacturing Execution Systems (MES) software solution market is
essentially in its infancy. However, there are signs that growth may be on the
verge of accelerating. The recent manufacturing slump of 2001-2004 appears to
have stabilized. In addition, we believe companies are lifting the IT spending
moratorium that severely constrained technology spending the last few years.

     We believe that this confluence of events is creating opportunity for
factory automation software solutions providers with leading edge products that
are easy to implement, simple to operate and that provide better control of the
factory floor.

     The competitive pressures on manufacturers has intensified which we
anticipate will create a demand for software solutions that can improve a
manufacturers' ability to efficiently coordinate customer orders into the
manufacturing supply chain. The Company's Factelligence(R) software solution
provides manufacturers in a variety of industries with a configurable,
out-of-the-box software solution that may improve their competitiveness.

Sales and Marketing

     In 2006, the Company plans to increase its use of partners worldwide. The
Company believes it can add an additional six sales and integration partners for
its Factelligence software during 2006.

     Historically, the Company has marketed its software solutions primarily
through its own direct sales force. The Company also markets through a limited
number of licensed reseller agreements with CPM distributors and systems
integrators. Recently, market coverage has been provided by the Company's 5
direct sales employees and approximately 6 integration partners worldwide. The
Company also has an employee dedicated to developing corporate partnerships and
strategic alliances.

                                       7
<PAGE>

     The Company plans to expand its marketing reach utilizing a unique
multi-channel distribution strategy consisting of: (1) an expanded and
strengthened direct sales force; and; (2) a distribution channel created through
agreements with established factory floor automation software distributors and
integrators. The Company believes that a multi-channel distribution strategy
will provide far greater marketing reach and deeper penetration of a broader
range of industry vertical market segments.

Subscription Model

     CIMNET offers two models for software acquisition: perpetual licensing or
subscription licensing. In the subscription model, the customer purchases
CIMNET's Factelligence on an annual license basis. Licensing provides the
appropriate number of concurrent users for the Factelligence modules and
applications required. All software is loaded, installed and maintained locally
at the customer's facility. The only difference between the perpetual and
subscription acquisition is that the subscription licensing expires after a
fixed time period (i.e. one year) unless the subscription is renewed. The cost
per year for Factelligence for the customer facility includes the license to use
the software for that period of time and includes standard maintenance and
support coverage.

Maintenance and Support

     We believe that high quality customer service and support are integral
components of the application solutions we offer. Therefore, we offer a range of
fee-based training, installation, consulting, and maintenance services to
facilitate the installation and use of our software.

     We offer annual maintenance contracts for all of our hardware and software
products to our customers. The hardware maintenance contract provides our
customers with next-day replacement of the hardware product that has failed
regardless of the reason. Purchasers of our software maintenance contracts are
provided with free software updates as available, and internet access to our web
site to obtain information on latest software releases and new features from us.

     Hardware and software maintenance contracts include unlimited telephone
support. For customers not covered by a maintenance contract, we offer telephone
technical support, which can be purchased per incident or for a flat annual fee.

Research and Development

     We devote a substantial portion of our resources to developing new products
and product features, extending and improving our products and technology, and
researching new technological initiatives in the market for manufacturing
automation software. This market is characterized by rapid technological change,
new product introductions and enhancements, evolving industry standards and
rapidly changing customer requirements. The introduction of products
incorporating new technologies and the emergence of new industry standards could
render existing products obsolete and unmarketable. Our future success will
depend in part on our ability to anticipate changes, enhance our current
products, develop and introduce new products that keep pace with technological
advancements and address the increasingly sophisticated needs of our customers.

                                       8
<PAGE>

     As of March 30, 2006, we had 21 full-time employees, two part-time
employees, and 2 consultants engaged in research and development activities.
During the years ended December 31, 2005, and 2004, we spent $1,276,228, and
$1,083,849, respectively, on research and development. We expect to continue to
commit significant resources to research and development in the future. To date,
no research and development costs have been capitalized. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Competition

     The market for our products is rapidly evolving, and is expected to become
increasingly competitive as current competitors expand their product offerings
and new companies enter the market. The principal competitive factors in the PC
based manufacturing automation software market include:

     o    Adherence to emerging operating system standards;
     o    Comprehensive applications;
     o    Adaptability, flexibility and scalability;
     o    Real-time, interactive capability internally and with vendors and
          suppliers
     o    Integration with a variety of communications media;
     o    Ease of use;
     o    Ease of implementation; and
     o    Customer service, support and price.

     Although we believe that we currently compete favorably with respect to
these factors, there can be no assurance that we can maintain our competitive
position against current and potential competitors, especially those with longer
operating histories, greater name recognition and substantially greater
financial, technical, marketing, management, service, support and other
resources.

     CIMNET's current competitors include a number of companies offering one or
more solutions for the manufacturing software automation market, some of which
are directly competitive with CIMNET's products. For example CIMNET's
competitors in the DNC market include InterCim, Greco Systems and Predator. In
the MES market space, CIMNET's key competitors include Camstar, Rockwell
Automation, Invensys, Siemens and GE Fanuc. We also may face competition from
systems integrators and consulting firms which design and develop custom
software and systems. Some of these firms may possess industry-specific
expertise or reputations among potential customers for offering solutions to a
manufacturing need.

                                       9
<PAGE>

Intellectual Property and Proprietary Rights

     Our success and competitiveness are dependent to a significant degree on
the protection of our proprietary technology. We rely primarily on a combination
of copyrights, trademarks, licenses, trade secret laws and restrictions on
disclosure to protect our intellectual property and proprietary rights. We
generally control access to and distribution of our documentation and other
proprietary information. Despite these precautions, others may be able to copy
or reverse engineer aspects of our products, to obtain and use information that
we regard as proprietary or to independently develop similar technology. Any
such actions by competitors could have a material adverse effect on our
business, operating results and financial condition.

     In addition, the laws of some foreign countries do not protect our
proprietary rights to the same extent as do the laws of the United States, and
effective patent, copyright, trademark and trade secret protection may not be
available in these jurisdictions.

     Litigation may be necessary in the future to enforce or defend our
intellectual property and proprietary rights, to protect our trade secrets or to
determine the validity and scope of the intellectual property and proprietary
rights of others. This litigation, whether successful or unsuccessful, could
result in substantial costs and diversion of management and technical resources,
either of which could have a material adverse effect on our business, operating
results and financial condition.

     We attempt to avoid infringing known intellectual property and proprietary
rights of third parties in our product development efforts. However, we have not
conducted and do not conduct comprehensive patent searches to determine whether
the technology used in products infringes patents held by third parties. In
addition, product development is inherently uncertain in a rapidly evolving
technological environment in which there may be numerous patent applications
pending, many of them which are confidential when filed, with regard to similar
technologies.

     In June 1992, our predecessor company, J.N.L. Industries, Inc. registered
the CIMNET(R) trademark with the U.S. Patent and Trademark Office for
International Class 9. In order to maintain the effectiveness of a trademark
registration, the Patent and Trademark Office requires that an affidavit be
filed with the Patent and Trademark Office within the fifth year following
registration confirming continued use of the trademark. We failed to file an
affidavit in 1997, and therefore, our registration of the "CIMNET(R)" trademark
lapsed. However, in August 1999, we filed another application with the Patent
and Trademark Office for the "CIMNET(R)" trademark, and reinstatement of our
ownership of the trademark was obtained.

     In January of 2002, CIMNET(R) filed an application to register the
Factelligence(R) trademark with the U.S. Patent and Trademark Office for
International Class 9. Registration of the Factelligence(R) trademark was
granted to CIMNET(R) in December of 2003.

                                       10
<PAGE>

     There can be no assurance that infringement or invalidity claims arising
from the incorporation of third party technology, and claims for indemnification
from CIMNET's(R) customers resulting from these claims, will not be asserted or
prosecuted against CIMNET(R). These claims, even if not meritorious, could
result in the expenditure of significant financial and managerial resources in
addition to potential product redevelopment costs and delays, all of which could
materially adversely affect our business, operating results and financial
condition.

Employees

     As of March 30, 2006, we had 33 employees, of which 2 are part-time
employees, including 23 in research and development of new software, and
implementation; 7 in sales and marketing; 1 in developing corporate partnerships
and strategic alliances, and 3 in operations and order processing. In addition
we had 2 consultants working on research and development of new software.

Risk Factors

     In addition to other information in this Annual Report on Form 10-KSB, the
following important factors should be carefully considered in evaluating the
Company and its business because such factors currently have a significant
impact on the Company's business, prospects, financial condition and results of
operations.

Risks Related To Our Business
-----------------------------

     We Have Incurred Substantial Losses And We May Not Be Profitable In The
Future. During the fiscal years ended December 31, 2005, 2004, and 2003 we
reported a net income of $98,675, and net losses of ($1,203,578), and
($2,052,396) respectively. Through December 31, 2005, our accumulated deficit
equaled $4,264,056. Although we reported a net profit during the 2005 fiscal
year, we cannot be certain that we will remain profitable in the future. Failure
to remain profitable may adversely affect our ability to conduct business and
the market price of our common stock.

     We May Need Additional Capital, and We Cannot Be Sure That Additional
Financing Will Be Available. Historically, we have funded our operating losses
and capital expenditures through proceeds from private equity and debt
financings. During 2004, we issued shares of our common stock and common stock
purchase warrants in a private placement and borrowed funds from John
Richardson, our Chief Executive Officer and founder, to fund our on- going
operations. Although we currently anticipate that our available funds and cash
flow from operations will be sufficient to meet our cash needs for the immediate
future, we may require additional financing. Our ability to obtain financing
will depend, among other things, on our development efforts, business plans,
operating performance and condition of the capital markets at the time we seek
financing. We cannot assure you that additional financing will be available to
us on favorable terms when required, or at all. If we raise additional funds
through the issuance of equity, equity-linked or debt securities, those
securities may have rights, preferences or privileges senior to the rights of
our common stock, and our stockholders may experience dilution. If adequate
funds are not available, the Company may be required to delay, scale back or
eliminate its operational plans. Our inability to obtain additional financing
could have a material adverse effect on the Company's business, financial
condition, prospects and results of operations.

                                       11
<PAGE>

     The Demand For Manufacturing Software Seems To Have Strengthend During The
Past Year, But Could Weaken Significantly In the Future, Depending On The Future
Economic Climate. The market for our manufacturing software strengthened during
2005, but could change rapidly in the coming years depending on the economic
climate. The market for advanced manufacturing automation software declined
dramatically during 2002, 2003 and 2004 and there is no gauruntee the
strengthening we have seen in the last year will continue. Many manufacturing
companies have experienced financial difficulties or uncertainty, and as a
result have canceled or delayed spending on technology initiatives. These
companies typically are not demonstrating the same urgency regarding technology
initiatives. If companies cancel or delay their business and technology
initiatives because of the current or future economic climate, or for other
reasons, our business, financial condition and results of operations would be
materially and adversely affected.

     Our Quarterly Operating Results May Fluctuate Because We Depend On A Small
Number Of Large Orders From A Limited Number Of Customers. We derive a
significant portion of our software license and service revenue in each quarter
from a small number of relatively large orders. Our operating results for a
particular fiscal period could be materially adversely affected if we are unable
to complete one or more substantial license sales planned for that period.
During the year ended December 31, 2005, one customer accounted for
approximately 31% of our total revenue and during the year ended December 31,
2004 another customer accounted for approximately 14% of our total revenue. In
addition, the purchase and implementation of our products typically involve a
significant cost to our customers, including the purchase of related hardware
and software, as well as training and integration costs. These implementations
also include a substantial commitment of resources by our customers or their
consultants over an extended period of time. As a result, our sales cycle is
relatively long. Our services revenue, which is largely correlated with our
license revenue, has fluctuated and may fluctuate in the future due to
significant consulting and implementation services performed in a quarter.

     We Have Significant Fixed Operating Costs, Which May Be Difficult To Adjust
In Response To Unanticipated Fluctuations In Revenues. A high percentage of our
operating expenses, particularly personnel, rent and depreciation, are generally
fixed in advance of any particular quarter. As a result, an unanticipated
decrease in the number or average size of, or an unanticipated delay in the
scheduling for, our software sales may cause significant variations in operating
results in any particular quarter and could have a material adverse effect on
operations for that quarter.

     An unanticipated termination or decrease in size or scope of product sales,
a client's decision not to proceed with a purchase we anticipated or the
completion during a quarter of several major sales could require us to maintain
underutilized employees and could have a material adverse effect on our
business, financial condition and results of operations. Our revenues and
earnings may also fluctuate from quarter to quarter because of such factors as:

     o    the contractual terms and timing of completion of software product
          sales;
     o    any delays incurred during software test periods;
     o    loss of key highly skilled personnel necessary to complete software
          sales and implementations; and
     o    general economic conditions.

                                       12
<PAGE>

     Intense Competition From Other Software Companies May Adversely Affect Our
Financial Condition And Operating Results. The market for personal computer
based manufacturing automation software applications is intensely competitive.
If we are unable to compete effectively, our business, financial condition and
operating results would be materially adversely affected. Many of our current
and potential competitors have longer operating histories, greater name
recognition and substantially greater financial, technical, marketing,
management, service, support and other resources than we do. Therefore, they may
be able to respond more quickly than we can to new or changing opportunities,
technologies, standards or customer requirements. In addition, we expect that
new competitors will enter the market with competing products as the size and
visibility of the market opportunity increases. We also expect that competition
will increase as a result of software industry consolidations and formations of
alliances among industry participants. Increased competition could result in
pricing pressures, reduced margins or the failure of our products to achieve or
maintain market acceptance.

     Manufacturers May Decrease Or Delay Their Use Of Automation Software As A
Means For Improving Productivity. Our future success depends heavily on the
acceptance and use of manufacturing automation software as a means for
manufacturers to enhance productivity and to otherwise streamline operations. We
develop and implement manufacturing automation software. If use of this software
does not grow, or grows more slowly than expected, our revenues could be less
than we anticipate and our business, financial condition and results of
operations could be materially adversely affected. Manufacturers may delay
adoption of manufacturing automation software for a number of reasons,
including:

     o    inability to implement and sustain profitable business models using
          our software;
     o    inadequate network infrastructure or other hardware necessary to run
          our software;
     o    delays in the development or adoption of new technical standards and
          protocols required to handle increased levels of usage;
     o    adoption of new laws and regulations applicable to new technologies
          and electronic commerce by federal, state or international governments
          that hinder the growth of new technologies; or
     o    failure of manufacturers to record sufficient sales to warrant
          improving their manufacturing facilities.

     Loss Of Key Personnel Could Adversely Affect Our Business. Our future
success depends to a significant degree on the skills, experience and efforts of
John D. Richardson, III, our founder, Chairman of the Board and Chief Executive
Officer, Anthony Crouch our Chief Technology Officer, and Jason Dietrich our
Vice President of Sales. The loss of the services of Mr. Richardson, Mr. Crouch
or Mr. Dietrich could have a material adverse effect on our business, operating
results and financial condition. We also depend on the ability of our executive
officers and other members of senior management to work effectively as a team.
The loss of one or more of our executive officers and other members of senior
management could have a material adverse effect on our business, operating
results and financial condition.

                                       13
<PAGE>

     We May Be Unable To Hire And Retain The Skilled Personnel We Need To
Succeed. Qualified personnel are in great demand throughout the software
industry. The demand for qualified personnel is particularly acute in our area
because of a limited supply of skilled workers within commuting distance of our
headquarters in Robesonia, Pennsylvania. Our success depends in large part upon
our ability to attract, train, motivate and retain highly skilled employees,
particularly marketing personnel, software engineers and other senior personnel.
Our failure to attract and retain the highly- trained technical personnel that
are integral to our product development, sales and marketing and support teams
may limit the rate at which we can develop new products or product enhancements.
This could have a material adverse effect on our business, operating results and
financial condition.

     We May Be Unable To Protect Our Proprietary Technology Rights. Our success
depends to a significant degree upon the protection of our software and other
proprietary technology rights. We rely on trade secret, copyright and trademark
laws and confidentiality agreements with employees and third-parties, all of
which offer only limited protection. Moreover, the laws of other countries in
which we market our products may afford little or no effective protection of our
proprietary technology. The reverse engineering, unauthorized copying or other
misappropriation of our proprietary technology could enable third parties to
benefit from our technology without paying us for it. This could have a material
adverse effect on our business, operating results and financial condition. If we
resort to legal proceedings to enforce our intellectual property rights, the
proceedings could be burdensome and expensive and could involve a high degree of
risk.

     Claims By Other Companies That Our Products Infringe Their Copyrights Or
Patents Could Adversely Affect Our Financial Condition. If any of our products
violate third party proprietary rights, we may be required to engineer our
products or seek to obtain licenses from third parties to continue offering our
products without substantial reengineering. Any efforts to reengineer our
products or obtain licenses from third parties may not be successful and, in any
case, would substantially increase our costs and have a material adverse effect
on our business, operating results and financial condition. We do not conduct
comprehensive patent searches to determine whether the technology used in our
products infringes patents held by third parties. In addition, product
development is inherently uncertain in a rapidly evolving technological
environment in which there may be numerous patent applications pending, many of
which are confidential when filed, with regard to similar technologies. See
"Business -- Intellectual Property and Proprietary Rights."

     Our Use of the "CIMNET(R)" and "Factelligence(R)" Trademarks May Infringe
the Trademark Rights of Other Companies. Our use of "CIMNET(R)" and
"Factelligence(R)" as well as the use of other names, may result in costly
litigation, divert management's attention and resources, cause product shipment
delays or require CIMNET(R) to pay damages and/or to enter into royalty or
license agreements to continue to use a product name. CIMNET(R) may be required
to stop using the name "CIMNET(R)", "Factelligence(R)" or other names currently
used for its products. Any of these events could have a material adverse effect
on our business, operating results and financial condition.

                                       14
<PAGE>

     We May Lose Access To Third-Party Technology Used In Our Products. We
incorporate into our products technology licensed from third parties, such as
Oracle Corp. The loss of access to this technology could result in delays in the
development and introduction of new products or enhancements until equivalent or
replacement technology could be accessed, if available, or developed internally,
if feasible. These delays could have a material adverse effect on our business,
operating results and financial condition. It is possible that technology from
others will not be available to us on commercially reasonable terms, if at all.

     Our Business Could Be Adversely Affected If Our Products Fail To Perform
Properly. Software products as complex as ours may contain undetected errors, or
bugs, which result in product failures, or otherwise fail to perform in
accordance with customer expectations. Our products may be particularly
susceptible to bugs or performance degradation because of the emerging nature of
manufacturing automation software technologies. Product performance problems
could result in loss of or delay in revenue, loss of market share, failure to
achieve market acceptance, diversion of development resources or injury to our
reputation, any of which could have a material adverse effect on our business,
operating results and financial condition. We warrant some of our products for
one year, providing customers a right to refund a portion of the license fee if
we are unable to correct an error in the product. To date, no customer has
requested a refund under the warranty provisions. However, if we are required to
refund significant portions of license fees, our business, operating results and
financial condition could be materially adversely affected.

     We Could Incur Substantial Costs As A Result Of Product Liability Claims
Relating To Our Customers' Critical Business Operations. Our products are
frequently critical to the operations of our customers' businesses. Despite
employing software license agreements that significantly limit our liability, if
one of our products fails, a customer may assert a claim for substantial damages
against us, regardless of our responsibility for such failure. Product liability
claims could require us to spend significant time and money in litigation or to
pay significant damages. Although we maintain general liability insurance,
including coverage for errors and omissions, there can be no assurance that such
coverage will continue to be available on reasonable terms or will be available
in amounts sufficient to cover one or more large claims, or that the insurer
will not disclaim coverage as to any future claim.

Risks Related To Our Common Stock
---------------------------------

     Disappointing Quarterly Revenue Or Operating Results Could Cause The Price
Of Our Common Stock To Fall. Our quarterly revenue and operating results are
difficult to predict and may fluctuate significantly from quarter to quarter. If
our quarterly revenue or operating results fall below the expectations of
investors or securities analysts, the price of our common stock could fall
substantially.

                                       15
<PAGE>

     Our quarterly revenue may fluctuate as a result of a variety of factors,
including the following:

     o    the market for manufacturing automation software operating on personal
          computers is in its preliminary stage of development and it is
          therefore difficult to accurately predict customer demand; and

     o    The sales cycle for our products and services varies substantially
          from customer to customer, and we expect the sales cycle to be long.

     As a result, we have difficulty determining whether and when we will
receive license revenue from a particular customer. In addition, because our
revenue from implementation, maintenance and training services is largely
correlated with our license revenue, a decline in license revenue could also
cause a decline in our services revenue in the same quarter or in subsequent
quarters.

     Most of our expenses, such as employee compensation and rent, are
relatively fixed in the short term. Moreover, our expense levels are based, in
part, on our expectations regarding future revenue levels. As a result, if
revenue for a particular quarter is below our expectations, we could not
proportionately reduce operating expenses for that quarter, and therefore this
revenue shortfall would have a disproportionate effect on our expected operating
results for that quarter.

     Our Common Stock Is Particularly Subject To Volatility Because Of The
Industry That We Are In. The stock market in general has recently experienced
extreme price and volume fluctuations. In addition, the market prices of
securities of technology companies, particularly software companies, have been
extremely volatile, and have experienced fluctuations that have often been
unrelated or disproportionate to the operating performance of such companies.
These broad market fluctuations could adversely affect the market price of our
common stock

     The Significant Control Over Stockholder Voting Matters Which May Be
Exercised By Our Executive Officers And Directors Will Deprive You Of The
Ability To Influence Corporate Actions. John D. Richardson, our founder, Chief
Executive Officer and Chairman of the Board controls approximately 44.7% of the
outstanding shares of common stock. As a result, he will be able to exercise
significant control over all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions.
This concentration of ownership may have the effect of delaying, preventing or
deterring a change in control of CIMNET(R), could deprive our stockholders of an
opportunity to receive a premium for their common stock as part of a sale of
CIMNET(R) and might affect the market price of our common stock.

     Future Sales By Existing Security Holders Or Issuances Of Securities By The
Company Could Depress The Market Price Of Our Common Stock. If the Company or
our existing stockholders sell a large number of shares of our common stock (or
securities convertible into or, exercisable for, shares of common stock), the
market price of our common stock could decline significantly. Moreover, the
perception in the public market that the Company or our existing stockholders
might sell shares of common stock could depress the market price of our common
stock.

                                       16
<PAGE>

     We Are Subject To Anti-Takeover Provisions And The Terms And Conditions Of
Our Preferred Stock Financing That Could Delay Or Prevent An Acquisition And
Could Adversely Affect The Price Of Our Common Stock. Our certificate of
incorporation and bylaws, certain provisions of Delaware law and the certificate
of designation governing the rights, preferences and privileges of our Series A
Preferred Stock may make it difficult in some respects to cause a change in
control of our company and replace incumbent management. For example, the holder
of our Series A Preferred Stock has the right to designate one member of our
board of directors, and it also has a number of voting rights pursuant to the
terms of the certificate of designation which could potentially delay, defer or
prevent a change of control. In particular, the holders of our Series A
Preferred Stock have the right to approve a number of actions by us, including
some types of mergers, consolidations, acquisitions and similar transactions,
and this right may create a potentially discouraging effect on, among other
things, any third party's interest in completing these types of transactions
with us. Consequently, the terms and conditions under which we issued our
preferred stock, coupled with the existence of other anti-takeover provisions,
may collectively have a negative impact on the price of our common stock, may
discourage third-party bidders from making a bid for our company or may reduce
any premiums paid to our stockholders for their common stock.

     In addition, our board of directors has the authority to fix the rights and
preferences of, and to issue shares of, our preferred stock, which may have the
effect of delaying or preventing a change in control of our company without
action by our stockholders.


Item 2. PROPERTIES.

     Our principal facility is a 7,500 square foot building in Robesonia,
Pennsylvania. The building is owned by John D. Richardson, our founder, Chief
Executive Officer and Chairman of the Board and leased on a month to month
basis. The monthly rent paid by the Company to Mr. Richardson is $10,000 which
we consider to be no greater than market rate for comparable space. We believe
our current facility will not be adequate to meet our future business
requirements, and we are currently negotiating for suitable space.

Item 3. LEGAL PROCEEDINGS.

     We are not presently a party to any material legal proceedings nor are any
material legal proceedings presently threatened against us.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

     No matters were submitted to a vote of the holders of the Company's Common
Stock during the last quarter of its fiscal year ended December 31, 2005.

                                       17
<PAGE>

                                     PART II
                                     -------

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Our shares of Common Stock were quoted since May 28, 1998 on the OTC
Bulletin Board under the symbol "WTNR" and since July 2, 1999 under the symbol
"CIMK". However, the trading market for our Common Stock is extremely limited.
CIMNET(R) has not historically paid dividends on shares of its common stock and
does not anticipate paying dividends on its shares of common stock during the
next year.

     The following table sets forth the range of high and low bid quotations for
our Common Stock, for the two year period ended December 31, 2005 as reported by
the OTC Bulletin Board. The quotes represent inter-dealer prices without
adjustment or mark-ups, mark-downs or commissions and may not necessarily
represent actual transactions. In the future, the trading volume of our common
stock may be extremely limited (or non-existent). As a result, the liquidity of
an investment in our common stock may be adversely affected.

                                  Common Stock

                            High    Low                             High    Low
                            ----    ---                             ----    ---
          2005                                    2004
          ----                                    ----

     Quarter ended                           Quarter ended
     March 31, 2005        $0.80   $0.40     March 31, 2004        $1.08   $0.62

     Quarter ended                           Quarter ended
     June 30, 2005         $0.82   $0.55     June 30, 2004         $0.94   $0.27

     Quarter ended                           Quarter ended
     September 30, 2005    $0.95   $0.61     September 30, 2004    $0.70   $0.38

     Quarter ended                           Quarter ended
     December 31, 2005     $0.90   $0.52     December 31, 2004     $0.57   $.37

     On March 30, 2006, the final quoted prices as reported by the OTC Bulletin
Board was $1.30 for each share of Common Stock. As of March 22, 2006, there were
7,293,859 shares of Common Stock outstanding, held of record by approximately 71
record holders.

                                       18
<PAGE>

Equity Compensation Plan Information

     The following table summarizes our equity compensation plans as of December
31, 2005:

<TABLE>
<CAPTION>
                                         Equity Compensation Plan Information
                                         ------------------------------------

                                                                          (b)                          (c)
                                                                    Weighted-average          Number of securities
                                                (a)                     exercise             remaining available for
                                      Number of securities to           price of              future issuance under
                                     be issued upon exercise of       outstanding           equity compensation plans
                                        outstanding options,       options, warrants         (excluding securities
Plan category                           warrants and rights            and rights           reflected in column (a))
==================================  ============================= ===================== =============================
<S>                                          <C>                          <C>                       <C>
Equity compensation plans or
arrangements approved by
security holders                              1,062,500                   $1.00                      1,407,500

Equity compensation plans or
arrangements not approved by
security holders                                200,000                   $2.00                         ------

Total                                        1, 262,500                   $1.16                     1, 407,500
---------------------------------------------------------------------------------------------------------------------
</TABLE>

Recent Sales of Unregistered Securities

     During the year ended December 31, 2005 there were no new equity securities
issued and during the years ended December 31, 2004, the Company sold the
following equity securities that were not registered under the Securities Act of
1933, as amended:

     In August 2004, the Company issued in a private transaction pursuant to
Section 4(2) of the Securities Act of 1933, as amended, 20,000 shares of its
Common Stock to a financial advisor for services rendered.

     In July 2004, the Company sold units ("Units") in a private placement
transaction to a limited number of investors. Each Unit consisted of 100,000
shares of Common Stock and 100,000 Class A Common Stock Purchase Warrants (the
"Class A Warrants"), and sold for a purchase price of $50,000 per unit. The
Company paid no commissions or other fees and received proceeds of $360,000 from
the offering. The Class A Warrants are exercisable for a period of five (5)
years at an exercise price of $1.00 per share. The investors in the Units have
piggyback registration rights, and included certain officers and directors: Lynn
Richardson, the wife of John Richardson, the Chief Executive Officer of the
Company (2 Units); Karl Gerhart, a director of the Company (1 Unit); and J.
Jeffrey Fox, a director of the Company (1/5 Unit).

                                       19
<PAGE>

     On May 24, 2004, the Company granted options to purchase 12,500 shares of
the Company's common stock to each of J. Jeffrey Fox and Sundaresh Ramayya as
compensation for serving as a director of the Company. The options are
exercisable at $.33 per share for a period of five (5) years commencing on May
24, 2005.

     On January 12, 2006, the Board of Directors of Cimnet, Inc.. (the
"Company") authorized the issuance of options to purchase a total of 525,000
shares of the Company's common stock as compensation to certain executive
officers, employees and outside directors of the Company. Each of the options
are exercisable at $.60 per share (the closing price of the Company's common
stock on the date of issuance), vest immediately and are exercisable for a
period of 5 years.

     The following officers and directors were granted options: Jason Dietrich,
the Company's Vice President- Sales (100,000 options); Tony Crouch, the
Company's Chief Technology Officer (100,000 options); and J. Jeffery Fox, Karl
D. Gerhart, Sundaresh Ramayya , and David Birk, each of whom is a member of the
Company's Board of Directors (12,500 options each). The options were issued
under the Company's 2002 Stock Option Plan and pursuant to Section 4(2) of the
Securities Act of 1933, as amended.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
        OPERATIONS

Statements in this "management's discussion and analysis of financial condition
and results of operations" and elsewhere in this document as well as statements
made in press releases and oral statements that may be made by the company or by
officers, directors or employees of the company acting on the company's behalf
that are not statements of historical or current fact constitute "forward
looking statements" within the meaning of the private securities litigation
reform act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other unknown factors that could cause the actual
results of the company to be materially different from the historical results or
from any future results expressed or implied by such forward-looking statements.
In addition to statements which explicitly describe such risks and
uncertainties, readers are urged to consider statements labeled with the terms
"believes", "belief", "expects", "intends", "anticipates" or "plans" to be
uncertain forward-looking statements. The forward looking statements contained
herein are also subject generally to other risks and uncertainties that are
described from time to time in the company's reports and registration statements
filed with the Securities and Exchange Commission.

                                       20
<PAGE>

RESULTS OF OPERATIONS

Year Ended December 31, 2005 Compared To Year Ended December 31, 2004

     Net Sales for the year ended December 31, 2005 were $3,501,918, an increase
of 46.5% or $1,110,961 over net sales for the year ended December 31, 2004. This
increase is due to the overall market upturn in MES (Manufacturing Execution
System) sales along with the Company's Subscriptions sales model for
Factelligence receiving increased market acceptance resulting in new orders and
increased revenues.

     Costs of goods sold for 2005 were 10% of net sales at $340,775 compared to
12% of net sales in 2004 at $283,567, representing a 2% decrease in Costs of
Goods sold as percentage of net sales in 2005 over the same period in 2004.

     Gross profit for 2005 was $3,161,143 compared to $2,107,390 for 2004, an
increase of $1,053,753 or 50.0% which is consistent with the increase in net
sales and cost of goods sold.

     Selling, general and administrative expenses for 2005 were $1,755,030 or
50.1 % of net sales compared to $1,923,231 or 80.4% of net sales, for 2004, a
decrease of $168,201 or 8.7%. The decrease is primarily attributable to the
changes in the following categories that were directly attributable to the
Company's cost cutting measures: travel and entertainment decreased by $63,326,
other general and administrative expenses decreased by $151,992. However these
decreases in the above mentioned areas were offset by increases in some other
areas; specifically independent contractor fees increased by $52,362 in order to
meet the needs of some overseas sales contracts. Stock compensation expense
decreased by $53,641 since there were no remaining expenses for stock options
related to consulting and legal services.

     In 2005 research and development costs were $1,276,228 compared to
$1,083,849 in 2004, an increase of $192,379 or 17.7% from the previous year.
This increase is due to employment of additional programmers in the third and
fourth quarter of 2005 to support the programming demands of increased orders
from various customers. However the drop in research and development costs as a
percentage of net sales from 45.3% in 2004 to 36.4% in 2005, is attributable to
the increase in net sales of 46.5% in 2005 over 2004.

     Income from operations for 2005 was $128,803 compared to loss of ($954,413)
in 2004, an increase of $1,083,216 over the previous year. This increase is
predominantly due to the previously discussed increase in sales, combined with a
lower percentage in cost of goods sold and a decrease in operating expenses.

     Net interest expense for 2005 was $58,068 or 1.7% of net sales, compared to
net interest expense of $22,888 or 1.0% of net sales for 2004. This $35,180
increase is attributable to the interest paid both on the outstanding line of
credit and on the demand note payable to an officer/director. The Company
increased borrowings on its outstanding credit line by $319,932 during 2005.

     In 2004 there was realized loss on the sale of available for sale
securities of approximately $115,000. In 2005 there was no such transaction.

                                       21
<PAGE>

     In 2005 miscellaneous income, in the form of a commission earned from
assisting an individual to find a buyer for the shares of the Company stock that
they owned, was $27,940 or 0.8% of net sales. In 2004, the Company recognized
rental income of $17,521 related to an aircraft. The Company disposed of this
aircraft and interest in a related limited partnership during 2004 resulting in
a loss of $128,663. There were no such transactions during 2005. In 2004, the
Company sold all of its remaining available for sale securities.

     No provision for income taxes was recorded in 2005 or 2004. In 2004, tax
benefits arising from the Company's net loss were off-set by a valuation
allowance recorded due to the uncertainty as to the Company's ability to realize
net operating loss carry-forwards that are available to offset taxable income in
future periods, such benefits have been fully reserved at December 31, 2005 and
2004. In 2005, the Company has utilized a portion of its available net operating
loss carry-forwards to off-set current year taxable income, but has continued to
carry a valuation allowance for a majority of its deferred tax assets. Based
upon the cumulative losses from prior years, and the late turn around in 2005,
the Company has analyzed future taxable income and has deemed it prudent to
maintain the valuation allowance at this time but will continue to reevaluate
the valuation allowance in future periods based upon business and results of
operations.

Year Ended December 31, 2004 Compared To Year Ended December 31, 2003

     Net Sales for the year ended December 31, 2004 were $2,390,957, an increase
of 1.9% or $45,063 over net sales for the year ended December 31, 2003.

     Costs of goods sold for 2004 were $283,567 compared to $280,077 for 2003,
an increase of $3,490 or 1.2% which corresponds with the increase in net sales.

     Gross profit for 2004 was $2,107,390 compared to $2,065,817 for 2003, an
increase of $41,573 or 2.0% which is consistent with the increase in net sales
and cost of goods sold.

     Selling, general and administrative expenses for 2004 were $1,923,231 or
80.4 % of net sales compared to $2,275,973 or 97.0% of net sales, for 2003, a
decrease of $352,742 or 15.5%. This decrease is due to the continuation and
enhancement of cost cutting measures started by the Company in 2003. The
decrease is primarily attributable to the changes in the following categories:
salaries decreased by $157,260 due to cuts in the number of employees and
reduced salaries; commissions decreased by $51,475 due to modifications in
commission structures; legal expenses decreased by $51,150, travel and
entertainment costs decreased by $52,412; however these decreases in the above
mentioned areas were offset by increases in some other areas; specifically
advertising and marketing increased by $86,528 due to the promotions of new
products.

     Stock compensation relating to employee compensation, consulting and legal
services decreased by $72,651, which resulted from a decrease in the number of
options that vested during 2004. Additionally, in 2003, options with a value of
$36,000 were issued to the Company's legal counsel.

                                       22
<PAGE>

     In 2004 development costs were $1,083,849 compared to $1,621,835 in 2003, a
decrease of $537,986 or 33.8% from the previous year. This is primarily due to a
decrease in the number of employees, and also due to the Company not utilizing
any contract employees for research and development purposes during 2004.
Specifically, salary expense decreased by $406,530 in 2004, a decrease of 29.5%
from 2003.

     Loss from operations for 2004 was ($954,413) compared to ($1,959,365) in
2003, a decrease of $1,004,952 or 51.3% from the previous year. This decrease is
primarily due to the reduction of salary expense for both the selling, general
and administrative, and the research and development areas, as previously
discussed.

     Net interest expense for 2004 was $22,888 or 1.0% of net sales, compared to
net interest expense of $5,947 or 0.3% of net sales for 2003. In 2004 the
Company had borrowed on the credit line throughout the year and therefore paid
interest during all twelve months, whereas in 2003 the Company had borrowed on
the credit line only during the last five months of the year, thus incurring
less interest expense. In addition, in 2004 there was only $1,092 earned
interest on the short term investments and cash balances held with the bank,
whereas, in 2003 other income also included interest earned and dividend income,
in the amount of $6,675, on the short term investments and cash balance held
with the bank.

     Realized loss on the sale of securities was approximately $115,000 versus
approximately $176,000 in 2003. These losses arose as the Company sold its
interests in its available for sale securities as cash flow needs arose in
operations. At December 31, 2004, the Company no longer holds any investments in
securities available for sale.

     During 2004, the Company disposed of its interest in a limited partnership,
gave up its interest in an aircraft and was relieved of its portion of a note
payable associated with the aircraft. These transactions generated a loss of
approximately $129,000 for the year ended December 31, 2004. Also, rental income
in 2003 included a full year of rental income associated with the aircraft,
whereas 2004 includes rental activity only through the date at disposition.

     There was no income tax benefit in 2004 compared to the income tax benefit
of ($36,357) for 2003. The income tax benefit was not recognized due to the
uncertainty of the Company's ability to realize net operating loss
carry-forwards that are available to offset taxable income in future years. The
Company has approximately $1.4 million of deferred tax assets the majority of
which have been reserved at December 31, 2004. The necessity to carry all or a
portion of this allowance will be considered as circumstances change over future
periods.

     Net loss for 2004 was ($1,203,578) or ($0.19) per share of common stock
(basic and diluted) as compared to a net loss of ($2,052,396) or ($0.35) per
share (basic and diluted) of common stock in 2003. This decrease in loss is
primarily due to the reduction of salary expense for both the selling, general
and administrative, and the research and development areas along with reductions
in other operating expenses as a result of cost cutting measures taken by the
Company.

                                       23
<PAGE>

Liquidity and Capital Resources

     At December 31, 2005, the Company had current assets of $1,216,369 versus
$773,663 at December 31, 2004, an increase of $442,706 or 57.2%. This increase
is due primarily to an increase of $556,568 in receivables, associated with
increased sales activity.

     Current liabilities were $2,226,863 at December 31, 2005 versus $1,847,547
at December 31, 2004, an increase of $379,316. This increase is primarily due an
increase of $319,932 on the credit line and additional accrued dividends of
$46,667.

Operating Activities

     Cash used in operations for fiscal 2005 and 2004 was ($331,088) and
($654,167), respectively. This decrease of $323,079 in the cash used by
operations was primarily attributable to the change in net income of $98,675 in
2005 versus a net loss of $1,203,578 in 2004 partially offset by an increase of
$562,393 in accounts receivables in 2005

Investing Activities

     Cash used in investing activities was $79,895 in 2005 as compared to
$199,441 of cash provided by investing activities in 2004. This change is
primarily due to the proceeds of $260,362 received from the sale of available
for sale securities in 2004. There was no such sale of securities in 2005.

Financing Activities

     Financing activities provided $299,315 in 2005 compared to $472,738 in
2004, a decrease of $173,423 in cash provided by financing activities. Even
though net borrowing on the line of credit increased by $319,932 in 2005 this
was still less than the combined amount of $360,000 raised from issuance of
common stock through a private placement and $130,000 from a demand note
borrowing from a stockholder, in 2004.

Capital Resources

     The Company has a $750,000 line of credit with a bank. Interest is payable
monthly at the bank's prime interest rate plus 1.75%. The balance of outstanding
borrowings was $661,000 and $341,068 at December 31, 2005 and 2004,
respectively. The line of credit is subject to annual renewal on April 30, 2006,
at which time the availability of the line is scheduled to decrease to $500,000.
The line of credit is collateralized by a first lien security interest in all
business assets and an unlimited personal guarantee of a shareholder. This line
includes a financial covenant that requires the Company to maintain a certain
tangible net worth. The Company was not in compliance with this covenant at
December 31, 2005. However, a waiver was obtained from the bank on March 30,
2006. As of December 31, 2005, the Company had $89,000 available on its line of
credit

                                       24
<PAGE>

     In July 2004, the Company entered into a Revolving Credit Agreement with
Sundaresh Ramayya, a director of the Company, pursuant to which Mr. Ramayya
agreed to lend to the Company up to $2 million, but not more than $150,000 under
any borrowing request submitted by the Company. The Company agreed to pay
interest on any outstanding amount at a rate of 4% per annum, payable quarterly,
and the outstanding principal amount was to be due and payable on the maturity
date which was on the second anniversary of the Agreement (unless accelerated
upon an event of default). However, Mr. Ramayya had the right to terminate the
Revolving Credit Agreement upon 15 days prior written notice to the Company at
which time the obligation of Mr. Ramayya to lend to the Company would terminate.
As of August 10, 2005, the Company and Mr. Ramayya terminated the Revolving
Credit Agreement. At that time there was no outstanding balance thereunder.
There were no fees or expenses paid by the Company in connection with the
execution or termination of the Revolving Credit Agreement.

     In December 2004, the Company borrowed $130,000 in the form of a demand
note payable to an officer/director. The secured demand note is payable upon
demand from the officer/director and bears interest at the prime rate plus 1%.
Monthly interest payments are made based on the prime rate for the period. On
April 5, 2005, the Company repaid $20,000 on this loan reducing the outstanding
balance to $110,000 as of April 5, 2005. This note is subordinated to the
Company's line of credit with its bank lender. The Company anticipates repaying
the Note in full in 2006.

     The Company has no material commitments for capital expenditures at
December 31, 2005 and believes that its cash from operations, existing balances
and available credit lines will be sufficient to satisfy the needs of its
operations and its capital commitments for the near future.

Application of Critical Accounting Policies:

     Disclosure of the Company's significant accounting policies is included in
Note 2 to the audited financial statements. Certain of these policies are
particularly sensitive requiring judgments, estimates and assumptions to be made
by management. Senior management has discussed the development of such
estimates, and related Management Discussion and Analysis disclosure, with the
board of directors. The following accounting policies are the ones identified by
management to be critical to the results of operations:

     Revenue Recognition - The Company generates revenue principally from the
following sources:

     Sale of Software Subscription: CIMNET offers two models for software
acquisition: perpetual licensing or subscription licensing. In the subscription
model, the customer purchases CIMNET's Factelligence on an annual license basis.
Licensing provides the appropriate number of concurrent users for the
Factelligence modules and applications required. All software is loaded,
installed and maintained locally at the customer's facility. The only difference
between the perpetual and subscription acquisition is that the licensing will
expire after one year unless the subscription is "renewed." The cost per year
for Factelligence for the customer facility includes the license to use the
software for that period of time and includes Standard maintenance and support
coverage. Revenue on software subscriptions is recognized ratably over the term
of the subscription agreement.

                                       25
<PAGE>

     Sale of Software and Hardware: Revenues are recorded when software or
hardware products are shipped and are recorded net of allowance for estimated
returns, price concessions and other discounts. A change in these estimates
could impact the results of operations in future periods.

     Sale of Services: Revenues for services (installation, engineering and
training) are recognized when services are completed.

     Sale of 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.

     The Company follows the provisions of the American Institute of Certified
Public Accountants (AICPA) Statement of Position 97-2, "Software Revenue
Recognition," as well as the SEC staff Accounting Bulletin 101, "Revenue
Recognition in Financial Statements."

     Goodwill - Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets." Under SFAS No. 142, goodwill and other intangible assets with
indefinite lives are no longer amortized but are reviewed annually or more
frequently if impairment indicators arise. Based upon such review, management
determined that no write-down of goodwill was required as of December 31, 2005.

     Software Development Costs - Under the criteria set forth in SFAS No. 86,
"Accounting for 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 during 2005.

     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.

     Stock Options and Warrants - Under SFAS No. 123, "Accounting for
Stock-Based Compensation," a fair value-based method for valuing stock-based
compensation is set forth that entities may use, which measures compensation
cost at the grant date based on the fair value of the award.

                                       26
<PAGE>

     SFAS No. 123 permits entities to continue accounting for employee stock
options and similar equity instruments under Accounting Principles Board (APB)
Opinion 25, "Accounting for Stock Issued to Employees." The Company accounts for
its employee stock option plans under APB Opinion No. 25. Entities that continue
to account for stock options using APB Opinion 25 are required to make pro forma
disclosures of net income and earnings per share, as if the fair-value based
method of accounting defined in SFAS No. 123 had been applied. The ability for
companies to continue to choose to account for employee equity instruments under
the guidance of APB Opinion No. 25 has ended as of December 31, 2005. As of
January 1, 2006, the Company will be required to account for such employee
equity instruments by measuring compensation cost at the grant date of such
awards based upon their value and results of the Company's operations will
include expense based upon the fair value of vesting period of the award.

Item 7. FINANCIAL STATEMENTS

     See Financial Statements following Item 14 of this Annual Report on Form
10-KSB.

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     None.

Item 8A. CONTROLS AND PROCEDURES

     We maintain disclosure controls and procedures that are designed to ensure
that information required to be disclosed in our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Principal Accounting Officer, as appropriate, to
allow for timely decisions regarding required disclosure. In designing and
evaluating the disclosure controls and procedures, management recognizes that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

     As required by SEC Rule 13a-15(b), we carried out an evaluation as of
December 31, 2005, under the supervision and with the participation of our
management, including our Chief Executive Officer and Principal Accounting
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the year covered by this report. Based
on the foregoing, our Chief Executive Officer and Principal Accounting Officer
concluded that our disclosure controls and procedures were effective at the
reasonable assurance level.

                                       27
<PAGE>

     There has been no change in our internal controls over financial reporting
during our fiscal year ended December 31, 2005 that has materially affected, or
is reasonably likely to materially affect, our internal controls over financial
reporting.

Item 8.B. OTHER INFORMATION

     None.


                                    PART III
                                    --------

Item 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Incorporated herein by reference to the Company's proxy statement to be
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934.

Item 10. EXECUTIVE COMPENSATION

     Incorporated herein by reference to the Company's proxy statement to be
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

     Incorporated herein by reference to the Company's proxy statement to be
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Incorporated herein by reference to the Company's proxy statement to be
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934.


                                       28
<PAGE>

Item 13. EXHIBITS,

(a) Exhibits.
Exhibits

3.01*     Certificate of Incorporation of CIMNET(R).
3.02*     By-laws, as amended, of CIMNET(R).
3.03*     Certificate of Designation of the Rights, Preferences and Limitations
          of Series A Convertible Preferred Stock of the Company.
4.01*     Specimen Certificate for shares of CIMNET(R)'s Common Stock.
10.01*    1999 Stock Plan, as amended.
10.02*    Lease Agreement for the executive offices.
10.03*    Preferred Stock and Warrant Purchase Agreement dated as of August 31,
          2001 by and between the Company and the Purchaser.
10.04*    Common Stock Purchase Warrant dated as of August 31, 2001 issued by
          the Company to the Purchaser.
10.05*    Registration Rights Agreement dated as of August 31, 2001 by and
          between the Company and the Purchaser.
10.06*    Voting Agreement dated as of August 31, 2001 by and among the
          Purchaser, the Company and John D. Richardson.
10.07*    2002 Stock Option Plan, as amended.
10.08*    Form of Notice of Grant of Stock Options and Stock Option Agreement
31.0      Certification of Chief Executive Officer and Principal Accounting
          Officer Pursuant to Section 302 of Sarbanes-Oxley of 2002.
32.0      Certification of Chief Executive Officer and Principal Accounting
          Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

----------
* Previously filed with the Securities and Exchange Commission.

(b) Reports on Form 8-K

     None.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Incorporated herein by reference to the Company's proxy statement to be
filed pursuant to Regulation 14A under the Securities and Exchange Act of 1934.

                                       29
<PAGE>

                                  CIMNET, INC.

                                FINANCIAL REPORT


                                DECEMBER 31, 2005
<PAGE>

TABLE OF CONTENTS
December 31, 2005


                                                                           PAGE
                                                                           ----

FINANCIAL STATEMENTS:

     Report of Independent Registered Public Accounting Firm................32
     Balance Sheets.........................................................33
     Statements of Operations...............................................35
     Statements of Changes in Stockholders' Equity..........................36
     Statements of Cash Flows...............................................37
     Notes to Financial Statements..........................................39

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders
Cimnet, Inc.


     We have audited the accompanying balance sheets of Cimnet, Inc. as of
December 31, 2005 and 2004, and the related statements of operations,
stockholders' 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 the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 Cimnet, Inc. as of December
31, 2005 and 2004, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.


                                                    /s/ Beard Miller Company LLP


Beard Miller Company LLP
Reading, Pennsylvania
March 15, 2006, except for Note 5 as to which the date is March 30, 2006.

                                       32
<PAGE>

CIMNET, INC.
================================================================================
BALANCE SHEETS
December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                           2005           2004
                                                                       ------------   ------------
<S>                                                                    <C>            <C>
                                     ASSETS

CURRENT ASSETS

     Cash and cash equivalents                                         $     43,985   $    155,653
     Accounts receivable, net of allowance for doubtful accounts
         2005 $22,295; 2004 $16,470                                         869,492        312,924
     Inventories                                                             97,209         98,430
     Prepaid expenses                                                        65,264         66,237
     Deferred income tax assets                                             140,419        140,419
                                                                       ------------   ------------

         Total Current Assets                                             1,216,369        773,663

PROPERTY AND EQUIPMENT, NET                                                 258,759        310,731

GOODWILL                                                                  2,364,145      2,364,145

OTHER ASSETS                                                                 95,333         50,000
                                                                       ------------   ------------


         Total Assets                                                  $  3,934,606   $  3,498,539
                                                                       ============   ============
</TABLE>

See notes to financial statements.

                                       33
<PAGE>

<TABLE>
<CAPTION>
                                                                                       2005            2004
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

     Line of credit                                                                $    661,000    $    341,068
     Demand note payable, stockholder                                                   110,000         130,000
     Current portion of capital lease obligations                                        15,714          10,010
     Current portion of long-term debt                                                    6,592               0
     Accounts payable                                                                    97,864         133,770
     Accrued expenses                                                                    84,317          64,333
     Dividends payable on preferred stock                                               312,667         266,000
     Deferred income                                                                    938,709         902,366
                                                                                   ------------    ------------

         Total Current Liabilities                                                    2,226,863       1,847,547

LONG-TERM DEBT, NET OF CURRENT PORTION                                                    5,350               0

CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                                        20,285          21,974
                                                                                   ------------    ------------

         Total Liabilities                                                            2,252,498       1,869,521
                                                                                   ------------    ------------

STOCKHOLDERS' EQUITY

     Preferred stock, $.0001 8% cumulative convertible; 5,000,000 shares                     75              75
         authorized; 746,965 shares issued and outstanding
     Common stock, $.0001 par value; 15,000,000 shares authorized; 7,293,859
         shares issued and outstanding                                                      729             729
     Paid-in capital                                                                  5,945,813       5,945,813
     Accumulated deficit                                                             (4,264,056)     (4,316,064)
     Deferred stock compensation                                                           (453)         (1,535)
                                                                                   ------------    ------------

         Total Stockholders' Equity                                                   1,682,108       1,629,018
                                                                                   ------------    ------------

         Total Liabilities and Stockholders' Equity                                $  3,934,606    $  3,498,539
                                                                                   ============    ============
</TABLE>


                                       34
<PAGE>

CIMNET, INC.
================================================================================
STATEMENTS OF OPERATIONS
Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                                      2005            2004
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
NET SALES                                                                         $  3,501,918    $  2,390,957

COST OF GOODS SOLD                                                                     340,775         283,567
                                                                                  ------------    ------------

         Gross Profit                                                                3,161,143       2,107,390
                                                                                  ------------    ------------

OPERATING EXPENSES
     Selling, general and administrative                                             1,755,030       1,923,231
     Stock compensation - employees, consulting and legal services                       1,082          54,723
     Research and development                                                        1,276,228       1,083,849
                                                                                  ------------    ------------

         Total Operating Expenses                                                    3,032,340       3,061,803
                                                                                  ------------    ------------

         Operating Income (Loss)                                                       128,803        (954,413)
                                                                                  ------------    ------------

OTHER INCOME (EXPENSES)

     Interest expense, net                                                             (58,068)        (22,888)
     Miscellaneous income                                                               27,940               0
     Rental income                                                                           0          17,521
     Loss on disposition of investment in limited partnership and equipment                  0        (128,663)
     Realized loss on the sale of available for sale securities                              0        (115,135)
                                                                                  ------------    ------------

         Total Other Income (Expenses)                                                 (30,128)       (249,165)
                                                                                  ------------    ------------

         Income (Loss) before Income Tax Benefit                                        98,675      (1,203,578)

INCOME TAX BENEFIT                                                                           0               0
                                                                                  ------------    ------------

         Net Income (Loss)                                                        $     98,675     ($1,203,578)
                                                                                  ============    ============

NET INCOME (LOSS) PER COMMON SHARE - BASIC                                        $       0.01          ($0.19)
                                                                                  ============    ============

NET INCOME (LOSS) PER COMMON SHARE - DILUTED                                      $       0.01          ($0.19)
                                                                                  ============    ============
</TABLE>

See notes to financial statements.

                                       35
<PAGE>

CIMNET, INC.
================================================================================
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>

                                                  Preferred Stock              Common Stock                           Retained
                                            --------------------------   -------------------------     Paid-in        Earnings
                                               Shares         Amount        Shares        Amount       Capital       (Deficit)
                                            -----------    -----------   -----------   -----------   -----------    -----------
<S>                                             <C>                <C>     <C>                <C>     <C>           <C>
BALANCE - DECEMBER 31, 2003                     746,965            $75     6,553,859          $655    $5,557,761    ($3,002,737)


 Comprehensive loss:
    Net loss                                          0              0             0             0             0     (1,203,578)
    Change in unrealized loss on
       available for sale securities                  0              0             0             0             0              0


   Total Comprehensive Loss


 Stock compensation expense                           0              0             0             0             0              0
 Consulting and legal service expense,
      fair value of shares of common
      stock, options and warrants granted             0              0        20,000             2        12,998              0
 Issuance of common stock                             0              0       720,000            72       359,928              0
 Dividends and accretion on preferred
    stock                                             0              0             0             0        29,749       (109,749)
 Forfeiture of unvested stock options                 0              0             0             0       (14,623)             0
                                            -----------    -----------   -----------   -----------   -----------    -----------

BALANCE - DECEMBER 31, 2004                     746,965             75     7,293,859           729     5,945,813     (4,316,064)

 Net income                                           0              0             0             0             0         98,675
 Stock compensation expense                           0              0             0             0             0              0
 Dividends on preferred stock                         0              0             0             0             0        (46,667)
                                            -----------    -----------   -----------   -----------   -----------    -----------

BALANCE - DECEMBER 31, 2005                     746,965            $75     7,293,859          $729    $5,945,813    ($4,264,056)
                                            ===========    ===========   ===========   ===========   ===========    ===========


<CAPTION>
                                            Accumulated
                                               Other         Deferred
                                            Comprehensive      Stock
                                                Loss       Compensation      Total
                                            -----------    -----------    -----------
<S>                                           <C>             <C>          <C>
BALANCE - DECEMBER 31, 2003                   ($174,481)      ($59,881)    $2,321,392
                                                                          -----------

 Comprehensive loss:
    Net loss                                          0              0     (1,203,578)
    Change in unrealized loss on
       available for sale securities            174,481              0        174,481
                                                                          -----------

   Total Comprehensive Loss                                                (1,029,097)
                                                                          -----------

 Stock compensation expense                           0         43,723         43,723
 Consulting and legal service expense,
      fair value of shares of common
      stock, options and warrants granted             0              0         13,000
 Issuance of common stock                             0              0        360,000
 Dividends and accretion on preferred
    stock                                             0              0        (80,000)
 Forfeiture of unvested stock options                 0         14,623              0
                                            -----------    -----------    -----------

BALANCE - DECEMBER 31, 2004                           0         (1,535)     1,629,018

 Net income                                           0              0         98,675
 Stock compensation expense                           0          1,082          1,082
 Dividends on preferred stock                         0              0        (46,667)
                                            -----------    -----------    -----------

BALANCE - DECEMBER 31, 2005                          $0          ($453)    $1,682,108
                                            ===========    ===========    ===========
</TABLE>

See notes to financial statements.

                                       36
<PAGE>

CIMNET, INC.
================================================================================
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                                2005            2004
                                                                            ------------    ------------
<S>                                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

     Net income (loss)                                                      $     98,675     ($1,203,578)
     Adjustments to reconcile net income (loss) to net cash
         used in operating activities:
            Depreciation and amortization                                        103,108          97,434
            Realized loss on sale of securities                                        0         115,135
            Loss on disposition of investment in limited
               partnership and equipment                                               0         128,663
            Provision for doubtful accounts                                        5,825            (552)
            Provision for deferred income taxes                                        0           8,294
            Stock issued, consulting services                                          0          11,000
            Stock options, employees                                               1,082          43,723
            Stock options and warrants, consulting and legal services                  0           2,000
            (Increase) decrease in assets:
               Accounts receivable                                              (562,393)         95,736
               Inventories                                                         1,221          (3,589)
               Prepaid expenses                                                      973          (8,983)
               Income taxes receivable                                                 0          98,313
            Increase (decrease) in liabilities:
               Accounts payable                                                  (35,906)         30,483
               Accrued expenses                                                   19,984          (4,635)
               Deferred income                                                    36,343         (63,611)
                                                                            ------------    ------------

              Net Cash Used in Operating Activities                             (331,088)       (654,167)
                                                                            ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES

     Investment in limited partnership                                                 0          (7,000)
     Purchase of software licensing agreement                                    (60,000)        (50,000)
     Purchase of property and equipment                                          (19,895)         (3,921)
     Proceeds from the sale of available for sale securities                           0         260,362
                                                                            ------------    ------------

              Net Cash Provided by (Used in) Investing Activities                (79,895)        199,441
                                                                            ------------    ------------
</TABLE>

See notes to financial statements.

                                       37
<PAGE>

CIMNET, INC.
================================================================================
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                            2005          2004
                                                                         ----------    ----------
<S>                                                                      <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES

     Principal payments on long-term borrowings                          ($   1,558)     ($27,330)
     Principal payments on capital lease obligations                        (12,559)
     Principal payments on demand note payable, stockholder                 (20,000)            0
     Proceeds from long-term borrowings                                      13,500             0
     Proceeds from demand note payable, stockholder                               0       130,000
     Proceeds from issuance of common stock and warrants                          0       360,000
     Net borrowings on line of credit                                       319,932        10,068
                                                                         ----------    ----------

              Net Cash Provided by Financing Activities                     299,315       472,738
                                                                         ----------    ----------

              Net Increase (Decrease) in Cash and Cash Equivalents         (111,668)       18,012

CASH AND CASH EQUIVALENTS - BEGINNING                                       155,653       137,641
                                                                         ----------    ----------

CASH AND CASH EQUIVALENTS - ENDING                                           43,985    $  155,653
                                                                         ==========    ==========

SUPPLEMENTARY CASH FLOWS INFORMATION

     Interest paid                                                       $   58,737    $   23,980
                                                                         ==========    ==========

     Income taxes refunded                                               $        0    $  125,684
                                                                         ==========    ==========

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING
     AND FINANCING ACTIVITIES

     Equipment acquired through capital lease obligations                $   16,574    $   31,984
                                                                         ==========    ==========

     Debt forgiven on disposal of equipment                              $        0    $  159,442
     Net book value of equipment disposed                                         0      (203,605)
     Net book value of investment in limited partnership                          0       (84,500)
                                                                         ----------    ----------

              Loss on Disposition of Investment in Limited
                  Partnership and Equipment                              $        0     ($128,663)
                                                                         ==========    ==========
</TABLE>

See notes to financial statements.

                                       38
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 1 - NATURE OF BUSINESS

          Cimnet, Inc. (the Company) is in the business of the development, sale
     and maintenance of computer integrated manufacturing software. The Company
     also is engaged in the resale of hardware that is incidental to the
     operation of its software products. The Company's software is a
     manufacturing execution system, which enables factories to monitor work
     flows and manufacturing processes. The Company also sells subscriptions of
     its Factelligence software product. The Company's office is located in
     Robesonia, Pennsylvania, and the Company has sales throughout the United
     States and abroad. Approximately 76% and 79% of the sales for the years
     ended December 31, 2005 and 2004, respectively, were throughout the United
     States. Credit is granted on terms that the Company establishes for
     individual customers.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Revenue Recognition

               The Company generates revenue principally from the following
               sources:

                    Software Subscription

                    Revenue on software subscriptions is recognized ratably over
                    the term of the subscription agreement.

                    Software and Hardware

                    Revenues are recorded when software or hardware products are
                    shipped and are recorded net of allowance for estimated
                    returns, price concessions and other discounts.

                    Services

                    Revenues for services (installation, engineering and
                    training) are recognized when services are 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.

               The Company follows the provisions of the American Institute of
               Certified Public Accountants (AICPA) Statement of Position 97-2,
               "Software Revenue Recognition," as well as the SEC staff
               Accounting Bulletin 101, "Revenue Recognition in Financial
               Statements."

                                       39
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Accounts Receivable

               Accounts receivable are stated at outstanding balances, less an
               allowance for doubtful accounts. The allowance for doubtful
               accounts is established through provisions charged against
               income. Accounts deemed to be uncollectible are charged against
               the allowance and subsequent recoveries, if any, are credited to
               the allowance. The allowance for doubtful accounts is maintained
               at a level considered adequate to provide for losses that can be
               reasonably anticipated. Management's periodic evaluation of the
               adequacy of the allowance is based on past experience, agings of
               the receivables, adverse situations that may affect a customer's
               ability to pay, current economic conditions and other relevant
               factors. This evaluation is inherently subjective as it requires
               estimates that may be susceptible to significant change. Unpaid
               balances remaining after the stated payment terms are considered
               past due.

          Inventories

               Inventories, which consist entirely of hardware purchased for
               resale, are stated at the lower of average cost (first-in,
               first-out method) or market.

          Property and Equipment

               Property and equipment are stated at cost. Depreciation on
               equipment is computed by the declining-balance method over the
               equipment's estimated useful lives. Improvements to leased
               property are amortized over the lives of the improvements. An
               aircraft was being amortized over seven years under the
               straight-line method until its disposal in 2004 and software is
               being 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.

          Other Assets

               During 2004, the Company disposed of its 25% investment in
               Reading Air Charter, LLC (RAC). Prior to this disposition, the
               Company accounted for this investment utilizing the equity method
               of accounting. Under this method, the Company's share of the net
               income of RAC was recognized as income in the Company's income
               statements and added to the investment account, and distributions
               received from RAC were treated as a reduction of the investment
               account. Allocation of RAC's profits were governed by a
               Partnership Agreement, although it was generally based on the
               ownership percentage of each of the partners. RAC's operations
               for the period ended December 31, 2004 were not material.

                                       40
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Other Assets (Continued)

               Concurrent with this investment, the Company acquired a 25%
               interest in an aircraft that is leased to RAC. The Company
               relinquished their interest in the aircraft coincident with the
               disposition of this investment.

               As a result of the Company's disposition of this investment and
               aircraft, a loss was recognized amounting to $128,663 for the
               year ended December 31, 2004.

               On January 23, 2004, the Company entered into a Technology
               License Agreement with ADROIT, a South African Company. That
               agreement was amended and restated on March 17, 2004. As a
               result, the Company obtained an irrevocable license to market
               ADROIT's VIZNET software, including the right to sublicense this
               product to third parties. The Company was required to pay ADROIT
               $110,000 in accordance with the terms of the agreement. This
               agreement will remain in effect for five years and holds terms
               for annual renewals. As of December 31, 2005, the Company has
               paid $110,000 of this obligation and this amount is being
               amortized over the life of the agreement. Amortization expense
               included in the results of operations was $14,667 for the year
               ended December 31, 2005.

          Goodwill

               Effective as of January 1, 2002, the Company adopted Statement of
               Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
               Other Intangible Assets." Under SFAS No. 142, goodwill and other
               intangible assets with indefinite lives are no longer amortized
               but are reviewed annually, or more frequently if impairment
               indicators arise. Based upon such review, management determined
               that no write-down of goodwill was required as of December 31,
               2005 and 2004.

          Deferred Income

               Deferred income represents prepayments on maintenance contracts
               and advance billings on software and hardware sales. Income on
               maintenance contracts is recognized over the life of the
               contract. Income on advance billings is recognized as work
               progresses and expenses are incurred.

          Income Taxes

               The Company accounts for its income taxes under the liability
               method specified by SFAS No. 109, "Accounting for Income Taxes."
               Deferred tax assets and liabilities are determined based on the
               difference between the financial statement and tax bases of
               assets and liabilities as measured by the enacted tax rates which
               will be in effect when these differences reverse. Deferred tax
               expense is the result of changes in deferred tax assets and
               liabilities. Deferred tax assets are reduced by a valuation
               allowance when, in the opinion of management, it is more likely
               than not that some portion of the deferred tax assets will not be
               realized.

                                       41
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Net Income (Loss) per Common Share

               The Company reports earnings per share in accordance with the
               provisions of SFAS No. 128, "Earnings Per Share." SFAS No. 128
               requires presentation of basic and diluted earnings per share in
               conjunction with the disclosure of the methodology used in
               computing such earnings per share. Basic earnings per share
               excludes dilution and is computed by dividing income available to
               common stockholders by the weighted average common shares
               outstanding during the period. Diluted earnings per share takes
               into account the potential dilution that could occur if
               securities or other contracts to issue common stock were
               exercised and converted into common stock.

          Stock Based Compensation

               The Financial Accounting Standards Board's SFAS No. 123,
               "Accounting for Stock-Based Compensation," contains a fair
               value-based method for valuing stock-based compensation that
               entities may use, which measures compensation cost at the grant
               date based on the fair value of the award. Stock compensation
               expense and sales discounts recognized for nonemployee legal and
               consulting services and customer purchases totaled $0 and $13,000
               for the years ended December 31, 2005 and 2004, respectively.

               SFAS No. 123 permits entities to continue accounting for employee
               stock options and similar equity instruments under Accounting
               Principles Board (APB) Opinion 25, "Accounting for Stock Issued
               to Employees." The Company accounts for its employee stock option
               plans under APB Opinion No. 25. Compensation expense recognized
               for stock options issued to employees with an exercise price less
               than the fair market value of the related common stock amounted
               to $1,082 and $43,723 for the years ended December 31, 2005 and
               2004, respectively. Entities that continue to account for stock
               options using APB Opinion 25 are required to make pro forma
               disclosures of net income and earnings per share, as if the fair
               value-based method of accounting defined in SFAS No. 123 had been
               applied.

                                       42
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Stock Based Compensation (Continued)

               Had compensation cost for the options been determined based on
               the fair value of the employee options at the grant dates
               consistent with the method of SFAS No. 123, the Company's net
               income and net income per share of common stock would have been
               reduced to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                               2005            2004
                                                                           ------------    ------------
<S>                                                                             <C>         <C>
                Net income (loss):
                     As reported                                                $98,675     ($1,203,578)
                     Add stock based employee compensation expense
                         included in reported net income (loss), net
                         of related tax effects                                   1,082          43,723
                     Deduct total stock-based employee compensation
                         expense determined under fair value based
                         method for all awards, net of related tax
                         effect                                                 (33,590)       (135,971)
                                                                           ------------    ------------

                     Pro forma net income (loss)                                $66,167     ($1,295,826)
                                                                           ============    ============

                Net income (loss) per share of common stock, basic:
                     As reported                                                  $0.01          ($0.19)
                     Pro forma                                                    $0.00          ($0.20)

                Net income (loss) per share of common stock, diluted:
                     As reported                                                  $0.01          ($0.19)
                     Pro forma                                                    $0.00          ($0.20)
</TABLE>

               The fair value of each option grant is estimated on the date of
               grant using the Black-Scholes options-pricing model with the
               following weighted average assumptions used for grants in 2004:
               dividend yield of 0%, expected volatility of 97%, the average
               risk-free interest rate of 3.90%; and expected lives of 6.83
               years for the directors and 7.0 years for consulting options,
               respectively. No options were granted in 2005.

          Use of Estimates

               The preparation of financial statements in conformity with
               accounting principles generally accepted in the United States of
               America 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.

                                       43
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Cash and Cash Equivalents

               The Company considers all investments with an original maturity
               of three months or less to be cash equivalents.

          Software Development Costs

               Under the criteria set forth in 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 have been established for software development,
               maintenance and product enhancements and acquisition costs are
               included in cost of goods sold.

          Advertising Costs

               The Company expenses the cost of advertising the first time
               advertising takes place. Advertising expense for the years ended
               December 31, 2005 and 2004 was $64,472 and $132,208,
               respectively.

          Comprehensive Income

               Accounting principles generally require that recognized revenue,
               expenses, gains and losses be included in net income. Certain
               changes in assets and liabilities, such as unrealized gains and
               losses on available for sale securities, are reported as a
               separate component of the equity section of the balance sheet.
               Such items, along with net income, are the components of
               comprehensive income.

                                       44
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Comprehensive Income (Continued)

               The components of other comprehensive income and related tax
               effects are as follows:

<TABLE>
<CAPTION>
                                                                                     2005       2004
                                                                                   --------   --------
<S>                                                                                <C>        <C>
               Unrealized holding gains arising during the year                    $      0   $ 59,346
               Reclassification adjustment for losses realized in net income              0    115,135
                                                                                   --------   --------

               Net decrease in unrealized losses                                          0    174,481

               Tax effect                                                                 0          0
                                                                                   --------   --------

                      Net of Tax Amount                                            $      0   $174,481
                                                                                   ========   ========
</TABLE>

          Recently Issued Accounting Standards

               In December 2004, the Financial Accounting Standards Board (FASB)
               issued Statement No. 123(R), "Share-Based Payment." Statement No.
               123(R) revised Statement No. 123, "Accounting for Stock-Based
               Compensation," and supersedes APB Opinion No. 25, "Accounting for
               Stock Issued to Employees," and its related implementation
               guidance. Statement No. 123(R) will require compensation costs
               related to share-based payment transactions to be recognized in
               the financial statements (with limited exceptions). The amount of
               compensation costs will be measured based on the grant-date fair
               value of the equity or liability instruments issued. Compensation
               cost will be recognized over the period that an employee provides
               service in exchange for the award. This statement is effective
               for the Company as of the beginning of the first interim or
               annual reporting period that begins after December 15, 2005.

               In March 2005, the SEC issued Staff Accounting Bulletin No. 107
               ("SAB No. 107"), "Share-Based Payment", providing guidance on
               option valuation methods, the accounting for income tax effects
               of share-based payment arrangements upon adoption of SFAS No. 123
               (R), and the disclosures subsequent to adoption. The Company will
               adopt SFAS No. 123(R) and provide SAB No. 107 required
               disclosures effective January 1, 2006, using the modified
               prospective method with no restatement. Stock compensation
               expense to be recorded subsequent to December 31, 2005 for the
               unvested portion of existing awards is not material. In January
               2006, the Company granted 525,000 options that vest immediately.
               The options have an estimated fair value of $110,250 which will
               be recorded as compensation expense in 2006. The impact of future
               option or stock grants is dependent upon the quantity and nature
               of future stock-based compensation grants.

                                       45
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          Recently Issued Accounting Standards (Continued)

               In November 2004, the FASB issued Statement No. 151, "Inventory
               Costs, an amendment of ARB No. 43, Chapter 4," (SFAS 151) which
               clarifies the types of costs that should be expensed rather than
               capitalized as inventory. This statement also clarifies the
               circumstances under which fixed overhead costs associated with
               operating facilities involved in inventory processing should be
               capitalized. The provisions of SFAS 151 are effective for fiscal
               years beginning after June 25, 2005. This statement will not have
               an impact on the Company's financial position or results of
               operations.


NOTE 3 - PROPERTY AND EQUIPMENT

          Property and equipment consisted of the following at December 31, 2005
     and 2004:

<TABLE>
<CAPTION>
                                                                                          Estimated
                                                          2005                 2004      Useful Lives
                                                          -----------    -----------     ------------
<S>                                                       <C>            <C>             <C>
          Furniture, fixtures and equipment               $   772,945    $   736,476     3 - 10 years
          Leasehold improvements                              314,150        314,150     7 - 15 years
          Computer software                                    55,026         55,026        3 years
                                                          -----------    -----------

                                                            1,142,121      1,105,652
          Accumulated depreciation and amortization          (883,362)      (794,921)
                                                          -----------    -----------

                                                          $   258,759    $   310,731
                                                          ===========    ===========
</TABLE>

          Depreciation and amortization related to property and equipment
     amounted to $88,441 and $97,434 for the years ended December 31, 2005 and
     2004, respectively.


NOTE 4 - INCOME TAXES

          The benefit for income taxes for the years ended December 31, 2005 and
     2004 was as follows:

<TABLE>
<CAPTION>
                                                                         2005          2004
                                                                      ----------    ----------
<S>                                                                      <C>           <C>
          Federal:
               Current                                                   $42,292       ($8,294)
               Utilization of net operating loss carry forwards          (42,292)            0
               Deferred                                                        0         8,294
                                                                      ----------    ----------

                                                                              $0            $0
                                                                      ==========    ==========
</TABLE>

                                       46
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 4 - INCOME TAXES (CONTINUED)

          A reconciliation of income tax expense at the U.S. federal statutory
     income tax rate to actual income tax expense is as follows:

                                                       2005           2004
                                                    -----------    -----------
          Pretax at statutory rate                  $    33,550      ($409,217)
          State taxes, net of federal benefit             7,979        (62,380)
          Valuation allowance                          (106,428)       284,513
          Other                                          64,899        187,084
                                                    -----------    -----------

                                                    $         0    $         0
                                                    ===========    ===========

          The net deferred tax asset for the years ended December 31, 2005 and
     2004 consists of the following:

                                                       2005           2004
                                                    -----------    -----------
          Deferred tax assets:
               Deferred stock compensation          $   178,938    $   174,103
               Allowance for doubtful accounts            9,050          6,489
               Accrued vacation                          18,835         15,082
               Research and development credits         140,419        140,419
               Net operating loss carryforwards         961,910      1,096,480
                                                    -----------    -----------

                                                      1,309,152      1,432,573

               Valuation allowance                   (1,160,087)    (1,266,515)
                                                    -----------    -----------

                 Total Deferred Tax Asset               149,065        166,058

          Deferred tax liabilities,
               depreciation expense                      (8,646)       (25,639)
                                                    -----------    -----------

                 Net Deferred Tax Asset             $   140,419    $   140,419
                                                    ===========    ===========

          During 2005 the valuation allowance decreased by $106,428. The Company
     generated taxable income during 2005 and accordingly used a portion of its
     net operating loss carryforward to offset the resulting income tax
     liability and reversed $42,292 of the valuation allowance. The remaining
     change in the valuation allowance was caused by changes in the gross amount
     of deferred tax assets and liabilities. At December 31, 2005, the Company
     has a federal net operating loss carryforward of approximately $2,358,000
     for which a deferred tax asset was recorded, with a corresponding valuation
     allowance. This net operating loss carryforward expires at varying times
     through 2025. At December 31, 2005, the Company has state net operating
     loss carryforwards of approximately $2,427,000 for which a deferred tax
     asset was recorded, with a corresponding valuation allowance. The state net
     operating loss carryforwards expire in 2022 through 2025.

                                       47
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 5 - LINE OF CREDIT

          The Company has a $750,000 line of credit with a bank. Interest is
     payable monthly at the bank's prime interest rate plus 1.75%. The balance
     of outstanding borrowings was $661,000 and $341,068 at December 31, 2005
     and 2004, respectively. The line of credit is subject to annual renewal on
     April 30, 2006, at which time the availability of the line is scheduled to
     decrease to $500,000. The line of credit is collateralized by a first lien
     security interest in all business assets and an unlimited personal
     guarantee of a shareholder. This line includes a financial covenant that
     requires the Company to maintain a certain tangible net worth. The Company
     was not in compliance with this covenant at December 31, 2005. However, a
     waiver was obtained from the bank on March 30, 2006.


NOTE 6 - DEMAND NOTE PAYABLE, STOCKHOLDER

          The Company has a demand note payable with a Director. Interest is
     payable monthly at a rate of prime plus 1.00%. The balance of outstanding
     borrowings was $110,000 and $130,000 at December 31, 2005 and 2004
     respectively. The demand note is collateralized by a security interest in
     substantially all business assets and a first priority preferred security
     interest in the Company's software programs. This note is subordinated to
     the bank's line of credit (Note 5).


NOTE 7 - LONG-TERM DEBT

          Long-term debt consisted of the following at December 31, 2005 and
     2004:

<TABLE>
<CAPTION>
                                                                                 2005        2004
                                                                               --------    --------
<S>                                                                            <C>         <C>
          Note payable, secured by substantially all the Company's
               assets, payable in fixed monthly principal installments
               of $606 including interest at 7.2% per annum through
               October 2007                                                    $ 11,942    $      0

            Current portion                                                      (6,592)          0
                                                                               --------    --------

                                                                               $  5,350    $      0
                                                                               ========    ========
</TABLE>

          The future minimum payments required on the notes payable at December
     31, 2005 are as follows:

                 2006                             $  6,592
                 2007                                5,350
                                               -----------

                                                  $ 11,942
                                               ===========

                                       48
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 8 - CAPITAL LEASE OBLIGATIONS

          During 2005, the Company entered into a three-year lease agreement for
     the use of equipment. The lease, which qualifies as a capital lease
     obligation, requires monthly payments of $541 through May 2008.

          During 2004, the Company entered into a three-year lease agreement for
     the use of equipment. The lease, which qualifies as a capital lease
     obligation, requires monthly payments of $973 through December 2007.

          The following amounts represent annual lease payments by year and in
     the aggregate including amounts which represent interest and current
     maturities at December 31, 2005:

          Years ending:
               2006                                      $   18,182
               2007                                          18,605
               2008                                           3,248
                                                         ----------

                                                             40,035
               Amounts representing interest                 (4,036)
                                                         ----------

                                                             35,999
               Current maturities                           (15,714)
                                                         ----------

                                                         $   20,285
                                                         ==========

          The following amounts are included in property and equipment related
     to the above leases at December 31, 2005:

          Equipment                                      $   47,937
          Accumulated depreciation                           (7,942)
                                                         ----------

                                                         $   39,995
                                                         ==========

                                       49
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 9 - EARNINGS PER SHARE

          The Company's calculation of earnings per share is as follows:

<TABLE>
<CAPTION>
                                                                      2005           2004
                                                                   -----------    -----------
<S>                                                                    <C>        <C>
          NET INCOME (LOSS)                                            $98,675    ($1,203,578)
               Preferred stock dividends                               (46,667)       (80,000)
               Preferred stock discount accretion                            0        (29,749)
                                                                   -----------    -----------

          NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS          $52,008    ($1,313,327)
                                                                   ===========    ===========

          AVERAGE BASIC SHARES OUTSTANDING                           7,293,859      6,923,750
               Assumed conversion of preferred stock                 1,505,116              0
               Effect of dilutive options and warrants                 142,417              0
                                                                   -----------    -----------

          AVERAGE DILUTED SHARES OUTSTANDING                         8,941,392      6,923,750
                                                                   ===========    ===========

          NET INCOME (LOSS) PER COMMON SHARE
               Basic                                                     $0.01         ($0.19)
                                                                   ===========    ===========

               Diluted                                                   $0.01         ($0.19)
                                                                   ===========    ===========
</TABLE>

          A total of 244,998 common stock options and 746,965 shares of
     convertible preferred stock were included in the computation of diluted
     earnings per share for the year ended December 31, 2005. 1,120,000 warrants
     were excluded from the computation of diluted earnings per share as the
     warrants would be antidilutive.

          A total of 2,442,500 common stock options and warrants and 746,965
     shares of convertible preferred stock were not included in the computation
     of diluted earnings per share because of their anti-dilutive effect for the
     year ended December 31, 2004.


NOTE 10 - RELATED PARTY TRANSACTIONS

          The Company is affiliated with High Printing and Graphics, Inc. The
     Company's President owns a 50% interest in High Printing and Graphics, Inc.
     During the years ended December 31, 2005 and 2004, the Company conducted
     transactions with the related party which were immaterial, both
     individually and in the aggregate.

          The Company rents space from certain of the Company's stockholders on
     a month-to-month basis. Because this related party lease is always subject
     to change the Company is presently amortizing leasehold improvements over
     their estimated useful lives. The leaseholds are reviewed at least annually
     to determine if the estimated useful lives are still appropriate. Rent
     expense for 2005 and 2004 relating to this arrangement was $120,000 each
     year.

                                       50
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 11 - EMPLOYEE DEFERRED SALARY PLAN

          The Company has an employee savings plan subject to the provisions of
     Section 401(k) of the Internal Revenue Code. Under the terms of the Plan,
     the Company will match 25% of the participant's contribution, up to 6% of
     the participant's compensation. The total Company contributions included in
     the statements of operations for the years ended December 31, 2005 and 2004
     were $22,271 and $21,411, respectively.


NOTE 12 - STOCKHOLDERS' EQUITY

          In January 2001, the Company entered into a two-year agreement with a
     marketing firm in which a total of 400,000 stock warrants were issued. The
     agreement called for 16,667 warrants to vest per month at an exercise price
     of $0.25 per share. 200,000 warrants were vested at December 31, 2001 and
     each of these warrants is exercisable for one share of common stock at an
     exercise price of $0.25 per share. During 2002, the Company amended this
     marketing agreement whereby the remaining 200,000 warrants vested on
     January 1, 2003 and each of these warrants is exercisable for one share of
     common stock at an exercise price of $2.00 per share. The weighted-average
     fair value of warrants vesting in 2003 was $0.26. The grant date fair value
     of the warrants issued during 2001 was $0.50 per warrant. No warrants were
     granted during 2005 or 2004. The warrants that vested during 2001 were
     exercised on November 6, 2003. As a result, 161,538 shares of common stock
     were issued and 38,462 warrants were forfeited. The warrants that vested on
     January 1, 2003 expire on January 1, 2008.

          In August 2001, the Company issued 746,965 shares of its Series A
     Convertible Preferred Stock and 300,000 Common Stock Purchase Warrants for
     $1,000,000. Approximately $134,000 of the $1,000,000 purchase price was
     allocated to the fair value of the warrants, generating a discount on
     preferred stock that was being accreted over a period of three years. Such
     accretion was $0 and $29,749 for the years ended December 31, 2005 and
     2004, respectively. The warrants are exercisable at the fair market value
     of the Company's stock on the vesting dates. 100,000 warrants vested
     immediately and were exercised in 2001 for $133,000. 100,000 warrants
     vested on January 1, 2002. These warrants expired on January 1, 2005. The
     remaining 100,000 warrants vested on January 1, 2003. These warrants were
     exercisable at $1.75 per warrant. The warrants expired on January 1, 2006.

                                       51
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 12 - STOCKHOLDERS' EQUITY (CONTINUED)

          Each of the preferred shares is convertible into shares of the
     Company's common stock at a conversion price of $1.33875, subject to
     certain anti-dilution adjustments. The holders of the Series A Preferred
     Shares are entitled to receive an annual cumulative dividend on each share
     of the Series A Preferred Shares equal to 8% of the Issuance Price
     ($1.33875) payable quarterly on the fifteenth day following the end of each
     fiscal quarter, in kind, in the form of additional shares of the Series A
     Preferred Stock, or at the election of the Company in cash; provided,
     however, that dividends on the Series A Preferred Shares: will cease to
     accrue and will not be payable for any year during which the Fair Market
     Value (as defined) of the Common Stock, as of the anniversary date of
     August 17, increases by an amount equal to or greater than 8% over the Fair
     Market Value of the Common Stock as of the preceding August 17 and will
     permanently cease to accrue, and dividends accrued and unpaid with respect
     to any partial dividend period prior to such date will not be payable, if
     the Fair Market Value of the Common Stock, at any time after the
     effectiveness date of the initial registration covering the public resale
     of the shares of Common Stock issuable upon the exercise of the Series A
     Preferred Shares equals or exceeds the average Closing Price (as defined)
     multiplied by 2 for the 25 day period following the effective date of the
     Initial Registration. In accordance with these terms no such dividends will
     accrue for the period from August 2005 through July 2006. For the years
     ended December 31, 2005 and 2004, dividends in the amount of $46,667 and
     $80,000, respectively were accrued related to the Series A Preferred Shares
     outstanding. At December 31, 2005 and 2004, the per share amount of
     dividends in arrearages amounted to $0.42 and $0.36, respectively.

          In the event of any liquidation, dissolution or winding up of the
     Company, either voluntary or involuntary, the holders of the Series A
     Preferred Shares shall be entitled to receive, prior and in preference to
     any distribution of any of the assets of the Company to the holders of
     Common Stock by reason of ownership thereof, an amount per share equal to
     the sum of $1.33785 for each outstanding share of Series A Preferred Stock
     plus accrued and unpaid dividends.

          The holders of the Series A Preferred Stock shall have the following
     rights with the Common Stockholders:

          (a)  Vote on an as-converted basis, with the Common Stock on all
               matters submitted to a vote of stockholders;

          (b)  Vote as a separate class where provided under Delaware law or the
               Company's charter or by-laws;

          (c)  To elect one member of the Company's Board of Directors so long
               as not less than 375,000 shares of the Series A Preferred Stock
               are issued and outstanding, and

          (d)  The Company agrees that it shall not take any of the following
               actions without affirmative vote of the holders of the majority
               of the Series A Preferred Stock: issue any further preferred
               shares or other securities of the Company with the liquidation
               rights equal to or superior to those of the outstanding Series A
               Preferred Stock, or amend the Certificate of Designation in any
               manner that would directly and adversely affect the Series A
               Preferred Stock.

                                       52
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 12 - STOCKHOLDERS' EQUITY (CONTINUED)

          During July 2004, the Company carried out a private placement in which
     units were offered at $50,000 per unit, with each unit consisting of
     100,000 shares of the Company's common stock and 100,000 warrants for the
     purchase of the Company's common stock. Each warrant entitles the holder to
     purchase one share of common stock at a price of $1.00 per share for a
     period of five years that commenced on the closing date of the offering. As
     a result of this offering, the Company issued 720,000 common shares and
     warrants and recognized $360,000 during 2004.

          Also in July 2004, the Company issued 20,000 shares of its common
     stock, valued at $11,000 to a company in the form of a non-refundable
     retainer for its services to assist the Company in raising capital on a
     non-exclusive basis for a period of six months.

          In December 2003, the Company entered into an agreement with its
     outside legal counsel in which 100,000 shares of common stock and 100,000
     stock warrants were issued at a cost of $75,000. These warrants are
     exercisable at any time on or after January 1, 2004 and on or prior to
     close of business on December 31, 2013, at an exercise price of $1 per
     share of common stock.


NOTE 13 - STOCK OPTION PLAN

          During 2002, the stockholders approved the adoption of the 2002 stock
     option plan (the 2002 Plan). The purpose of the 2002 Plan is to provide a
     means whereby directors and selected employees, officers, agents,
     consultants and independent contractors of the Company may be granted
     incentive stock options and/or nonqualified stock options to purchase
     shares of common stock in order to attract and retain the services or
     advice of such directors, employees, officers, agents, consultants and
     independent contractors. A total of 1,600,000 shares of common stock have
     been made available. The options under this plan vest as dictated in the
     individual stock option agreements and expire five years from date of grant
     for a 10% stockholder and ten years from date of grant for all others. At
     December 31, 2005 and 2004, 192,500 options have been granted under this
     Plan, all of which were granted at market value.

          During 1999, the stockholders approved the adoption of the 1999 stock
     option plan (the 1999 Plan). The purpose of the 1999 Plan is to provide a
     means whereby directors and selected employees, officers, agents,
     consultants and independent contractors of the Company may be granted
     incentive stock options and/or nonqualified stock options to purchase
     shares of common stock in order to attract and retain the services or
     advice of such directors, employees, officers, agents, consultants and
     independent contractors. A total of 1,300,000 shares of common stock have
     been made available. The options under this Plan vest over a five-year
     period, in 20% increments on each successive anniversary of the date of the
     grant, with varying expiration dates.

          At December 31, 2005 and 2004, 1,300,619 options have been granted
     under the 1999 plan of which 725,000 options have been granted below market
     price and for which 70,619 options have been exercised through December 31,
     2005 and 2004. Expired or forfeited options were 360,000 and 350,000 for
     December 31, 2005 and 2004, respectively.

                                       53
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 13 - STOCK OPTION PLAN (CONTINUED)

          Compensation expense related to these options was $1,082 and $43,723
     for employees and directors, and $0 and $2,000 for legal counsel for the
     years ended December 31, 2005 and 2004, respectively.

          A summary of the status of the Company's stock option plans as of
     December 31, 2005 and 2004 is presented below:

<TABLE>
<CAPTION>
                                                        2005                           2004
                                            ---------------------------    ---------------------------
                                                            Weighted                       Weighted
                                                             Average                        Average
                                                            Exercise                        Exercise
                                              Shares          Price          Shares          Price
                                            ------------   ------------    ------------   ------------
<S>                                           <C>              <C>           <C>              <C>
Outstanding, beginning of year                1,072,500        $1.00         1,177,500        $1.05
     Granted                                          0         0.00            45,000         0.85
     Forfeited                                  (10,000)       (0.75)         (150,000)       (1.35)
                                            ------------   ------------    ------------   ------------

Outstanding, end of year                      1,062,500        $1.00         1,072,500        $1.00
                                            ============   ============    ============   ============

Options exercisable at year-end               1,014,164        $1.02           953,332        $1.02
                                            ============   ============    ============   ============

Weighted average fair value of options
     granted during the year                                    -                             $0.60
                                                           ============                   ============
</TABLE>

          The following table summarizes information about options outstanding
     at December 31, 2005 and 2004:

<TABLE>
<CAPTION>
                                     2005                                                               2005
                              Options Outstanding                                                Options Exercisable
----------------------------------------------------------------------------------      -------------------------------------
                                             Weighted Average
                           Number                Remaining            Weighted               Number              Weighted
   Range of            Outstanding at         Contractual Life         Average           Outstanding at          Average
Exercise Prices       December 31, 2005            (Years)          Exercise Price      December 31, 2005      Exercise Price
---------------       -----------------      -----------------      --------------      -----------------      --------------
<S>                        <C>                      <C>                 <C>                 <C>                    <C>
     $0.05                   135,000                1.96                $0.05                 135,000              $0.05
 $0.33 - $0.90               195,000                3.07                 0.56                 151,664               0.56
 $0.91 - $1.50               632,500                1.97                 1.18                 627,500               1.18
 $1.51 - $2.00               100,000                2.25                 2.00                 100,000               2.00
                      -----------------                                                 -----------------

                           1,062,500                                                        1,014,164
                      =================                                                 =================
</TABLE>


                                       54
<PAGE>

CIMNET, INC.
================================================================================
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 13 - STOCK OPTION PLAN (CONTINUED)

<TABLE>
<CAPTION>
                                     2004                                                               2004
                              Options Outstanding                                                Options Exercisable
----------------------------------------------------------------------------------      -------------------------------------
                                             Weighted Average
                           Number                Remaining            Weighted               Number              Weighted
   Range of            Outstanding at         Contractual Life         Average           Outstanding at          Average
Exercise Prices       December 31, 2004            (Years)          Exercise Price      December 31, 2004      Exercise Price
---------------       -----------------      -----------------      --------------      -----------------      --------------
<S>                        <C>                      <C>                 <C>                 <C>                    <C>
     $0.05                   135,000                2.96                $0.05                 135,000              $0.05
 $0.33 - $0.90               205,000                4.07                 0.57                 149,026               0.59
 $0.91 - $1.50               632,500                2.97                 1.18                 626,452               1.17
 $1.51 - $2.00               100,000                3.25                 2.00                  95,000               2.00
                      -----------------                                                 -----------------

                           1,072,500                                                          953,332
                      =================                                                 =================
</TABLE>

NOTE 14 - COMMITMENTS AND CONTINGENCIES

          The Company leased various office equipments and a vehicle which were
     classified as operating leases. These leases expired in 2004. Total expense
     under these operating leases amounted to $14,860 for the year ending
     December 31, 2004.

          Total rental expense under all leases for the years ended December 31,
     2005 and 2004 was $121,851 and $137,927, respectively. (See Note 10)

          Cimnet, Inc. is at times involved in ordinary and routine litigation
     incidental to its business. The Company is not party to any pending legal
     proceedings that, in the opinion of management, would have a material
     adverse effect on the results of its operations or financial position.


NOTE 15 - CONCENTRATION OF RISK

          Financial instruments which potentially subject the Company to
     concentrations of credit risk consist principally of cash which may, at
     times, exceed FDIC limits and trade accounts receivable.

          During 2005, the Company had sales to one customer totaling $1,094,613
     of which $397,435 was outstanding at December 31, 2005. During 2004, the
     Company had sales to one customer totaling $324,500 of which $104,940 was
     outstanding at December 31, 2004. No other significant concentrations
     existed at December 31, 2005 and 2004.

                                       55
<PAGE>

                                    SIGNATURE

     Pursuant to the requirements of Section 13 or 15(d) 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.

Dated:  Robesonia, Pennsylvania
        March 31, 2006

                              CIMNET(R), INC.


                              By: /s/ JOHN D. RICHARDSON
                                 -----------------------------------------------
                                  John D. Richardson
                                  Chairman of the Board, Chief Executive Officer
                                  and Principal Accounting Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.

Signature                             Title                            Date
---------                             -----                            ----

/s/ JOHN D. RICHARDSON     Chairman of the Board, Chief           March 31, 2006
------------------------   Executive Officer and Principal
John D. Richardson         Accounting Officer


/s/ WILLIAM NYMAN          Director and Vice President            March 31, 2006
------------------------   of Integration Services
William Nyman


/s/ DAVID BIRK             Director                               March 31, 2006
------------------------
David Birk


/s/ KARL GERHART           Director                               March 31, 2006
------------------------
Karl Gerhart


/s/ J. JEFFREY FOX         Director                               March 31, 2006
------------------------
J. Jeffrey Fox


/s/ SUNDARESH RAMAYYA      Director                               March 31, 2006
------------------------
Sundaresh Ramayya


                                       56